Debunking The New Energy Economy

While a groundswell rises worldwide to replace hydrocarbons with renewable energies—and sooner rather than later—do physical realities support such a revolutionary change to energy domains? The short answer is no.

Mark P. Mills, Contributor
Debunking The New Energy Economy

To completely replace hydrocarbons over the next 20 years, global renewable energy production would have to increase by at least ninetyfold. For context: It took a half-century for global oil and gas production to expand by tenfold. It is a fantasy to think, costs aside, that any new form of energy infrastructure could now expand nine times more than that in under half the time. (Illustration by Robert D. Avila)

A growing chorus of voices is exhorting the public, as well as government policymakers, to embrace the necessity—indeed, the inevitability—of society’s transition to a “new energy economy.” Advocates claim that rapid technological changes are becoming so disruptive and renewable energy is becoming so cheap, so fast, that there is no economic risk in accelerating the move to—or even mandating—a post-hydrocarbon world that no longer needs to use much, if any, oil, natural gas or coal.

Central to that worldview is the proposition that the energy sector is undergoing the same kind of technology disruptions that Silicon Valley tech has brought to so many other markets. Indeed, “old economy” energy companies are a poor choice for investors, according to proponents of the new energy economy, because the assets of hydrocarbon companies will soon become worthless, or “stranded.” Betting on hydrocarbon companies today is like betting on Sears instead of Amazon a decade ago.

“Mission Possible,” a 2018 report by the international Energy Transitions Commission, crystalized this growing body of opinion on both sides of the Atlantic. To “decarbonize” energy use, the report calls for the world to engage in three “complementary” actions: aggressively deploy renewables or so-called clean tech, improve energy efficiency and limit energy demand.

Already have an account? Log In

Subscribe now to get unmatched and complete coverage of the Energy industry’s entire landscape!

View our subscription options
  • Access to site wide content
  • Access to our proprietary databases
  • Watch exclusive videos with energy executives
  • Unlimited access to an extensive library of Playbooks, Techbooks, Yearbooks, supplements, and special reports
  • Newly Added! Access to Rextag's Energy Datalink, containing extensive GIS databases of energy assets, production records, processing capacities, physical locations, planned projects, acquisition records, and much more.