Elon Musk, the richest man in the world and founder of Tesla Inc. (NASDAQ: TSLA ), has recognized that the world still needs oil and gas amid the ongoing global energy transition.
“Realistically, I think we have to use oil and gas in the short term, because if we don’t, civilization will collapse. One of the biggest challenges the world has ever faced is the transition to sustainable energy and towards a sustainable economy,” he said. “This will take a few decades to complete,” Musk told reporters at a conference in Norway on Monday.
Asked whether Norway should continue drilling for oil and gas, Musk said: “I think some additional exploration is warranted at this point.” Musk said that offshore wind power generation in the North Sea, combined with stationary battery packs, “… . could provide a strong and sustainable power source in the winter.”
Tesla is one of the most prominent manufacturers of electric vehicles on the planet, and electric vehicles are playing an important role in mitigating climate change.
Last year, electric vehicles moved 1.5 million barrels of oil per day, according to a BloombergNEF analysis. This might not sound like much in the context of global oil production of 100 million barrels. However, this number is expected to increase exponentially, with electric vehicles on the road expected to nearly quadruple over the next four years to nearly 80 million from the current 20 million. In fact, BNEF has predicted that electric and fuel cell vehicles will displace 21 million barrels per day of oil demand by 2050.
But, as Musk has pointed out, the global appetite for oil is not going to run out anytime soon, quite the opposite.
According to the latest report from the International Energy Agency (IEA), the increased use of oil for power generation and the shift from gas to oil are increasing demand. Global oil demand is now forecast at 99.7 mb/d in 2022 and 101.8 mb/d in 2023. IEA says global oil supply peaked post-pandemic at 100.5 mb /d in July as maintenance was reduced in the North Sea, Canada and Kazakhstan. OPEC+ increased total oil production by 530 kb/d in line with higher targets and non-OPEC+ increased by 870 kb/d. Global oil supply will increase by another 1 mb/d by the end of the year. By Alex Kimani for Oilprice.com
More top reads from Oilprice.com: