Narratives are fun to talk about, but numbers tell the story. When it comes to the transition from dirty energy to clean energy, a Bloomberg analysis reveals the shift is steadily continuing despite what you might be hearing.
With the backdrop of a backlash against "woke" technologies and President Donald Trump's pro-fossil fuel talking points, author David Fickling noted that investment leaders now rarely mention the "climate."
That doesn't mean they are shifting their money to fossil fuels. Instead, investment is flowing to clean energy at a rate that isn't fast enough to hit net-zero pledges nor slow enough to comfort oil and gas executives.
When it comes to capital investment, after the 2017-21 stretch wherein clean energy spending was steady at $300 billion annually, the sector jumped to close to $800 billion in 2024. Meanwhile, fossil fuel spending rose at a far slower level, as Bloomberg's data shows.
There is confusion about how to measure the energy transition, Fickling explains. There can be discrepancies, as some analysts count electric vehicle purchases as "transition investments" while ignoring gas-powered vehicle ones, for example.
Bloomberg's own measure, BloombergNEF, shows clean energy spending passing fossil fuel spending just before 2023 and slowly building a lead. That insight is backed up by the actions of oil companies.
Instead of putting more money into future investments, oil companies are starting to return money to shareholders, per Bloomberg. Similarly, this shows up in their oil reserves.
If demand were booming, Fickling asserts there'd be a desire to hold at least 10 years' worth of output. Instead, oil companies are cutting down on their reserves, a phenomenon Bloomberg labels as "borrowed time."
"This shift suggests that oil and gas is now a sunset industry," Fickling writes.
Bloomberg's analysis adds support to the theory that clean energy sources are ascendant. Green tech such as wind turbines, solar panels, and batteries are continually being innovated and getting cheaper. That sort of progress simply isn't the case for the oil and gas industry, as the Los Angeles Times noted.
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Do you think gas stoves should be banned nationwide? Click your choice to see results and speak your mind. |
No way 👎 Putting capital into fossil fuel companies comes with several costs. The industry itself is showing signs of a decline with companies' actions indicating less favorable views of future demand and areas of innovation.
Secondly, the use of fossil fuels exacerbates the dangerous warming of the planet. That worsens the alarming increase in extreme weather events and troubling impacts on global industries such as agriculture.
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