JP Morgan: Don’t expect a ‘shocking’ transition in energy markets | OilPrice.com

The dream of energy transfer is in stark contrast to the reality of the much-anticipated funding for behavioral changes needed for deep global decentralization.

This is one of the key messages from JP Morgan 2021 Annual Power Paper The International Energy Agency (IAEA) must immediately invest in new oil, gas and coal supplies as soon as the world reaches zero zero emissions by 2050.

Enthusiastic about electric vehicles and solar and wind power, many fans, and even IEA analysts believe that new technologies can capture carbon, hydrogen production and industrial use, increase solar and wind loads, and increase energy consumption on a regular basis. In the next few decades, it will be enough to change the world of power.

Michael Semblest, chairman of JP Morgan’s Asset Management Marketing and Investment Strategy, warns against bankruptcy.

The world is still dependent lot of On fossil fuels, and even with record growth, renewables are solving a small part of the carbon footprint problem — electricity. But electricity accounts for only 18 percent of the world’s total energy consumption, notes Simbalest.

Four major obstacles to deep decarbonation

“In other words, the direct use of fossil fuels is still a major factor in the modern world, because fossil fuels continue to be predicted by the power of the future,” writes Simbalest.

The rise of renewable energy is moving the world towards decarbonation, but wind and energy still account for only 5 percent of global energy consumption, says JP Morgan.

The bank’s 44-page paper states: “Without decarbonation shock treatment, people get married more than they need to in petroleum and other fossil fuels.

The world needs more oil and gas than environmentalists want, because no one wants a “shocking” transition and a major disruption to the world economy, energy systems and human life.

But it could be much longer if policy makers decide to zero net by 2050, as JP Morgan will face new challenges in the field of new technologies, with the exception of power generation. These challenges also arise because those policymakers estimate how much money and effort the actual transition will cost.

“The general message of this paper is not climate nihilism. The behavioral, political, and structural changes required for deep decarbonation are still not seriously considered, ”said Sebaschist.

Related – The main reason is that fuel prices do not exceed $ 80 per barrel

Although it is appreciated for renewable energy and EV sales or hydrogen and carbon retention projects, decarbonation is slowing down.

JP Morgan identified four major obstacles to rapid deep decarbonation. These include slow EV penetration, massive improvements to transmission infrastructure, challenges to geological carbon sequencing, and industrial energy use electrification.

Norway, the world’s most beloved country, has more than 60 percent of sales of new passenger cars and is often referred to as the son of the EV boom poster. no I do not Global Average, Special, JP Morgan. For comparison, the share of light vehicle sales (EV) in the United States is expected to increase. By 2020, it was only 2 percent, according to California State University Bank.

Then “there”Dreams of transmission“The spread of the grid could be a costly, complex, and Nimbizist nest, especially in the United States.”

Carbon dioxide, CCCS is a very complex process in a few places where many power transfer forecasts are relied upon and can experience “all high altitudes.”

The world’s largest consumer of fossil fuels: Deep-carbonated industries:

Disrupted oil assets?

Considering the large challenges for decarbonation, especially in terms of expectations The growth of global energy demand“The world is not moving towards more oil and gas and is closer to the IEA Stated Policies than to sustainable development,” said Simbalest.

Under the IEA Stated Policies, no oil and gas assets will be depleted by 2070, as the world still needs more oil and gas for growing energy. Status of State Policies Not the current situationReflects some far-reaching and far-reaching goals of government legitimate or official, JP JP notes.

Earlier this year, Wood McKenzie said he could save as much as the power transition $ 14 trillion Upper Nile oil and gas assets are at risk.

“But the world still needs oil and gas supplies for decades to come, and the size of the industry will be enormous,” said Wood McKenzie vice president.

The energy transfer requires a large amount of oil

Because of the huge and very low estimate of deep decarbonation, “the companies we all trust must survive and thrive until we reach the point where we can distribute heat energy and energy,” writes Simbales.

The bank has doubled its call for oil and gas since last year and is urging investors to stick with the industry.

Due to overcrowding in 2016, the return of “big oil” to the capital fell to single digits. We expect these returns to return by 10% -15% to the 1990s, ”said JP Morgan.

Finally, the bank stated: “High fuel demand forecasts may be as erroneous as they were a generation ago.”

By Tsvetana Paraskova for Oilprice.com

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