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Thinktank Says Fossil Fuel Demand Will Peak Globally In 2023


09/12/2018


Thinktank Says Fossil Fuel Demand Will Peak Globally In 2023
A group of experts predict that by 2023, there can be a peaking in the demand for fossil fuels globally which will result in a direct impact on the financial markets as there would potentially be no use of oil, coal and gas assets that would be worth trillions of dollars.
 
According to predictions of the think tank Carbon Tracker, the global demand for fossil fuel would hit a peak in 2020s because of very high growth in power generated from wind and solar sources of power and a declining demand for energy coupled with action to fight climate change.  
 
This prediction of peaking of global demands for fossil fuels is much more bullish compared to those made by a large section of global oil and gas companies and energy agencies which have predicted global peaking of fossil fuel to occur sometime in the mid-2030s. The demand for is on the downslide now since 2014 which was its peak.
 
“Fossil fuel demand has been growing for 200 years, but is about to enter structural decline. Entire sectors will struggle to make this transition”, said Kingsmill Bond, new energy strategist at Carbon Tracker.
 
The predictions also spell doom for global energy firms, said the group that is credited with the popularization of the concept of a carbon bubble which denotes the period when there would be huge loss to the value of fossil fuel assets as the world switches to low carbon emission energy systems.
 
Warnings of such a transition would put the markets on the face of a “huge hit” have already been issued by the Bank of England governor, Mark Carney.
 
The peaking of demand for fossil fuel would potentially put forward a “systemic risk” for the financial markets because of value reduction of the assets of the fossil fuel industry, Carbon Tracker said.
 
The think tank said that the risks would be higher for such e4conomies that are very reliant on oil for their national revenues such as Venezuela and Saudi Arabia.
 
But earlier in the tears British Petroleum has said that because their assets and reserves do not remain underground for very long therefore the idea of a huge risk to their assets was rejected by oil and gas firms. The oil major said that every 13 years, the company pumps out its entire hydrocarbon reserves.
 
But the report from the Carbon Tracker warned against incumbency and no company would be protected because of its size. The report compared the outcome of the fossil fuel companies to the fate of the horse and cart when cars became popular at the beginning of the 20th century.
 
“Demand for incumbents peaks early, and investors in incumbents lose money early,” it said.
 
(Source:www.theguardian.com)


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