If the green revolution fails now, there will be riots and wars long before the world faces the catastrophe from global warming.

The world is going to run out of cheap oil. It is a finite commodity that takes millions of years to form, and we have been squeezing it out of the ground in ever increasing quantities for more than a century. At some stage, the tap runs dry. Nobody knows quite when, and it will not be for a long time. But long before the world runs out of the black stuff, it is going to run out of the cheap black stuff, and soon.

We have been guzzling cheap oil for decades. Before taxes, you can buy a litre of diesel or petrol cheaper than a litre of bottled water. Thanks to a competitive and efficient oil industry, the world economy has been running on a stable supply of very good value hydrocarbons that powers our cars, flies our planes, heats our homes, lubricates our machines, and creates numerous plastics that can be found in a multitude of goods. Despite OPEC – the cartel of oil producing nations that is responsible for a fair chunk of the world’s supply – the price of a barrel of crude has been largely bobbling around north of $60 and below $90 for the last twenty years.

The oil price is determined  by the marginal barrel, or the point when the demand curve meets the supply curve. Crude oil can be produced from as little as $10 a barrel in some parts of the Middle East. After that, the cost of production rises and rises. There are parts of the world where it would cost more than $150 a barrel to produce a barrel of crude. But until the demand curve rises high enough, the $150 a barrel crude stays in the ground.

With the exception of the 2008 financial crisis and the Covid years, global oil demand has been steadily rising year after year. If it is left unchecked, the demand curve will start to accelerate simply because the global population is exploding. There was just under 6.4 billion people on the planet in 2003 when the world was using around 80 million barrels of crude oil a day. The population has risen to just over 8 billion in 2023 and world oil demand has surpassed 100 million barrels a day. By 2050, the population is projected to reach 9.7 billion, and that would mean global oil demand would top 120 million barrels a day. This was the doomsday clock that the world was facing before the green revolution took hold. Oil may not have run out in the next twenty to thirty years, but the runaway global oil demand curve was going to threaten the abundance of very cheap oil that fuels both developed and developing nations alike.

Frankly, the world could not cope with a persistent oil price of $150 a barrel, and periods when the price spikes to $200 if not $300. That is a price that unleashes riots and wars and causes immeasurable suffering and death. Just take a localized example like Lebanon in 2021. Protests erupted in the troubled country after the energy ministry said it would hike prices at the pump by 35 percent to ease the burden of a plunging national currency on its foreign exchange reserves. The army was deployed as people blocked roads and burning tires and garbage bins in Beirut. A runaway global oil price would trigger turmoil around the world.

The good news is the green revolution, the headlong rush into renewable energy like wind and solar power, breaks the rise of global oil demand and then reverses it. The even better news is the world can emerge a fairer and better place once it takes hold.

Unlike oil, every nation will be able to become self-sufficient in energy. Billions of poverty stricken people have never benefitted from the fossil fuel guzzling that the wealthiest on the planet take for granted. Some 2.4 billion people still cook using open fires or inefficient stoves fueled by kerosene or solid fuels, such as wood, crop waste, charcoal, coal and dung. Household air pollution was responsible for an estimated 3.2 million deaths in 2020, including over 237,000 children under the age of five, according to the World Health Organisation. Technology that is available today, such as electric cookstoves powered by renewable energy, can eliminate this pollution, much as the same way as piping in clean water at the end of the 19^th century tackled cholera and typhoid in the UK. If people no long have to use charcoal for cooking, they will stop chopping down so much of the rainforests, saving those habitats.

On a macro-economic scale, all countries will be able to produce their own energy and fuels in the future, levelling up the economic playing field. Morocco, which is not a rich country, expects renewables will make up half of its energy mix by 2030, split 20 percent solar, 20 percent wind and 12 percent hydro. By the end of this decade, the north African country will be exporting this clean energy to the UK.

The pathway is uncertain and probably far from smooth. Oil and gas markets need vast sums of investment every year to keep running, and there is a growing investment gap. The industry is prone to investment cycles switching between feast and famine, often in response to high and low prices. The green revolution ruins the cycle because high oil and gas prices will just cause more demand for renewable energy and electric cars. OPEC estimates required oil-related investments by 2045 will come to around $12.6 trillion, with capital expenditure in upstream oil and gas production taking the lion’s share of around $9.9 trillion, largely in areas such as North America and the North Sea. But the money wont be pouring in unless there is a long-term return. There could be an orderly draw down of the oil industry if the green revolution is fast enough to ensure world oil demand starts to decline at a fair clip. Oil prices could slide if there is excess supply. But if the green revolution is slow, but still coming, oil price spikes could become much more frequent because investors will fear owning stranded assets.

Momentum has decidely moved away from fossil fuels. China has quite suddenly become the world leader in wind power generation and for good reasons, and one of those is climate and the other is oil. In 2021, China was responsible for almost 70% of new wind installed capacity. In November 2022, China built the world’s largest wind turbine to date, with a propeller diameter of 252 metres. Meanwhile, the world’s biggest economy, the US, passed the Inflation Reduction Act in 2022 that is just a huge funnel of green subsidies, particularly for electric cars.

But, the green revolution is still only evolving, and far too dependant on lithium. The advent of electric vehicles is not the long term solution. The world needs two billion electric vehicles by 2050 to meet climate targets, according to the International Energy Agency, and that means a lot of lithium needs to be mined to power batteries, unless an alternative is found. The climate targets could be missed, but effectively the green revolution will cause a downturn of investment in fossil fuel cars anyway. The world’s lithium reserves are theoretically sufficient to meet the expected rise in demand, but the easy to mine deposits are scattered around in a few places in the world, and often in drought-prone areas. Lithium extraction requires a lot of water. Chile has the world’s biggest lithium reserves, according to the US Geological Survey, and is part of the so-called Lithium triangle along with Argentina and Bolivia. Just under 60% of the planet’s lithium reserves are found in these three countries. Other large deposits are found in Australia and China. The rush to electric battery cars may simply replace the squeeze on cheap oil with a squeeze on lithium.

There is a solution on the horizon and it can be found and produced everywhere – green hydrogen. It is green because it is produced from renewable energy, rather than as a byproduct of the oil refining process. Hydrogen is used in great quantities by the oil industry to lower the sulfur content of oil products, such as diesel and petrol. It is going to take huge leaps and bounds to create a green hydrogen market to replace oil, but it is the best bet currently available. Green hydrogen is a very versatile energy carrier that can be used to create a range of ‘e’ fuels, such as e-methanol and e-ammonia. The airline industry has started to use tiny quantities of synthetic aviation fuel as an alternative to jet fuel. Currently, most of the synthetic aviation fuel is derived from vegetable fat, but the market is slowly developing an ‘e’ version for the long term, and the EU has mandated airlines within its borders fly using a small proportion of the ‘e’ stuff in the future.

As for the climate deniers, who think the green revolution is too costly and based on whacky science, they could be right. The climate scientists may have got the sums all wrong, and over estimated the impact of pumping masses of so-called greenhouse gases into the atmosphere and oceans, taking the concentration levels back to the Pliocene period some 3 million years ago when there were no ice-caps. But the scientists could also be right, and frankly, it is not worth the gamble to find out if they are wrong. Meanwhile, the climate deniers should worry about the price of oil if they are not worried about greenhouse gases.