Inflation: will it de-rail the energy transition?

New energy policies will exacerbate inflation in the developed world,  raising price levels by 20-30%. Or more, due to feedback loops. We find this inflation could also cause new energies costs to rise over time, not fall.  As inflation concerns accelerate, policymakers may need to choose between delaying decarbonization or lower-cost transition pathways.


The importance of costs on the roadmap to net zero evokes a surprising amount of debate. We re-cap these debates, including our own roadmap on pages 2-3. Recently, organizations such as the IEA have published a roadmap, which we believe will be c10x more expensive.

The inflationary impacts of energy transition can be compared for different levels of abatement costs. Hence we discuss the concept of abatement costs, including two paradoxes, on pages 4-5.

Top-down, we calculate that each $100/ton of CO2 abatement cost would likely lead to 6% aggregate price increases in the developed world, on page 6.

Bottom-up, we model that each $100/ton of CO2 abatement cost would lead to 2-70% price increases, across a basket of twenty different goods and commodities, on pages 7-8. The impacts are regressive and basic goods and staples rise more.

An additional source of inflation comes from supply-demand dynamics, as some materials will be dramatically under-supplied in the energy transition (page 9).

What does it mean for new energies? To answer this question, we bridge the impacts of all these cost increases in our models of wind, solar, hydrogen and batteries, on pages 10-12. There are surprising feedback loops, which could amplify inflation.

No brakes? We also find that the usual mechanism to slow inflation is blunted by the need for an energy transition, on pages 13-14. Hence if inflation accelerates, it could surprise by a wide margin.

Our conclusion is that policy-makers and companies should consider costs more closely, while there are measures for investors to inflation-proof portfolios.

Britain’s industrial revolution: what happened to energy demand?

Britain’s remarkable industrialization in the 18th and 19th centuries was part of the world’s first great energy transition. In this short note, we have aggregated data, estimated the end uses of different energy sources in the Industrial Revolution, and drawn five key conclusions for the current Energy Transition.


In this short note, we have sourced and interpolated long run data into energy supplies in England and Wales, by decade, from 1560-1860. The graph is a hockey stick, with Britain’s total energy supplies ramping up 30x from 18TWH to 515TWH per year. Part of this can be attributed to England’s population rising 6x, from around 3M people to 18M people over the same timeframe. The remainder of the chart is dominated by a vast increase in coal from the 1750s onwards.

A more comparable way to present the data is shown below (and tabulated here). We have divided through by population to present the data on a per-capita basis. But we have also adjusted each decade’s data by estimated efficiency factors, to yield a measure of the total useful energy consumed per person. For example, coal supplies rose 40x from 1660 to 1860, but per-capita end use of coal energy only rose c6.5x, because the prime movers of the early industrial revolution were inefficient. This note presents our top five conclusions from evaluating the data.

Five Conclusions into Energy Demand from the Industrial Revolution

(1) Context. Useful energy demand per capita trebled from 1MWH pp pa in the 1600s to over 3MWH pp pa in the mid-19th century, an unprecedented increase.

For comparison, today’s useful energy consumption per capita in the developed world is 6x higher again, as compared with the 1850s. A key challenge for energy transition in the developed world is that people want to keep consuming 20MWH pp pa of energy, rather than reverting to pre-industrial or early-industrial energy levels. As a rough indicator, 20MWH is the annual energy output of c$120-150k of solar panels spread across 600 m2 (model here).

Furthermore, today’s useful energy consumption in the emerging world is only c2x higher than Britain in the 1860s. I.e., large parts of the emerging world are in very early stages of industrialization, comparable to where Britain was 150-years ago. Models of global decarbonization must therefore allow energy access to continue rising in the emerging world (charts below), and woe-betide any attempt to stop this train.

(2) Shortages as a driver of transition? One of the great cliches among energy analysts is that we “didn’t emerge from the stone age because we ran out of stone”. In Britain’s case, in fact, the data suggest we did shift from wood to coal combustion as we began to run out of wood.

Wood use and total energy use both declined in the 16th Century, and coal first began ramping up as an alternative heating fuel (charts above). In 1560, Britain’s heating fuel was 70% wood and 30% coal. By 1660, it was 70% coal and 30% wood. This was long before the first coal-fired pumps, machines or locomotives.

This is another reminder that energy transitions tend to occur when incumbent energy sources are under-supplied and highly priced, per our research below. Peak supply tends to preceed peak demand, not the other way around.

(3) Energy transition and abolitionism? Amazingly, human labor was the joint-largest source of useful energy around 1600, at c25% of total final energy consumption. But reliance upon human muscle power as a prime mover was bound up in one of the greatest atrocities of human history: the coercion of millions of Africans, slaves and serfs; to row in galleys, transport bulk materials and work land.

By the time Britain banned the slave trade in 1807, human muscle power was supplying just 10% of usable energy. By the time of the Abolition Act in 1833, it was closer to 5%.

Some people today feel that unmitigated CO2 emissions is an equally great modern-day evil. On this model, it could be the vast ramp-up of renewable energy that eventually helps to phase out conventional energy. But our current models below do not suggest that renewables can reach sufficient size or scale for this feat until around 2100.

What is also different today is that policy-makers seem intent on banning incumbent energy sources before we have transitioned to alternatives. We have never found a good precedent for bans working in past energy systems. Although US Prohibition, from 1920-1933, makes an interesting case study.

(4) Jevons Paradox states that more efficient energy technologies cause demand to rise (not fall) as better ways of consuming energy simply lead to more consumption.

Hence no major energy source in history has ‘peaked’ in absolute terms. Even biomass and animal traction remain higher in absolute terms than before the industrial revolution, both globally and in our UK data from 1560-1860.

Jevons Paradox is epitomized by the continued emergence of new coal-consuming technologies in the chart below, which in turn stoked the ascent of coal-powered demand, while wood demand was not totally displaced.

The fascinating modern-day equivalent would suggest that the increasing supply of renewable electricity technologies will create new demand for electric vehicles, drones, flying cars, smart energy and digitization; rather than simply substituting out fossil fuels.

(5) Long timeframes. Any analysis of long-term energy markets inevitably concludes that transitions take decades, even centuries. This is visible in the 300-year evolution plotted above, and in the full data-set linked below. Attempts to speed up the transition create the paradox of very high costs or potential bubbles. We have also compiled a helpful guide into transition timings by mapping twenty prior technology transitions. Our recent research, summarized below, covers all of these topics, for further information.


Source: Wrigley, E. A. (2011). Energy and the English Industrial Revolution, Cambridge, TSE Estimates. With thanks to the Renewable Energy Foundation for sharing the data-set.

The Amazon tipping point theory?

The Amazon tipping point theory postulates that another 2-10% deforestation could make the world’s largest tropical rainforest too dry to sustain itself. Thus the Amazon would turn into a savanna, releasing 80GT of carbon into the atmosphere, single-handedly inflating atmospheric CO2 by 40ppm (to well above the 450ppm limit for 2C warming). This matters as Amazon deforestation rates have already doubled under Jair Bolsonaro’s presidency. This note explores implications, including international tensions, divestments, prioritization in a Biden presidency, and consequences for other transition technologies.


Global deforestation remains the single largest contributor to CO2e-emissions induced by man’s activities, more than the emissions from all passenger cars; and destruction of nature remains the largest overall contributor, more than all of China (chart below). This note is about a particularly worrying feedback loop in the Amazon rainforest, which could single-handedly wipe out the world’s remaining CO2 budget, effectively negating the impact of all other climate policies globally.

What is the Amazon tipping point theory?

The Amazon rainforest currently covers 5.5M square kilometers, comprising the largest, contiguous tropical forest in the world. 50% is in Brazil, and the remainder is spread around Peru, Colombia and half-a-dozen other South American countries. It contains 20% of all the planet’s plant and animal species, including 40,000 plant species alone.

Deforestation of the Amazon has reached 15-17% of its original area overall, and around 19% in Brazil. 800,000 square kilometers has been lost to-date (a land area equivalent to 2x California; or all of France plus Germany). Brazil’s annual deforestation rates have averaged 20,000 square kilometers per year from 1990-2004 (the land area of New Jersey or Slovenia). But the rate slowed to a trough of 5,000 square kilometers in 2014 due to improving environmental policies.

Unfortunately, more recently, Brazil’s deforestation rate has re-doubled (chart below). Jair Bolsonaro’s Presidency began in January-2019, following campaign pledges to ease environmental and land use regulations (which require 80% of legal Amazon land holdings to remain uncleared). Violations of these regulations are now said to be going unpunished. Bans on planting sugarcane in the Amazon have been lifted. Bolsonaro has even repudiated data published by Brazil’s own government agencies showing deforestation rates rising and accused actor and environmentalist, Leonardo DiCaprio of starting wildfires!

This matters because of the hydrology of the Amazon. Water in the basin tends to move from East to West. Each molecule typically falls as rainfall six times. It is repeatedly taken up by trees, transpired back into the atmosphere, and precipitated back down to Earth. Over half of the rain falling in the Amazon has originated from trees in the Amazon. It is a self-sustaining feedback loop.

The Amazon Tipping Point theory predicts that below some critical level of forest cover, this self-sustaining feedback loop will break. Less rainforest means less transpiration. Less transpiration means less rainfall. Less rainfall means less rainforest. Specifically, converting each hectare of forest to cropland reduces regional precipitation by 0.5M liters/year.

After the tipping point it is feared that the basin will transition into a savanna or scrubland. 50-100% of the forest cover would die back.

Unfortunately, this is not a ‘fringe’ theory. Many different technical papers acknowledge and model the risk, although specific climate models are imprecise, and do not always agree on timings and magnitudes. For example, the Western Amazon, closer to the Andes, might retain more forests than the East and Central parts of the basin. Another uncertainty is the moderating impacts of fire, as dryer forests will be more flammable, and thus more susceptible to slash-and-burn clearances, while raging fires will also reach further.

When is the tipping point? Various technical papers have estimated that the Amazon tipping point occurs when 20-25% of the forest has been cleared. This is an additional 2-10% from today’s levels, equivalent to deforesting another 100-600k acres, which could happen within 2-30 years.

What carbon stock is at risk of being released?

A typical forest contains around 300T of carbon per hectare (chart below). Thus 5.5M square kilometers of the Amazon is expected to contain 165GT of carbon. About 40% of the carbon is usually stored in trees (estimated at 60-80GT in the Amazon) and 60% is stored in roots and soils, which degrades more slowly. Hence, if just half of the remaining Amazon disappears, this would slowly release c80GT of carbon into the atmosphere.

Each billion tons (GT) of carbon released into the atmosphere is equivalent to raising atmospheric CO2 by around 0.5ppm. Hence a 80GT carbon release from the Amazon would by itself raise atmospheric CO2 from 415ppm today to around 455ppm. This single change (notwithstanding the continued and unmitigated burning of fossil fuels) would tip the world above the 450ppm threshold needed to keep global warming to an estimated 2-degrees (climate model below).

Can the tipping point be averted?

The solution to Amazon tipping points is technically simple: stop burning down forests and start re-planting them. This does not require electrolysing water molecules into hydrogen, smoothing volatility in renewable-heavy grids, or developing next-generation batteries. It requires something much harder: international diplomacy.

Inflammatory statements? In September-2019, Bolsonaro defended his environmental policies in a speech at the UN General Assembly. International critics were accused of assaulting Brazil’s sovereignty. Brazil considers itself free to prioritize economic development over environment.

Forest for ransom? In the past, Western countries have actually paid Brazil to safeguard its rainforests, although this arrangement has now fallen apart. Specifically, the ‘Amazon Fund’ was created in 2008. It is managed by Brazil’s state-owned development bank, BNDES. $1.3bn has been donated to the fund, from Norway (94%), Germany (5%) and Petrobras (1%). But after taking office, Bolsonaro has packed the fund’s steering committee with members of his inner circle, and in May-2019, he started using the Fund to compensate land developers whose lands were confiscated for environmental violations. Hence Norway and Germany suspended fund payments.

Divestment and trade tensions? As Brazil’s stance on the Amazon has grown more confrontational, it is possible that decision-makers may distance themselves from the country. Global investment funds have threatened to divest. (Could Brazil even surpass the coal industry as the divestment movement’s whipping boy?). Multi-national corporations may also be more cautious around investing in the country (but probably at the margin). Finally, Amazon deforestation is said to endanger future trade deals.

The Biden Factor? President-elect Biden may also seek to influence the Amazon issue. Biden stated the world should collectively offer Brazil $20bn to stop Amazon deforestation and threaten economic consequences for refusing. An executive order re-entering the Paris Climate Agreement would also help the situation (Brazil had actually committed to restoring 12M hectares of native vegetation under the accord). It will be interesting to see how Biden balances climate-focused priorities in the US with this arguably more urgent issue abroad.

Crucial Conclusions? If the Amazon surpasses its tipping point, there would be no chance of limiting atmospheric CO2 to 450ppm or preventing a catastrophic loss of biodiversity. Diplomacy is difficult. But fortunately, decision-makers can take measures into their own hands. Our note below profiles tree-planting charities. This is the lowest-cost decarbonization option we have found in all of our research. It restores nature, including the Amazon. Ultimately, we have argued that restoring nature may the most practical route to achieving climate objectives, while ‘bursting the bubble’ of other transition technologies.

Biden presidency: our top ten research reports?

Joe Biden’s presidency will prioritize energy transition among its top four focus areas. Below we present our top ten pieces of research that gain increasing importance as the new landscape unfolds. We are cautious that aggressive subsidies may stoke bubbles and supply shortages in the mid-2020s. Decisions-makers will become more discerning of CO2. As usual, we focus on non-obvious opportunities.


(1) Kingmaker? There are two policy routes to accelerate the energy transition. An escalating CO2 tax could decarbonize the entire US by 2050, for a total abatement cost of $75/ton, while unlocking $3.5trn of investment. The other approach is with subsidies. This is likely to be Biden’s preferred approach. However, giving subsidies to a select few technologies tends to crowd out progress elsewhere. Who gets the subsidies is arbitrary, and thus ensues a snake-pit of lobbying. It is also more expensive, with some subsidies today costing $300-600/ton. Finally, subsidies will only achieve limited decarbonization on our models. Our 14-page note outlines these ideas and backs them up with data, to help you understand the policy landscape we are entering.

(2) Bubbles? The most direct risk of aggressive subsidies is that we fear they will stoke bubbles in the energy transition. Specifically, we have argued a frightening resemblance is appearing between prior and notorious investment bubbles (from Dutch tulips to DotCom stocks) and many of the best-known decarbonization themes today. It is driven by an expectation that government policies will grow ever more favorable, thus technical and economic challenges are being overlooked. Our 19-page note evaluates the warning signs, theme by theme, to help you understand where bubbles may be likely to build and later burst.

(3) Overbuilding renewables is a potential bubble. Our sense is that Biden’s policy team prefers to subsidize renewables today and defer the resultant volatility issues for later. But eventually, we model that this will result in power grids becoming more expensive and more volatile, which could end up having negative consequences, both for consumers and industrial competitiveness. More interestingly, we find expensive and volatile grids have historically motivated installations of combined heat and power systems behind the meter, which can also cut CO2 emissions by 6-30% compared to buying power from the grid, at 20-30% IRRs. The reason is that CHPs capture and use waste heat. Thus they achieve c70-80% thermal efficiencies, where simple cycle gas turbines only achieve c40%. The theme and opportunity are therefore explored in our 17-page note below.

(4) Over-building electric vehicles? Subsidies for EVs are also more likely under a Biden presidency. This is widely expected to destroy fossil fuel demand. Indeed a vast scale-up of EVs is present in our oil demand forecasts helping global oil demand to peak in 2023. However, our 13-page note finds this electrical vehicle ramp-up will actually increase net fossil fuel demand by +0.7Mboed from 2020-35, with gains in gas exceeding losses of oil. The reason is that manufacturing each EV battery consumes 3.7x more energy than the EV displaces each year. So there is an energy deficit in early years. But EV sales are growing exponentially, so the energy costs to manufacture ever more EVs each year outweighs the energy savings from running previous years’ EVs until the EV sales rate plateaus.

(5) Under-investment in fossil fuels? A sticking point in the presidential debates was whether President Biden would ban fracking. An impressive understanding of the energy industry was shown by his response that instead “we need a transition”. However, some have commentators continued fearmongering. We think the fearmongering is overdone. Nevertheless, at the margin, Biden’s presidency may reduce investment appetite for oil and gas. In turn, this would exacerbate the shortages we are modelling in the 2020s. A historical analogy is explored in our 8-page note, which looks back at whale oil, a barbaric lighting fuel from the 19th century. Amidst the transition to kerosene and electric lighting, whale oil supply peaked long before whale oil demand, causing strong price performance for whale oil itself, and very strong price performance for by-products such as whale bone.

(6) Under-investment in oil? Our oil market outlook in 2021-25 is published below. New changes include downward revisions to US shale supplies (particularly from 2022), increased chances of production returning in Iran, and increased production from Saudi Arabia and Russia to compensate for lower output in the US. Steep under-supply is seen in 2022, over 1Mbpd, even after OPEC has exited all production cuts. Restoring market balance in 2024-25 requires incentivizing an 8Mbpd shale scale-up. We do not believe Biden’s policies will block this shale ramp, but they may help its incentive costs re-inflate by c$5-15/bbl, particularly if Trump-era tax breaks are reversed.

(7) Under-investment in gas? Where US shale growth slows, there is clearly going to be less associated gas available to feed US LNG facilities. But there may also be a lower investment appetite to construct US LNG facilities. This matters because our 12-page note below finds gas shortages are likely to be a bottleneck on decarbonization in Europe, which compounds our fears that Europe’s own decarbonization objectives could need to be walked back. Specifically, Europe must attract another 85MTpa of global LNG supplies before 2030 to meet the targets shown on the chart. This is one-third of the 240MTpa risked LNG supply growth due to occur in the 2020s, of which 100MTpa is slated to come from the United States. There is no change to our numbers yet.

(8) Lower carbon beats higher carbon? We are not fearmongering that oil and gas investment will stall under a Biden presidency. But we do believe that investment in all carbon-intensive sectors will proceed somewhat more discerningly than it would have under Trump. Low-carbon producers will be more advantaged in attracting capital, while higher-carbon producers will be penalized with higher capital costs and lower multiples. In order to help you rank different operators, we have assembled a data-file covering 13Mboed of production from major US basins, operator-by-operator (below and here) alongside our broader screens of CO2 intensity, which span across 30 different sectors, such as LNG plants, refineries, chemical facilities, cement and biofuels (here).

(9) Mitigating methane? Biden’s presidency will likely re-strengthen the EPA. Our hope is that this will accelerate the industry’s assault on leaking methane, which is a 25-120x more powerful greenhouse gas than CO2. Methane accounts for 25-30% of all man-made warming, of which c25% derives from the oil and gas industry. If 3.5% of gas is leaked across the value chain, then debatably gas is no greener than coal (the number is less than 1% in the US but can be greatly improved). Our 23-page note evaluates the best emerging technology options to mitigate methane. We are excited by replacing high-bleed pneumatics, as profiled in our short follow-up note (also below). We also see shale operators accelerating their quest for ‘CO2-neutral’ production (note below).

(10) The weatherization of 2M homes is a central part of Joe Biden’s proposed energy policy. Hence we created a data-file assessing the costs and benefits of different options. The most cost-effective way to lower home heating bills is smart thermostats. They can cut energy use c18%. Leading providers include Nest (Google), Honeywell, Emerson, Ecobee. Second most cost-effective is sealing air leaks. GE Sealants is #1 by market share in silicone sealants. Advanced plastics would also see a modest boost in demand. More questionable are large and expensive construction projects, which appear to have larger up front costs and abatement costs per ton of CO2.

Energy transition: is it becoming a bubble?

Investment bubbles in history typically take 4-years to build and 2-years to burst, as asset prices rise c815% then collapse by 75%. In the aftermath, finances and reputations are both destroyed. There is now a frightening resemblance between energy transition technologies and prior investment bubbles. This 19-page note aims to pinpoint the risks and help you defray them.


Our rationale for comparing energy transition to prior investment bubbles is contextualized on page 2, based on discussions we have had with investors and companies in 2020.

Half-a-dozen historical bubbles are summarized on pages 3-4, in order to compare the energy transition with features of Dutch tulips, the South Sea and Mississippi Companies, British Railway Mania, Roaring Twenties, Dot Com bubble and sub-prime mortgages.

Five common features of all bubbles are considered in turn on pages 5-16. In each case, we explain how the feature contributed to past bubbles, and where there is evidence of the feature in different energy transition technologies.

Important findings are that many themes of the energy transition can achieve continued deflation or profitability, but not both; while a combination of increasing leverage and curtailment on renewables assets could leave many assets underwater.

Implications are drawn out on pages 17-19, including five recommendations for decision-makers to find opportunities and avoid the most dangerous aspects of bubbles surrounding the energy transition.

What oil price is best for energy transition?

It is possible to decarbonize all of global energy by 2050. But $30/bbl oil prices would stall this energy transition, killing the relative economics of electric vehicles, renewables, industrial efficiency, flaring reductions, CO2 sequestration and new energy R&D. This 15-page note looks line by line through our models of oil industry decarbonization. We find stable, $60/bbl oil is ‘best’ for the transition.


Our roadmap for the energy transition is outlined on pages 2-4, obviating 45Mbpd of long-term oil demand by 2050, looking across each component of the oil market.

Vehicle fuel economy stalls when oil prices are below $30/bbl, amplifying purchases of inefficient trucks and making EV purchases deeply uneconomical (pages 5-6).

Industrial efficiency stalls when oil prices are below $30/bbl, as oil outcompetes renewables and more efficient heating technologies (page 7).

Cleaning up oil and gas is harder at low oil prices, cutting funding for flaring reduction, methane mitigation, digitization initiatives and power from shore (pages 8-9).

New energy technologies are developed more slowly when fossil fuel prices are depressed, based on R&D budgets, patent filings and venturing data (pages 10-11).

CO2 sequestration is one of the largest challenges in our energy transition models. CO2-EOR is promising, but the economics do not work below $40/bbl oil prices (pages 12-14).

Our conclusion is that policymakers should exclude high-carbon barrels from the oil market to avoid persistent, depressed oil prices (as outlined on page 15).

Energy Transition: Polarized Perspectives?

Last year, we appeared on RealVision, advocating economic opportunities that can decarbonize the energy system. The “comments” and reactions to the video surprised us, suggesting the topic of energy transition is much more polarized than we had previously thought. It suggests that delivering an energy transition will need to be driven by economics, whereas polarized politics are historically dangerous.

realvision.com/tv/shows/the-expert-view/videos/decarbonization-the-divestment-death-cycle

The fist 50 comments from our RealVision interview are tabulated below. 17 were positive and enthusiastic (thank you for the kind words).

But a very surprising number, 16 of the comments, attacked the science of climate change. It is perhaps not a fully fair represenation, as those with extreme views are more likely to post comments in online forums. But 30% dissent is still surprisingly high. Read some of these comments, and it’s clear that fervent opinions are being expressed. Even moreso on our youtube link.

6 of the comments also challenged the politics behind energy transition, expressing concerns that some politicians are evoking fears over climate change in order to justify policies that are self-serving and only tangentially related to the issue.

These attacks are from an unusual direction. Living in New Haven, CT, we are more used to being criticised for seeing a continued, strong role for lower-carbon and carbon-offset fossil fuels in the decarbonised energy system (chart below).

Indeed, another sub-section of the comments argued that our views did not go far enough. 6 of the comments called for a greater emphasis on nuclear or hydrogen and continued vilification of traditional energy companies. Our economic analysis suggests economics will be challenging for hydrogen, while nuclear breakthroughs are not yet technically ready. But one commentator, for example, dismissed this analysis and said our views must be “ideologically driven”.

https://thundersaidenergy.com/downloads/hydrogen-opportunities-an-overview/
https://thundersaidenergy.com/downloads/next-generation-nuclear-the-cutting-edge/

Mutual animosity was also clear in the comments section of the RealVision video. One comment reads “you are completely delusional..sorry that you got fed the wrong info by these fraudsters in suits and their little girl puppet. You’ll wake up to reality one day.” Another reads “let our kids and future generations figure it out like we had to from our forefathers!”. At last year’s Harvard-Yale football game, the protesters met any such criticism from the crowd with a chant of “OK boomer”.

Deadlock? Others in the comments section tried debating the climate science. One statement was criticised as a “typical ‘we know better’ argument”. Another commenter opined that all peer-reviewed scientific literature is “fraudulent”. The most sensible comment in the mix noted “very little space left between ‘Greta Evangelists’ and equally fanatical ‘haters'”. This appears right. It is a polarized, poisonous, deadlocked debate.

Historical parallels? Over the christmas break, I enjoyed reading James McPherson’s ‘Battle Cry of Freedom’, which described the gradual polarization of ante-bellum America, in the 25-years running up to the US Civil War. One cannot help seeing terrifying similarities. Animosity begat animosity. Eventually the whole country was divided by an ideology: abolitionists in slave-free states versus the unrepentant slave economies.

Ideological divides are also deepening in the energy space. 40% of world GDP has now declared itself on a path to zero carbon. What animosities will emerge between these carbon-free states and the unrepentant carbon economies?

Economic opportunities in energy technologies remain the best way we can see to deliver an energy transition without stoking dangerous animoisities. They will remain the central theme in our research in 2020, and we are aiming to stay out of the politics(!). Our RealVision video is linked here.

Global gas: catch methane if you can?

Scaling up natural gas is among the largest decarbonisation opportunities on the planet. But this requires minimising methane leaks. Exciting new technologies are emerging. This 28-page note ranks producers, positions for new policies and advocates developing more LNG. To seize the opportunity, we also identify c25 early-stage companies and 10 public companies in methane mitigation. Global gas demand should treble by 2050 and will not be derailed by methane leaks.


Pages 2-4 explain why methane matters for climate and for the scale up of natural gas. If 3.5% of methane is leaked, then natural gas is, debatably, no greener than coal.

Pages 5-8 quantify methane emissions and leaks across the global gas industry, including a granular breakdown of the US supply-chain, based on asset-by-asset data.

Page 9-10 outlines the incumbent methods for mitigating methane, plus our screen of 34 companies which have filed 150 recent patents for improved technologies.

Pages 11-12 outline the opportunity for next-generation methane sensors, using LiDAR and laser spectroscopy, including trial results and exciting companies.

Pages 13-15 cover the best new developments in drones and robotics for detecting methane emissions at small scale, including three particularly exciting companies.

Pages 16-17 outline next generation satellite technologies, which will provide a step-change in pinpointing global methane leaks and repairing them more quickly.

Pages 18-24 covers the changes underway in the oilfield supply chain, to prevent fugitive methane emissions, highlighting interesting companies and innovations.

Page 25-26 screens methane emissions across the different Energy Majors, and resultant CO2-intensities for different gas plays.

Pages 27-28 advocate new LNG developments, particularly small-scale LNG, which may provide an effective, market-based framework to mitigate most methane.

Robot delivery: Unbelievable fuel economy…

Stand on a street corner in Tallinn, in the summer of 2019, and you might encounter the scene below: not one, but two autonomous delivery robots, comfortably passing one-another.

The fuel economy of these small electric machines is truly transformational, around 100x better than a typical motorcycle (the trusty workhorse of take-aways past), around 200x better than a typical car and around 400x better than a typical pick-up.

Large implications follow for energy supply and demand, if such delivery-robots take off…

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Our conclusion is to have found further evidence that transportation technology is evolving. Forward thinking energy companies will be preparing for the change, as evidenced by their patents, their projects and their venturing.

Lost in the Forest?

In 2019, Shell pledged $300M of new investment into forestry. TOTAL, BP and Eni are also pursuing similar schemes. But can they move the needle for CO2? In order to answer this question, we have tabulated our ‘top five’ facts about forestry. We think Oil Majors may drive the energy transition most effectively via developing better energy technologies in their portfolios.


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