What are these energy transitions and what do they look like
well
We've got historical precedent for this and we can go back and look at these two big energy transitions that have occurred in the past
To form a view of what the future is going to look like - so the first big energy transition is coal
1750 the world's energy mix is about 90% burning wood and
horses and oxen pulling
Carts, right? It's not a particularly
advanced energy system and then over this period of 80 years from
1830 onwards coal were really starts building into the mix and this is the first great energy transition
It takes 80 years as I said and we still burn twice as much wood as coal in the 19th century as this is happening
At the same time coal crits all these new sources of demand like steamboats and mechanization and railways
That's what the first one looks like. The second one looks eerily similar
So it's oil oil starts really building into the mix for about 1910 onwards oil Peaks the share of the world's energy mix in
1973 again a 60 year transition and
Just in the same way, we burned 15% more coal than oil in the 20th century and oil unlocked these
Unimaginable new sources of demand that nobody could have seen coming like plastics and planes and cars
so here we are in 2019 and
It looks like we're gonna have an energy transition
But but actually we're not we're gonna have five energy transitions all at the same time
These are happening right now. And I think that analogy of what the past looks like is really applicable here
I think it's also going to take
70 plus years to meaningfully shift the energy system and I think it's also going to create new sources of demand and opportunities
There's just beyond imagination today. And so let's let's go into that
So what are these five great energy transitions number one?
Renewables the price of wind and solar has come down by
90 percent since the 1980s
If you go out and fill your car up with oil today at the pump you pay a hundred cents per kilowatt hour for energy
Okay wind and solar average adding kilowatt hours to the grid at about five cents a kilowatt hour
they are the bottom of the cost curve and
They're gonna scale up and reshape the entire energy landscape over the next century energy transition number two
shale
So for the first 150 years of oil
We've been getting this resource from conventional reservoirs. These are sand stones and carbonates that are porous and permeable
Now we have the last decade
We haven't been reliant on getting oil out of these reservoir rocks
we are going straight into the source rock where the oil is generated and
Visit transformation was ten times more oil in these source rocks than in the reservoirs and the technology just keeps getting better and better
I recently went back through 300 technical papers in shale
100 of them are gonna improve productivity
On my numbers shale is going to be capable of reaching
2530 million barrels a day and to a lot of people that's gonna sound crazy
But I can take you through some of that and these technologies coming through they're just game changers energy transition number three
electrification
So if you were driving a fossil fuel car today
You get 18 percent conversion efficiency of the gasoline in the tank to useful energy you can drive with
Make that current electric car and you're at seventy percent
So the solution here is you and Electrify as much of this inefficient combustion process as possible
And again that is going to go and apply to as many machines as possible over the next few decades
This is why you see oil majors trying to get into electricity business. This is the future energy
transition number four
Digital so it's really easy to think of an oil platform as an oil platform as an oil platform
But the ones being built today from our engineering
perspective
are
Light years ahead of the platforms of the past
you go out to the North Sea today to a modern instrumented oil platform and it has
60,000 tags on
60,000 pieces of equipment or laying data back to shore in real time
If something is about to break you and see that it's about to break before it breaks and stop it breaking
This is yielding up X per barrel of three to four dollars on these next generation platforms
And it's sweeping through the whole industry
energy transition number five the Big Kahuna
Carbon the world is putting thirty-five billion tons of carbon out into the atmosphere every year
And will change that and the oil companies know we've got to change that
in fact
You could go so far as to say
nobody is more interested in driving this energy transition than Big Oil because if they don't
they are not going to have a license to operate and
really in the last few years
You've seen companies embrace that message hook line and sinker these companies know they've got to change and they want to deliver this transition
So let's recap here are the five themes
renewals shale
Digital electrification and environmental really all of these just are
Enormous uncertainties for investors and that is why without an understanding of these uncertainties it is so hard to open
Your wallet to this industry and that is the whole point of why I want to do what I'm doing
which is helping best to see the opportunities in technology because you know
We need to rebuild not the energy system that we have so far, but three or four more of these things
I'm just aren't going to do it and as the capital can go in
So the latest numbers from the IAEA?
And I mentioned the world invested 1.8 five trillion dollars in energy last year
We need to increase that by two hundred three hundred billion dollars per annum
By the 2020s in order to meet the world's energy needs there are opportunities there unless investors can see those opportunities
It's not and we're gonna change that
you
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