Why Bet on Big Oil When Fossil Fuels Are Clearly Not the Future?

“The clean energy transition is projected to be a strategic necessity for long-term economic stability, characterized by high initial investment and systemic risks in the near term (to 2035), followed by structural benefits and industry contraction by mid-century (2050), culminating in significant net economic gains by the end of the century (2100).”

This is a quote from a Gemini Deep Research analysis I’d run recently. The prompt:

Analyze both negative and positive economic consequences of a transition to clean energy by 2035, 2050, and 2100, respectively, breaking out consequences for the general economy and the economic effects on the fossil fuel industry and shareholders and investors. How fast may this clean energy transition happen without creating economic hardship on the general economy?

Notice that I didn’t insist that Gemini look at the good aspects of the clean energy transition as much as on what happens to the traditional and dirty energy system that’s been in place for a couple of hundred years. Nonetheless, facts are that the best plan is the clean energy transition.

That’s not the plan of Big Oil, though.

No, the plan by Big Oil is to push and scrape and pull the levers of corrupted governance as fiercely as possible for as long as possible, claiming that a flotilla of hundreds of new gas turbines is needed and Big Oil points to AI as the reason why.

And when the clean energy transition eats fossil fuel’s lunch? You can be your bottom dollar that Big Oil—alongside the too-often allies the power utilities—will argue, of course, we all need to keep using fossil fuel power generation because—Whaaa!—nobody wants stranded assets, do they? What about all those institutional investors that kept pension funds in fossil fuels, or—horror!—those poor stockholders and C-Suites full of good and decent people? You’ll have to bail them out, right?

Unfortunately, this is exactly the sort of argument we can expect if there’s not clear legislation outlining the course and timeline for the clean energy buildout. Unfortunately, bailing out the poor little rich men seems a near-inviolate tradition in America. Remember TARP in 2009, when the big financial institutions that caused the worldwide economic collapse because of their obviously crap securitizations got bailed and not jailed?

The United States needs large scale plans and authority to shift the current energy infrastructure to one based on clean energy and a full-on buildout of a digitally intelligent and flexible grid capable of load balancing, distributed energy resource management, instantaneous demand response, and incorporation of virtual power plants.

Sure, here in the land of Trump, a.k.a., President Big Oil Stooge, this seems impossible. But Trump’s days are numbered and the opposition needs clear and new alternatives for America as it reemerges from the current nightmare.

We’ve done large-scale before and we can do it again. Only smart and ambitious Federal policy and agency can bring about the shift to clean energy and capable and smart grids in the timely fashion needed, while road mapping by law to make clear where the country is going. That way, we can avoid all the brand new but doomed stranded assets being pushed by the fossil fuel interests and apply laws of fiduciary responsibilities to tell these S.O.Bs., “Sorry, do not collect $200 and go directly to jail.”

Here are a few examples of Federal energy-related agencies we’ve benefited from in the past:

• Federal Power Commission (FPC) (1920-1977): Established to coordinate federal hydropower, later became independent, regulating interstate electricity and natural gas.
• Atomic Energy Commission (AEC) (1946-1974): Managed nuclear development; abolished to separate research/development from regulation, leading to DOE/NRC.
• Energy Research and Development Administration (ERDA) (1975-1977): Briefly housed energy R&D from the AEC before becoming part of the Department of Energy (DOE).
• Rural Electrification Administration (REA) (1935-1994): A New Deal agency that funded rural power lines, dramatically expanding access.
• The Tennessee Valley Authority (TVA) (1933): Federally-owned U.S. corporation that provides electricity, manages flood control, and promotes economic development across the Tennessee Valley region (mostly Tennessee, parts of AL, MS, KY, GA, NC, VA).

This all reminds me of Public Utility Holding Company Act (PUHCA) of 1935, a landmark U.S. federal law passed during the Great Depression to regulate massive, often corrupt, interstate utility holding companies, forcing them to register with the SEC, simplify structures (often limiting them to a single state), and keep regulated utility business separate from other ventures, ultimately breaking up huge monopolies and protecting consumers from price gouging, though parts were later repealed by the Energy Policy Act of 2005.

If you want more gray hair, follow the PUHCA link to Wikipedia and see how we’ve been where we are today fighting special interests, and that there are solutions to moderate greed and self-serving. I know, radical, right?

Summary of Economic Trajectories of the Clean Energy Transition: A Multi-Temporal Analysis of Consequences to 2100 AI Report

Here’s the summary of Economic Trajectories of the Clean Energy Transition: A Multi-Temporal Analysis of Consequences to 2100. If you what the detailed analysis, follow this link. I’ve kept all the references and sources used by Gemini in its report generation. One of the more interesting conclusions is that the U.S. needs to resolve supply chain problems with critical clean tech minerals. There’s already a lot of work underway, including this bit of news from today, “A huge cache of critical minerals found in Utah may be the largest in the US.”

Optimal Transition Pace: Fastest and Most Orderly

The analysis concludes that the optimal speed for the clean energy transition—the speed that minimizes overall economic hardship on the general economy—is the fastest possible orderly transition, aligning with the IEA’s rapid shift benchmark of 2035.

The greatest risk of economic hardship is a disorderly or delayed transition, where postponed climate action triggers a sudden, destabilizing repricing of assets, potentially causing a global financial crisis on the scale of 2008.² Minimizing hardship requires proactive policies like robust Just Transition programs and supply chain security to manage social and market friction.²

Economic Consequences by Timeline

1. The 2035 Horizon: Investment Surge and Financial Shock

Sector	Positive Economic Consequences	Negative Economic Consequences
General Economy	Massive investment in infrastructure drives job growth (energy sector employment grows at 2.2%, nearly double the global average of 1.3%).	Clean technology deployment is constrained by the supply of critical minerals (e.g., lithium, cobalt). Accelerated demand outpaces supply, increasing price volatility and threatening to impede the pace of the transition. The global market for key clean technologies is projected to nearly triple to more than $2 trillion by 2035.
	The switch away from fossil fuels generates immediate societal benefits (avoided externalities). For example, a 100% clean electricity grid in the US could yield a net benefit of $920 billion to $1.2 trillion by 2035, primarily from avoiding up to 130,000 premature deaths and associated mortality costs ($390–$400 billion).
Fossil Fuel Industry & Investors	Necessity of capital reallocation creates opportunities in low-emission fuels. Annual investment in oil, gas, and coal must fall below $450 billion by 2030 (a drop of over 50%), while spending on low-emissions fuels (hydrogen, CCUS) must increase tenfold to about $200 billion.	The industry faces the “stranded asset cliff”: $11 trillion to $14 trillion in fossil fuel assets (reserves, infrastructure) are projected to become worthless by 2036. Upstream oil and gas investors alone risk over $1 trillion in lost future profits.

 

2. The 2050 Horizon: Structural Costs and Systemic Stability

Sector	Positive Economic Consequences	Negative Economic Consequences
General Economy	Energy cost stabilization. Reduced reliance on volatile fossil fuels substantially lowers systemic risk. Overall energy costs for advanced economies are projected to fall from approximately 10% of GDP today to 5%–6% by 2050.	Achieving the stringent 1.5°C pathway incurs measurable structural macroeconomic costs, resulting in a loss of 2.6% to 4.2% of global GDP relative to baseline scenarios.
	Resilience against energy shocks improves significantly: an energy price shock equivalent to the 2022 crisis (which cost 1.8% of GDP) would impact the economy by only 0.3% of GDP in a net-zero system.	The marginal cost of carbon abatement for the 1.5°C pathway rises exponentially, reaching approximately $630 per ton of CO2 by 2050.
Fossil Fuel Industry & Investors	Long-term shareholder value is found in leveraging existing expertise (large-scale project execution) for new technologies. Areas like Carbon Capture, Utilization, and Storage (CCUS) have advanced planning stages representing over $27 billion in estimated investment.	Structural contraction is inevitable: oil and gas use would fall by 75% from current levels. Revenues for surviving low-cost producers are projected to shrink by 75% from 2030 onwards.

3. The 2100 Horizon: Net Benefits and Resilience

Sector	Economic Consequences
General Economy	The long-term economic outlook confirms the financial prudence of mitigation: the aggregated global economic benefits from avoided climate change impacts are projected to substantially outweigh the global mitigation costs over the entire 21st century.
	A resilient energy economy is fully established, characterized by minimal dependence on geopolitical fossil fuel sources. Technological advancements like recycling are expected to reduce primary supply requirements for key minerals by approximately 10% by 2040, further improving supply security.
Fossil Fuel Industry & Investors	The industry, in its current form, largely ceases to exist. Residual operations are highly specialized, focusing on providing essential environmental services such as managing large-scale Carbon Dioxide Removal (CDR) and permanent geological storage infrastructure.

Mitigating Economic Hardship

The transition’s speed is constrained by policy and social stability, not just technology. To manage economic hardship (e.g., localized unemployment, cost inflation) and ensure the fastest orderly pace, two key interventions are required:

1. Fully Implementing Just Transition Policies: Proactive social support is necessary to manage labor displacement and regional friction. The cost of comprehensive worker and community support, such as guaranteeing pensions, income support, and retraining, is relatively small compared to total infrastructure spending; for example, a high-end estimate for a US program is around $600 million per year.
2. Securing Critical Mineral Supply Chains: Policies must focus on diversification, recycling, and market stabilization (e.g., strategic stockpiling) to prevent supply disruptions and cost escalation of clean technologies.⁵