John Kerry Claims Energy Transition Is Unstoppable but Reality Says Otherwise
March 18, 2025
ByIrina Slav– Mar 18, 2025, 2:30 PM CDT
- John Kerry and energy transition advocates insist the shift away from fossil fuels is inevitable.
- Investor enthusiasm for renewables is fading, with financial backers pulling out.
- Activists are pushing for more government support to keep wind, solar, and EV sectors afloat.
The oil industry and everyone else who has reservations about the chances of success of the energy transition is on the wrong side of history. The claim came last week from John Kerry, tireless transition advocate and opponent of the oil and gas industry. Unfortunately, evidence suggests his claim is anything but accurate.
“There is more chance of Elvis speaking next than the current plan working! And a wave of public dissatisfaction with transition reality is crashing over countries, companies, and consumers alike,” Aramco’s chief executive Amin Nasser said at this year’s CERAWeek. Unfortunately for Kerry and other transition advocates—and unlike them—Nasser is right.
‘;
document.write(write_html);
}
None other than the International Energy Agency last year estimated that investments in alternative sources of energy were on track to hit $2 trillion in 2024. That was twice the amount invested in oil, gas, and coal, the IEA said with not a little pride. “Clean energy investment is setting new records even in challenging economic conditions, highlighting the momentum behind the new global energy economy. For every dollar going to fossil fuels today, almost two dollars are invested in clean energy,” the IEA’s head, Fatih Birol, said—only to call for more investments in oil and gas this month at CERAWeek.
Related: Natural Gas, Not Oil, May Be the Real Winner of Trump’s EPA Overhaul
Indeed, a lot has been invested in things like wind, solar, and battery storage, but there are two important details. First, the energy capacity this investment has enabled has gone to cover additional energy demand and not to replace oil, gas, and coal. Indeed, coal remains a top energy source globally, notably in China, which is the undisputed leader in transition investments. The second detail is China versus the other top transition performers.
China has invested heavily in wind, solar, batteries, and the electrification of transport, but it has not stopped investing in oil, gas, and coal, especially in domestic production. China has adopted an “all of the above” approach to energy. Europe, on the other hand, has opted for the replacement model and has ended up with exorbitant electricity bills, less reliable supply, and the prospect of even more exorbitant bills because it is doubling down on that replacement model that inspired Aramco’s Nasser to mention Elvis and the likelihood of him speaking as a metaphor of the chances of the energy transition to succeed.
“If the head of a major fossil fuel company wants to pretend it isn’t going to happen, have at it. But they’re on the wrong side of history. And history is not just waiting to prove it. [It’s] proving it right now. This transition is happening,” John Kerry said in an indirect response to Nasser last week, as quoted by the Financial Times, echoing the opinion expressed by two other transition advocates who earlier in the month wrote in the Wall Street Journal that the transition was “unstoppable” because it was “being driven by fundamental technological and economic forces that are too strong to stop.”
Energy markets are indeed driven by fundamental technological and economic forces, the latter being the most fundamental of all: supply and demand. The laws of supply and demand, however, have not favored the transition. In fact, these laws have shown the transition to be unsustainable without considerable and continuous government support, as evidenced by the repeated calls of the wind and solar industry for more subsidies as the age of low interest rates appears to be over for now. As for technological forces, they worked in China—over decades of research and development and more subsidies—but they cannot work the same way in half the time as Europe wants them to do.
The result of this divide between desires and reality is that investors—the key enablers of the transition besides generous governments—are leaving the space. One of them actually declared the transition dead, “for now”. “The whole sector — solar, wind, hydrogen, fuel cells — anything clean is dead for now,” Nishant Gupta, the founder of the UK-based fund, Kanou Capital, told Bloomberg earlier this month, hours after one of the largest solar energy players in the U.S. warned it had doubts about its state as a going concern.
It is not the only one in trouble—far from it. Europe’s EV battery darling, which soaked as much as $15 billion in funding from governments and private investors, declared bankruptcy this month. A slew of EV hopefuls went under in rather quick succession. The reason wind and solar developers are asking for more subsidies is that there is a lot of wind and solar now, which has, in accordance with the laws of market economy, made their output rather cheap. That’s when this output is being generated, it is worth noting, because one of the most notable features of wind and solar that distinguishes them from oil, gas, and coal is that they do not generate on demand.
This is why enthusiasm for the transition is evaporating and investors are falling back on what has proven to work, time and again: oil, gas, and coal. This is why a transition advocate such as the IEA’s Birol is calling for more oil and gas investments. And this is why “there is more chance of Elvis speaking next than the current plan working.”
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com
Search
RECENT PRESS RELEASES
Related Post
