https://www.wealthprofessional.ca/investments/alternative-investments/why-oil-is-an-incredibly-target-rich-environment-to-create-alpha/363533
Quote:...But, he said there’s a real lack of knowledge about how oil is used – and the likely timeline for alternatives to displace oil.
“Let’s look at how oil is used,” he told Wealth Professional. “60% is transportation; 40% is not. Transportation is the low-hanging fruit. When you talk about electric cars, that’s 27% of oil demand. There are 1.3 billion internal combustion engines to displace. That number continues to grow as the world’s population grows and living standards rise. Last year, electric car sales were five million and it will be ramping up. But, how quickly does have million per annum have to scale to displace 1.3 billion?
“The other thing is heavy hauling trucks, which will have to use hydrogen instead of oil. Well, you’re looking at the mid-2040s before you can produce enough hydrogen for them. That will require hundreds of billions of dollars of investment to displace global diesel.
“And there’s jet fuel at eight million barrels per day. They’re talking about renewable jet fuel that uses cow tallow and algae and a while bunch of wonderful things. It’s not profitable and, even if it was, you’re looking at a timeline measured in decades. So, that’s the easy stuff: that’s 60% of oil demand. You don’t reach critical mass until at least two decades from now.
“The other 40% are things like petrochemicals, plastics, lubricants, cement, agriculture – and all of those things grow as the world’s population grows. The challenge with that is the global population is going to grow by over two billion people between now and 2050, and we’re supposed to hit net zero. The only way you can do that is by lowering your living standards because the higher the living standard, the more we consume.
"The average person in North American consumes over 20 barrels; the average person in the world consumes five barrels every year. So, as global living standards are rising, and populations are growing, that oil intensity is rising, it is not falling. Only the most energy ignorant could think that we will not be using oil for the foreseeable future. You and I will be using oil for the rest of our lifetimes.”