Energy Transition Supply-Demand Models

Global energy: supply-demand model?

This global energy supply-demand model combines our supply outlooks for coal, oil, gas, LNG, wind and solar, nuclear and hydro, into a build-up of useful global energy balances in 2023-30. We fear chronic under-supply if the world decarbonizes, rising to 5% shortages in 2030. Another scenario is that emerging world countries bridge the gap by ramping coal. Numbers can be stress-tested in the model.

Useful global energy demand grew at a CAGR of +2.5% per year since 1990, and +3.0% per year since 2000. Demand would ‘want’ to grow by +2% per year through 2030, due to rising populations and rising living standards (model here). We have pencilled in +1.75% pa growth to this model to be conservative.

Combustion energy is seen flat-lining in our net zero scenario. This includes global coal use peaking at 8.4GTpa in 2024 then gently easing to 2010 levels by 2030 (model here). It includes oil demand, rising to 102Mbpd in 2024 (data here), then plateauing (model here) as OPEC and US shale (model here) offset the decline rate impacts of conventional under-investment. It includes risked LNG supplies rising +70% from 400MTpa in 2022 to almost 700MTpa by 2030 (model here). While our roadmap to net zero would need to see global gas growing at +2.5% per year through 2050 (model here), this data-file has pencilled in flat production in 2022->30, as we think that latter scenario currently looks more likely to transpire.

Renewable energy is exploding. Our model of wind and solar capacity additions is linked here and discussed here. In our roadmap to net zero, solar more than doubles from c220GW of new adds in 2022 to 500GW by 2030, while wind rises from c100GW of new adds in 2022 to 150GW by 2030.

Other variables in the model include rising energy efficiency (note here), the need for a nuclear renaissance (note here) and other variables that can be flexed.

What is wrong with this balance is that it does not balance. The assumptions pencilled into the model see an under-supply of global energy of about 3% in 2025, rising to 5% in 2030. I.e., by 2030, the world will be “half a Europe” short of energy. The first law of thermodynamics dictates that energy demand cannot exceed supplies. So what would it take to restore the balance? Well, pick your poison…

(1) Slower demand growth could re-balance the model. Very high energy prices might mute demand growth to only +1.25% per year, although this would be the slowest pace of demand growth since the Great Depression, lower even than during the oil shocks (useful data here). Unfortunately, our view is that pricing people out of the global energy system in this way is in itself an ESG catastrophe.

(2) Ramping renewables faster could re-balance the model, although it would require an average of 1 TW pa of wind and solar capacity additions each year in 2024-30, and over 2 TW pa of wind and solar additions by 2030 itself, which is 3x higher than in our roadmap to net zero (discussion here). For perspective, this +2TWpa solution requires primary energy investment to quadruple from $1trn pa to at least $4trn pa, which all needs to be financed in a world of rising rates. It means that global wind and solar projects will consume over 200MTpa of steel, which is 2x total US steel production, and yet steel would not even qualify as a ‘top ten’ bottleneck, in our wind bill of materials or solar bill of materials. This scenario also requires a 3x faster expansion of power grids and power electronics than our base case estimates (see the links). Is any of this remotely possible?

(3) Continue ramping coal? The main source of global energy demand growth is the emerging world. The emerging world is more likely to favor cheap, dirty coal. Or worse, deforestation for firewood. Thus another way to ameliorate under-supply in our global energy supply-demand balance is if global coal continues growing, reaching a new peak of 9GTpa in 2030. Unfortunately, this scenario also sees global CO2 hitting a new peak of 54GTpa in 2030.

(4) Pragmatic gas? Another means of re-balancing the global energy system is if global gas production rises at 2.5% per year, which is the number required, and that is possible, on the TSE roadmap to net zero (model here). This scenario does see global CO2 falling by 2030. The main problem here is that pragmatic natural gas investment has become stranded in no man’s land, within a Manichean duality of fantasies and crises.

(5) Some combination? The world is complex. It is unlikely that a single lever will be pulled to resolve under-supply in our global energy supply-demand balance. In 2023, we think economic weakness will mask energy under-supply, mute energy prices, and lure many decision makers into looking at spot pricing and thinking “everything is fine”. Please download the model to stress-test the numbers, and different re-balancing solutions…

Global plastic demand: breakdown by product, region and use?

Global plastic is estimated at 470MTpa in 2022, rising to 1,000MTpa by 2050. This data-file is a breakdown of global plastic demand, by product, by region and by end use, with historical data back to 1990 and our forecasts out to 2050. Our top conclusions for plastic in the energy transition are summarized below.

Global plastic demand is estimated at 470MTpa in 2022. For perspective, the 100Mbpd global oil market equates to around 5bn tons per year of crude oil, showing that plastics comprise almost 10% of total global oil demand.

Our outlook in the energy transition sees increasing demand for polymers, most likely to 1,000MTpa by 2050. Many polymers are crucial inputs for new energies. Others are used for high-grade insulation, both thermal and electrical. Others for light-weight composites, which lower the energy consumption of transportation technologies.

Global plastic demand by region. The top billion people in the developed world comprise 12% of the world’s population, but 40% of the world’s plastic demand. We see developed world plastics demand running sideways through 2050, while emerging world demand doubles from 300MTpa to 700MTpa (charts below).

Global plastic demand CAGR? Our numbers are not aggressive and include a continued deceleration in the total global demand CAGR, from 7.5% pa growth in the twenty years ending in 1980, to 6% pa in the twenty years ended 2000, to 3.3% pa in the twenty years ended 2022 and around 2.5% pa in the period ending 2050.

Global plastic consumption per capita. Our numbers include an enormous policy push against waste in the developed world, where consumption today is around 170 kg of plastics per person per year. Conversely, plastic demand in the emerging world is 75% lower and averages 40 kg pp pa today, seen rising to 90 kg pp pa by 2050.

Upside to plastics demand? What worries us about these numbers is that they require historical trends to slow down. Historically, each $k pp pa of GDP is associated with 4kg pp pa of plastic demand. But our numbers assume slowing demand in the developed world and slowing demand in the emerging world (chart below).

Please download the model to stress-test your own variations. Underlying inputs are drawn from technical papers, OECD databases and Plastics Europe. The forecasts are our own.

Plastic demand by end use is broken down in the chart below. 35% of today’s plastics are used as packaging materials, 17% as construction materials and c10% for textiles.

The strongest growth outlook is in electrical products (currently 7-9%) and light-weighting transportation. There are few alternatives to plastics in these applications. Conversely, for packaging materials, we see more muted growth, and more substitution towards bioplastics and cellulose-based products from companies such as Stora Enso.

Upside for plastics in the energy transition is especially important, with plastics used in important components of the energy transition, from EVA encapsulants in solar panels, to the resins in wind turbine blades, to strong and light-weight components in more efficient vehicles, to polyurethane insulating materials surrounding substantively all electric components, batteries and vehicles. Of particular note are fluorinated polymers, where the C-F bond is highly inert, and helps resist degradation in electric vehicle batteries.

Plastic demand by material is broken down in the chart below. Today’s market is c20% polypropylene, c15% LDPE, and other large categories with >5% shares include HDPE, PVC, PET, Polyurethanes and Polystyrenes. We think the strongest growth will be in more recyclable plastics, materials linked to the energy transition, and next-gen materials that underpin new technologies such as additive manufacturing.

Feedstock deflation is likely to be a defining theme in the energy transition, as many polymers draw inputs from the catalytic reforming of naphtha. Today, 70% of BTX reformate is blended into gasoline, but we see this being displaced by the rise of electric vehicles, with particular upside for the polyurethane value chain.

Decarbonizing plastic production is also a topic in our research. As a starting point, our ethane cracker model is linked here, and our economic model for converting olefins into polymers is here. CO2 intensity of different plastics from different facilities is tabulated here.

Plastic recycling. We also see potential for plastic-recycling technologies to displace 8-15Mbpd of potential oil demand growth (i.e., naphtha, LPGs and ethane) by 2060, compared to a business-as-usual scenario of demand growth. All of our plastic recycling research is linked here. After a challenging pathway to de-risking this technology, we see front-runners emerging, such as Agilyx, Alterra and Plastic Energy.

Global gas: is there enough gas for energy transition?

Global gas production is forecasted to double from 400bcfd in 2023 to 800bcfd in 2050.

Our roadmap to ‘Net Zero’ requires doubling global gas production from 400bcfd to 800bcfd, as a complement to wind, solar, nuclear and other low-carbon energy. This data-file quantifies global gas production forecasts by country, what do you have to believe about global gas reserves, and is there enough gas?

Global gas production already doubled in the c30 years from 1990-2019, rising at a 2.5% CAGR, which is the same trajectory that needs to be sustained to 2050 on our long-term energy market supply-demand balances.

Amazingly, from 1990-2019, global gas reserves increased from 4,000 TCF to 7,000 TCF, for a reserve replacement ratio of 190%, although the numbers have been cyclical and have fallen below 100% in recent years (chart below).

Another fascinating feature of gas markets is their flexibility, which is shown by plotting monthly gas production by country and over time (chart below). Across the Northern Hemisphere, production runs 6% higher than the annual average in December-January and 6% lower than average in June-August, as producers consciously flex their output to meet fluctuations in demand. Gas output does not show volatility, but voluntarity!

Global gas production by month is typically 15-20bcfd higher than average in Northern Hemisphere winter months and 15-20bcfd lower in Northern Hemisphere summer months, due to variations in heating demand

On our numbers through 2050, as part of the energy transition, a reserve replacement ratio of 107% is needed, while the ‘reserve life’ (RP ratio) will likely also decline from around 50-years today to 25-years in 2050. Please download the data-file for reserve numbers and production numbers by country.

Onshore resource extensions are seen primarily coming from shale, with continued upside in the US, and vast new potential in the Middle East, North Africa and possibly even European shale as a way of replacing Russian gas.

Another offshore cycle is also seen to be necessary, discovering and developing an average of 45 TCF of offshore resources each year in 2023-2050. These are big numbers, equivalent to discovering a large new gas basin (e.g., an “entire Mozambique of gas”) every 3-5 years.

Our best guesses for how a doubling of global gas production might unfold is captured in this model of global gas production forecasts by country/region and global gas reserves. On the other hand, there is no guarantee that coal-to-gas switching will occur on the needed scale for global decarbonization, especially as 2023/24 has seen emerging world countries (India, China) ramping coal instead for energy security reasons.

Global coal production: supply outlook in energy transition?

Global coal production likely hit a new all-time peak of 8.7GTpa in 2023, of which 7.5GTpa is thermal coal and 1.2GTpa is metallurgical. The largest countries are China (4.4GTpa), India (1GTpa), other Asia (0.7GTpa), Europe (0.5GTpa) and the US (0.5GTpa). This model explores what is required to meet our energy transition aspirations.

Coal can be the cheapest thermal energy source on the planet. In normal times, coal costs $60/ton (coal mining model here) and contains 6,250 kWh/ton of thermal energy, implying a cost of 1c/kWh-th.

Coal-fired power can thus cost 2-4c/kWh (model here) and an existing coal plant is cheaper than other levelized costs of power.

Coal is the highest-carbon fossil fuel, with an average CO2 intensity of 0.37 kg/kWh-th (data here), which is 2x more than gas (note here).

The CO2 disparity is amplified further when considering coal’s Scope 1+2 emissions, as often coal mining leaks more methane than gas itself. And Rankine steam cycles fueled by coal have efficiency drawbacks (note here) and also relatively low flexibility (data here).

Hence our Roadmap to Net Zero would need to see coal consumption flat-lining from 2022, then declining at 8% pa in the 2030s and 17% pa in the 2040s, to well below 500MTpa (which in turn is abated by CCS or nature-based solutions).

This is sheer fantasy, unless wind, solar and natural gas ramp up enormously, especially in China, India and other parts of the Emerging World. Coal-to-gas switching economics are profiled here.

Some encouraging precedent come from the US, where coal production peaked at 1GTpa in the 2010s, before shale gas ramped to 80bcfd. Thus US coal declined to 500MTpa in 2021. Although questions about the continued phase-back of US coal are now being raised, due to pipeline bottlenecks from the Marcellus, and energy crisis in Europe, requiring a substitution of Russian energy supplies (oil, coal and gas).

There is always a danger of drawing lines on charts, which simply reflect aspirations, blindly projected out to 2050. The real world may not follow a straight line of pragmatic progress, but instead fluctuate between fantasy and crisis.

During times of energy crisis, such as 2022, international coal prices have spiked to $340/ton. Remarkably, this took thermal coal prices above metallurgical coal, and even above oil on a per-btu basis. Western coal producers are screened here.

Metallurgical coal may be particularly challenging to substitute. We have reviewed the costs of green steel here. We have seen some interesting but smaller-scale options in bio-coke. We have been less excited by hydrogen or syngas from gasification of coal.

Around 1GTpa of new coal projects are in planning or under construction, of which half are in China. Chinese coal production is something of a ‘wildcard’, explored in our short note here, and often defying expectations to the upside, despite rising renewables (chart below). Helping China to decarbonize might require 300bcfd of gas (roadmap here).

India’s coal use has also doubled since 2007, rising at 6% pa. It remains “the engine of global coal demand”, according to the IEA, rising +70MTpa, to 1.1GTpa in 2022, 1.3GTpa in 2023 and 1.4GTpa in 2026.

Please download the data-file to stress-test assumptions around coal mine additions, decline rates, phase-downs and coal-to-gas switching.

US shale: outlook and forecasts?

What outlook for US shale in the energy transition? This model sets out our US shale production forecasts by basin. It covers the Permian, Bakken and Eagle Ford, as a function of the rig count, drilling productivity, completion rates, well productivity and type curves. US shale likely adds +1Mbpd/year of production growth from 2023-2030, albeit flatlining in 2024, then re-accelerating on higher oil prices. Our shale outlook is also summarized below.

What outlook for shale in energy transition?

Shale is a technology paradigm where well productivity has risen by 3-7x over the past decade, through ever greater digitization. Shale economics are very strong, with 20% IRRs at $50/bbl oil on shale oil (model here) or at $2.8/mcf on shale gas (model here). We think 100bn bbls of recoverable shale resources remain in the US and ultimately, liquids production could be ramped up from 10Mbpd in 2023 to 17Mbpd by 2030 (note here), and most of this will be needed as energy shortages loom.

However the US shale industry has shifted its focus towards capital discipline and ESG. US shale averages 10kg/boe on a Scope 1 upstream basis (data here), shale oil averages 25kg/boe on a full Scope 1&2 basis running up to the refinery gate (data here) and 55kg/boe on a refined basis running up to the point of combustion (data here). The spread is wide, after comparing and contrasting 425 companies here and here. The best decarbonization opportunities for shale are mitigating flaring and methane leaks followed by electrification. Ultimately, we think the best operators could reach CO2 neutrality.

The most important questions on shale are how the resource base and well productivity will trend. This has been the topic of our shale research, and our latest views are covered in our 2024 shale outlook. Historically, we have also undertaken large reviews of the pace of shale technology progress, based on technical papers (examples here and here). There are fifty variables to optimize. And we are most excited about big data techniques, fiber optics and shale-EOR.

Modelling US shale production by basin?

Our model for US shale production looks at each of the main basins, using a factor breakdown. Total production in month T1 = Total production in month T0 + new additions – base declines. To calculate new monthly additions, we multiply (a) number of rigs running (b) wells drilled per rig per month (c) wells completed per well drilled (d) initial production of newly completed wells (IP30). And to calculate the base declines, we fit a best-fit type curve onto the new additions from past months. This model has worked quite smoothly for 6-years now, including history going back to 2011 and forecasts going out through 2030.

The Permian basin is the largest US shale oil basin, with 8Mbpd of total liquids production in 2023. Over the past six years from 2017-2023, the Permian basin has seen an average of 340 rigs running, drilling an average of 1.2 wells per rig per month, completing 1.06 wells for every well drilled (DUC drawdown) at an initial production rate of 780bpd (IP30 basis), adding +850kbpd/year of new supply to global oil markets. We still see strong growth potential, and the Permian could reach 14Mbpd of total liquids production by 2030, amidst higher activity and oil prices. All of these variables can be stress-tested in the model.

The Bakken is the second largest US shale oil basin, with 1.3Mbpd of total liquids production in 2023. Over the past six years from 2017-2023, the Bakken has seen an average of 40 rigs running, drilling an average of 1.9 wells per rig per month, completing 1.15 wells for every well drilled (DUC drawdown) at an initial production rate of 780bpd (IP30 basis), adding +20kbpd/year of new supply to global oil markets. We see a decline in 2024, a recovery in 2025-26 and a plateau through 2030.

The Eagle Ford is the third largest US shale oil basin, with 1.1Mbpd of liquids production in 2023. Over the past six years from 2017-2023, the Eagle Ford has seen an average of 60 liquids-focused rigs running, drilling an average of 2.1 wells per rig per month, completing 1.22 wells for every well drilled (DUC drawdown) at an initial production rate of 680bpd (IP30 basis), but liquids production has actually declined, especially during the volatility of the COVID years. We see a decline in 2024, a recovery in 2025-26 and a plateau through 2030.

Challenges and controversies for US shale?

The main revisions to our shale production models have been because of lower activity, as capital discipline has entrenched through the shale industry. The chart below shows our forecasts for activity levels at different, prior publication dates of this model. We have compiled similar charts for all of the different variables and basins, in the ‘revisions’ tab, to show how our shale numbers have changed.

Our shale outlook for 2023-2030 sees the potential for +1Mbpd of annual production growth as the industry also generates $150-200bn per year of annual free cash flow. You can stress test input variables such as oil prices in the model.

We have also modeled the Marcellus and Haynesville shale gas plays, using the same framework, in further tabs of the data-file. Amazingly, there is potential to underpin a 100-200MTpa US LNG expansion here, with just 20-50 additional rigs. Although recently we wonder whether the US blue hydrogen boom will absorb more gas and outcompete LNG, especially as the US Gulf Coast becomes the most powerful clean industrial hub on the planet (note here).

International shale? We have found it harder to get excited about international shale, but there is strong potential in other large hydrocarbon basins, if European shale is ever considered to rescue Europe from persistent gas shortages, and less so in China.

Please download the data-file to stress-test our US shale production forecasts by basin.

Internet energy consumption: data, models, forecasts?

This data-file forecasts the energy consumption of the internet, rising from 800 TWH in 2022 to 2,000 TWH in 2030 and 3,750 TWH by 2050. The main driver is the energy consumption of AI, plus blockchains, rising traffic, and offset by rising efficiency. Input assumptions to the model can be flexed. Underlying data are from technical papers.

Our best estimate is that the internet accounted for 800 TWH of global electricity in 2022, which is 2.5% of all global electricity. Despite this area being a kind of analytical minefield, we have attempted to construct a simple model for the future energy demands of the internet, which decision-makers can flex, based on data and assumptions (chart below).

Internet traffic has been rising at a CAGR of 30%, as shown by the data use of developed world households, rising to almost 3 TB per user per year by 2023. The scatter also shows a common theme in this data-file, which is that different estimates from different sources can vary widely.

Future internet traffic is likely to continue rising. By 2022 there were 5bn global internet users underpinning 4.7 Zettabytes (ZB) of internet traffic. Users will grow. Traffic per user will likely grow. We have pencilled in some estimates, but uncertainty is high.

TSE's estimates for future numbers of internet users, data traffic per user, and total data traffic.

The energy intensity of internet traffic spans across data-centers, transmission networks and local networking equipment. Again, different estimates from different technical papers can vary by an order of magnitude. But a first general rule is that the numbers have declined sharply, sometimes halving every 2-3 years.

Electricity use of data centers, data transmission, and local network systems from 2009 to 2023.

The current energy intensity of the internet is thus estimated at 140 Wh/GB in our base case, broken down in the waterfall chart below, using our findings from technical papers and the spec sheets of underlying products (e.g., offered by companies such as Dell).

Energy intensity of internet processes will almost certainly decline in the future, as traffic volumes rise. Again, we have pencilled in some estimates to our models, which can be flexed.

However the energy needed for AI is now rising exponentially. Training Chat GPT-3 in 2020 used 1.3 GWH to absorb 175bn parameters. But training chat GPT-4 in 2023 used 50 GWH to absorb 1.8trn parameters. We find a 98% correlation between AI training energy and the total compute during training.

AI querying energy is also correlated with the complexity of the AI model, and thus will likely continue rising in the future. Average energy use is estimated at 3.6 Wh per query today, which is 4x more than an email (1 Wh) and 10x more than a google search (0.3 Wh).

Muting the impacts of larger data-processing volumes, we expect a 40x increase in future computer performance in GFLOPS per Watt (chart below). This yields 900 TWH of AI demand around 2030, revised up from 500 TWH in April-2023 (chart above).

Please download the model to stress-test your own estimates for the energy intensity of the internet. It is not impossible for total electricity demand to ‘go sideways’ (i.e., it does not increase). It is also possible for the electricity demand of the internet to exceed our estimates by a factor of 2-3x if the pace of productivity improvements slows down.

Global oil production by country?

Global oil production by country by month is aggregated across 35 countries that produce >80kbpd of crude, NGLs and condensate, explaining >96% of the global oil market. Production has grown by almost +1Mbpd/year over the past two-decades, led by the US, Iraq, Russia, Canada. Oil market volatility is usually very low, at +/- 1.5% per year, of which two-thirds is down to conscious decisions over production levels.

Monthly global oil production by country is aggregated in this data-file, aggregating data from JODI, the International Energy Agency, the Energy Institute and individual countries’ national hydrocarbon registries, then extensively scrubbing and cleaning the data. This gives us month-by-month visibility on about 97% of the global oil market.

In particular, the data cover 35 countries with over 80kbpd of production (crude, NGL and condensate), which comprise 96% of the global oil market. Of this sample, 25 countries with over 600kbpd of production comprise 93% of the global oil market; 10 countries with over 2.5Mbpd of production comprise 75% of the global oil market; and 4 countries with over 5Mbpd of production comprise 50% of the global oil market (the United States, Saudi Arabia, Russia and Canada).

Global oil production has grown by almost +1Mbpd per annum over the past 20-years, matching the trend in global oil demand by country.

The largest increases in oil production have come from the United States (+0.6Mbpd/year, due to US shale growth), Iraq (>0.1Mbpd/yr), Russia (>0.1Mbpd), Canada (>0.1Mbpd), Brazil (0.1Mbpd), UAE (<0.1Mbpd), Saudi Arabia (<0.1Mbpd), Kazakhstan (<0.1Mbpd).

Conversely, the largest declines in oil production by country have come from Venezuela, Mexico, the UK, Norway (all <0.1Mbpd/year).

The volatility of global oil markets is low compared to new energies. Across the 20-year period from 2003-2023, the standard deviation of YoY monthly oil production is 3Mbpd, for a standard error of 3.4%. However, excluding the volatility during the COVID-19 pandemic from 2020 onwards, the standard deviation of YoY monthly oil production is 1.8Mbpd, for a standard error of 2%. And after smoothing out over a TTM basis, this falls even further to 1.2Mbpd, for a 1.5% standard error.

Volatility or voluntary? Countries such as Saudi Arabia, Kuwait, UAE, the US, Canada and Russia very clearly adapt their growth/output to market pricing signals, which actually dampens down supply volatility. Countries with the highest volatility in their production are Libya (standard error of +/- 35% of average output, on a TTM basis), Iran, Iraq, Venezuela and Nigeria (all around +/- 10%). Full details in the data-file.

Global steel supply-demand model?

Global steel supply-demand runs at 2GTpa in 2023, having doubled since 2003. Our best estimate is that steel demand rises another 80%, to 3.6GTpa by 2050, including due to the energy transition. Global steel production by country is now dominated by China, whose output exceeds 1GTpa, which is 8x the #2 producer, India, at 125MTpa.

Global steel demand is running at 2GTpa in 2023, having doubled since 2003. Our best estimate is that steel demand will rise by another 80%, to 3.6GTpa by 2050, including due to the energy transition.

Specifically, passenger vehicles currently use 200MTpa of steel, which doubles to over 400MTpa, as energy transition requires a rapid build-out of electric vehicles alongside increasing turnover of the vehicle fleet. These numbers are based on breaking down the mass of vehicles and our forecasts for passenger vehicle volumes.

Other energy uses of steel currently consume around 250MTpa of steel, which we think will double to 500MTpa, across wind turbines, expanding power grids, and CCS infrastructure. These numbers are dominated by the expansion of the global power grid. And by building out renewables, primarily wind.

Another major trend in our analysis is shifting towards lighter-weight materials, especially to reduce the weight of passenger vehicles, displacing steel with aluminium, glass fiber, carbon fiber, mass timber, advanced polymers. Indeed, steel demand could exceed 4GTpa by 2050, if we were not assuming 2x growth in global plastics to 1GTpa.

Some humility is warranted when analyzing global steel markets in aggregate, overlooking the differences between 500 different products/grades, made via three different pathways (blast furnace, DRI, EAF), and for which there are c80 different decarbonization options currently swirling. We use a regression to GDP to estimate ‘other demand’ in our model, which can be flexed in the model.

On the other hand, global steel supply reads like something out of a George Orwell novel. Back in 1950, when Nineteen Eighty-Four was first published, there really were three world super-powers — the US, the Soviet Union and Europe — producing over 90% of the world’s steel. Really the chart below shows the history of the world post World War II.

Since 1950, the US has declined from 40% of the world’s steel to 4%. Europe has declined from 35% to 7%. Meanwhile China now produces over 1GTpa of steel, more than half of the global total, an order of magnitude more than the world’s #2 producer (India, 125MTpa) and #3 producer (Japan, 90MTpa).

Geopolitics matters in the energy transition, and we cannot help feeling that the world is careening towards a strange dichotomy between carbon-abolitionist nations and carbon-emitting industrial titans, somehow strangely reminiscent of the United States in the 1840s and 1850s.

Global tin demand: upside in energy transition?

Global tin demand stands at 400kTpa in 2023 and rises by 2.5x to 1MTpa in 2050 as part of the energy transition. 50% of today’s tin market is for solder, which sees growing application in the rise of the internet, rise of EVs and rise of solar. Global tin supply and demand can be stress-tested in the model.

Global tin demand exceeds 400kTpa in 2023, in a market worth $10bn per year. 50% of the market is for solder, i.e., conductive material with a melting point around 180-200ºC, used to affix electrical connections onto circuit boards in semiconductors.

Global tin demand rises 2.5x as part of the energy transition, reaching 1MTpa by 2050. Mechanically, our model is linked to our model for solar additions, our model for global vehicle sales, our model for the rise of the internet and our model for global electricity demand.

Demand forecasts can be stress-tested in the data-file, varying with GDP (chart below), future growth of solar, EVs and digital devices, phasing out of lead acid batteries for other battery alternatives and intensity of use factors: e.g., how much tin is used in a solar cell (in g/kW) or in an electric vehicle (in kg/vehicle).

Our historical tin demand data is sourced from the International Tin Association and technical papers, while our historical supply demand is sourced from the USGS.

Primary global tin production is sourced almost entirely from emerging world countries, of which 30% is China, 25% is Indonesia, 15% is Myanmar and c10% is Peru (chart below). Hence primary production is dominated by emerging market firms.

Two listed European companies with exposure to tin are also noted in the data-file. One is a metals recycling company, Aurubis, and the other has the world’s leading technology for tin-smelting.

Global hydrogen supply-demand: by region, by use & over time?

Global production of hydrogen is around 110MTpa in 2023, of which c30% is for ammonia, 25% is for refining, c20% for methanol and c25% for other metals and materials. This data-file estimates global hydrogen supply and demand, by use, by region, and over time, with projections through 2050.

Global production of hydrogen is 110MTpa in 2023, of which c30% is for ammonia, 25% is for refining, c20% for methanol and c25% for other metals and materials (e.g., hydrogen peroxide) (chart below).

Many commentators also see a growing role for hydrogen meeting global energy demand. Although we have been more cautious over the costs, practicalities and other competition for high-quality clean energy. Especially in a world that is substantially short of primary energy to make hydrogen through 2030.

Global hydrogen production most likely emits 1.3GTpa of CO2 today, with an average CO2 intensity of 12 tons/ton, comprising 85MTpa of grey hydrogen emitting 9 tons/ton of CO2 and 25MTpa of black hydrogen emitting 25 tons/ton of CO2.

The purpose of this global hydrogen supply model is to project out global hydrogen supply demand through 2050, as a function of our outlooks for refineries, basic chemicals, other metals and materials, energy and global decarbonization.

From this, we can calculate how much disruption lies ahead for the industrial gases industry? For blue hydrogen (or turquoise hydrogen), what volume of input natural gas is required in bcfd, and how much CO2 must be disposed of by the midstream industry?

For green hydrogen, how much electricity will be used to produce green hydrogen, and other e-fuels, by region, and over time?

To build up our forecasts, the data-file captures hydrogen production by region in the US, Europe, Canada, Japan, Australia, LatAm, China, India, Other Asia and Africa. All estimated from 1990 to 2050.

The outlook is uncertain which means it can be useful to compare different scenarios, via a model. Assumptions in this data-file can be stress-tested by adjusting the cells marked in yellow. Including the share of black, grey, blue and green hydrogen in the future energy mix, by region.

What outlook for shale in energy transition?

Modelling US shale production by basin?

Challenges and controversies for US shale?

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