Demise of fossil fuels part I: Supply and demand

Abstract

According to United Nations , the world needs to reduce the emission of CO2 and other global warming gases by 45 % by 2030 and to negligible amount by 2050. According to UN, this is necessary to keep the goal of keeping earth temperature not exceeding 1.5 °C compared to pre-industrial level temperatures.To achieve this objective means reducing the fossil fuel consumption. Fossil fuels are largely responsible for emitting CO2; therefore, without significant reduction in fossil fuels consumption by 2050, the net zero emission by 2050 is not possible.One argument advanced in support of reducing fossil fuels consumption is limited supply. Using the principle of “Peak Oil Theory,” proponents state that fossil fuels is a limited resource and the world will simply run out of it. Based on the available data, we demonstrate that supply of fossil fuels is relatively abundant, and we will not run out of fossil fuels in near term. Using shale formations as an example, we demonstrate how the success of drilling horizontal wells with hydraulic fractures have significantly increased the oil and gas resource available for exploitation. To reduce fossil fuels demand, the available solutions include improving energy efficiency, reducing subsidies on fossil fuels, imposing carbon tax and life choice changes. We discuss some of those alternatives. Fossil fuel supply is relatively abundant and only possible solution to reduce the consumption is to reduce the demand. By comparing developed countries' consumption with developing countries’ consumption, we see a pathway where growth in GDP can be achieved without significant increase in fossil fuels consumption. Because of efficiency gains in energy usage, GDP in developed countries continues to grow without increase in fossil fuels consumption. Faster we reach the efficiency stage in developing countries, easier it would be reduce the fossil fuel consumption in the world.