Investigating fossil fuels
The future of fossil fuels has been long debated or precisely as technology begins to resurface more renewable energy. The question here is how soon will fossil fuel become a stranded asset? It is worth considering, investor's capitals are at stake. There is no sure investment and technology is even making disruption very rapid. As the fading off of this sector gradually stalks the financial market, there is a need for investment reshuffling. I feel it will end in a dump on someone, probably big fossil companies. They should be preparing for what is coming.
There is a need to look at its economic viability which focuses mostly on energy. This sector is really under advancement when also looking at how to curb carbonization. solar energy, wind and other low carbon emissions energy sources are NOW very prioritized. There is no U-turn from here, energy is becoming very demanding and adding to that, ease of new energy access will continue to shift both consumers and investors attention towards trending direction. The competition is high and there is no escaping a decline for fossil fuels from what I am seeing.
The fossil fuel market is a huge one, a 2022 research showed over $6 trillion in market value. Without doubt, this market is expected to experience growth. The facts remains this, urbanization is growing and the first demand for growth still remains fossils fuel to power the environment. There is an expected compound annual growth rate of 6.03% expected to span for the next decade. If this stands true, we are looking at a market value of above $11 trillion dollars. crude oil is dominating this chain with more than 45% from 2022 research.
source
Still following up from research, industries are very energy demanding, even as we aim to enter the full advancement it will take some time to phase out. transportation should not be excluded, electricity generation to power up developing countries. This sector when put together occupies over 48% market share. It seems this market is more juicy than threatening. Of course, if only you'll be able to follow up with market calendar. Technology and global demand shift is showing a phase off. It might not necessarily be soon but if you are an energy investor, planning ahead can be a smart way to hedge ahead of what's coming
2050: net-zero emission
Have you heard the global goal of achieving a net-zero emission? What does this mean? We are looking at a decline should ALL global demands be met by then. Upcoming investors should really note this when considering long term and generational investment. 2050 is 26 years from now, there is still breathing space to make the most of it. Nevertheless, one needs to be cautious after a decade and a half. From my views, investors will start exiting the fossil fuel market especially those holding long terms positions. We should be seeing a lot of short behaviors from here and this layoff will drive green energy markets. Solar and wind energy industries should be prepared for what is coming in the next two decades.
Or what if it's sooner?
source
This is also something worth considering, we should not target fossil fuel market decline to occur 26 years from now. As an investor, one needs to keep his ears on ground. What if technology surprises us in the next decade? With the introduction of low energy consuming gadgets and appliances the speed for replacement may be faster than expected. Big tech companies are stepping up production that is more solar dependent. Meaning that personal fossil fuel consumption will reduce in the process with manufacturing companies only in demand for the time being. How much energy does individual apartment consume? Energy bulbs alone has reduced household energy consumption by a valuable margin.
To conclude, let me add, the idea of fossil fuel being stranded as an investment is very possible when looking at new energy driver. Solar, wind and hybrid energy generating companies are ceasing the opportunity: the move to decarbonize the globe which helps curb global warming. The shrinking is not going to be very rapid but laydown research pegs it to 2050, will it reach such or will it even extend. The issue with government is tied down to uncertainties. With several challenges springing up daily which needs government interventions and demand we could see funds get over toggled and not channel into this energy direction. As an investor or wannabe investor, keep your research book closer, opportunity is available in the fossil industry. Keeping to right timing and investment length will be a sure determiner when opting into the fossil fuel industry
Posted Using InLeo Alpha