When it comes to strength, Jarand Rystad is a numbers guy. The former McKinsey & Company partner founded Oslo-based Rystad Energy, an independent research and energy intelligence firm that sells data and analytics on oil, gas, coal and renewable energy sources.
A physicist by training, Rystad is optimistic about the possibility of containing climate change by introducing new technologies. He brings numbers to back up his views, based on extensive knowledge of the company.
Q: When will we see peak oil consumption, peak oil consumption?
A: I think coal is high soon. Either this year or next year. We are approaching peak temperatures in China, probably this year or next, which means coal and gas power generation. China is part of the coal market, so it is very important.
In Europe and the US coal has been in decline for many years. The trend down in Europe and America balances the upward trend in India and Indonesia and a few other countries and Pakistan, then the rise in China. So they are very close to high coal.
High oil, we have been in a very good place with EV adoption in Europe and America although it has stalled due to lack of funding. And then we have very high gas, as you know, consumption has gone down in Europe much faster than anyone believed. So taking these three fossil fuels – coal, oil and gas – together, I think we’re talking about maybe the end of this decade being the peak of fossil fuels, maybe even earlier.
Question: Is that good news?
A: I think it’s good news, of course. The only way to eliminate oil, gas and coal is to compete with the use of oil, gas and coal by introducing new technologies. So what you need to work on is solar, wind, batteries, geothermal, EVs, etc. All of these technologies will make the use of fossil fuels uncompetitive.
Question: Where are oil prices going?
A: OPEC controls the market because there is actually a lot of oil in the market. So OPEC cuts 3 million barrels, otherwise there will be an even bigger gap between basic supply and demand.
I see weak fundamentals which means I see weak prices and little risk of a fall in asset prices again. The price declines will not last long, but they are usually almost V-shaped and these can go deeper and can go higher again.
Q: You said there are 24 important technologies. What are the top five?
A: So let’s say it’s 38 gigatons of emissions that you need to reduce. Solar photovoltaic alone will reduce 11 gigatons. Batteries and EVs separately are next important, at 5.5 gigatons each. And CCUS (carbon capture, use and storage) also has the potential to reduce 5.5 gigatons. The fifth is wind, which is also like 5.5 gigatons.
Q: What is one technology that no one has heard of?
A: For example, high temperature energy storage. One is called “solar in a box,” this big block of graphite, or carbon black, and you can heat the block to 2,000 degrees, and you can do that when the wind is blowing and the sun is shining.
You can have solar panels inside that generate electricity from wavelength radiation from the block, and you have pipes in it with very hot hot water, so you can choose whether you want to release the energy as electricity or as pressurized hot water. , an example of steel production… Just one example of a new technology for long-term storage.
Question: I have not heard the word “hydrogen” in our discussion.
A: It’s not very efficient to move it from gas to hydrogen and back to gas. This will be a special application only, a niche more than a pillar of applications such as steel, chemicals, transportation fuels, ammonia production. I don’t believe we will go with hydrogen cars because it is not competitive with electricity.
Q: Energy transition is sometimes seen as a matter of deterrence and introducing things that will be more expensive. Can you speak to that?
ANSWER: If you look at those technologies that are really taking off like solar and batteries, they are taking off because they are cheaper and better than heat. So they are already past the finish line… The cheapest option would be solar. Even if you install batteries to cover the intervals, there will be competition against building new thermal plants.
Q: What can be expected at the United Nations climate conference in Azerbaijan next month?
A: Some countries like Germany for example are slowing down the pace of promoting the use of electric vehicles. They need to keep these kinds of measures. And you need this kind of international pressure. The difference between effective policies and weak policies is at least 0.4 degree of global warming. We have many technologies that will drive green change without policies. But with policies, you drive it faster.
Q: Are you an optimist or pessimist about holding global warming to 1.5 degrees Celsius by the end of the century?
A: Some people call me a climate optimist but I’m grounded in reality on this one. It is possible, for CO2 alone, to limit gas emissions to 650 gigatons, corresponding to a warming of 1.6 degrees, and if you do something with methane on top of that, 1.5 degrees can still be reached.
The iPhone disrupted the media, and solar and batteries will be disruptive technologies, because they are cheaper and better. People underestimate how fast it will go. In 1945 they were all steam trains and in 1960 they were all electric, only 15 years to change the big system, because the new technology was cheaper and better.
-David McHugh, Associated Press business writer
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