Energy Transition: What History Tells Us About Timing

The Inconvenient Truth About Speed#

In 1859, Edwin Drake drilled the first commercial oil well in Titusville, Pennsylvania. Over the following decades, oil transformed from a curiosity into a global commodity. By 1920, it had become the dominant fuel for transportation. By 1960, it had surpassed coal as the world's primary energy source overall.

That transition—from first discovery to dominance—took a full century.

Today, we're told a similar transformation will happen in a fraction of the time. Politicians promise net-zero emissions by 2050. Activists demand the end of fossil fuels within a decade. Headlines celebrate each new solar farm or electric vehicle as proof that the transition is accelerating beyond all expectations.

History suggests otherwise. Energy transitions are measured in decades, not years. The physical infrastructure, the capital stock, the skills and supply chains that define an energy system don't transform overnight. Understanding this isn't an argument against climate action—it's a prerequisite for realistic planning. And it's essential context for anyone trying to understand oil's future.

The Pace of Past Transitions#

The shift from wood to coal took roughly 150 years. In 1800, wood still provided most of the energy for heating, cooking, and early industrial processes. Coal's advantages—higher energy density, easier transport in bulk, compatibility with steam engines—drove gradual adoption, but "gradual" meant generations. Coal didn't reach 50% of global primary energy until approximately 1900.

The transition from coal to oil and natural gas followed a similar pattern. Commercial oil production began in the 1850s and 1860s, but coal remained dominant through both World Wars. Oil surpassed coal in transportation relatively quickly—the internal combustion engine was simply better than steam for mobile applications—but the broader energy mix shifted slowly. Coal provided more primary energy than oil until roughly 1960, a full century after Drake's well.

Natural gas followed oil, its adoption constrained not by the fuel's merits but by infrastructure requirements. Moving gas by pipeline requires enormous upfront investment; without pipelines, the fuel is stranded. The build-out of gas transmission networks that enabled today's consumption patterns took decades and trillions of dollars.

Each of these transitions had something in common: they moved from lower-quality energy sources to higher-quality ones. Wood to coal offered more energy per ton. Coal to oil offered more energy per pound and easier transport. Oil to gas offered cleaner combustion and greater versatility. Each new energy source was unambiguously better for most applications, and adoption still took generations.

Why Transitions Move Slowly#

The physics of energy systems creates inherent inertia. Energy infrastructure is expensive, long-lived, and deeply embedded in everything else.

Consider the capital stock. The world's vehicle fleet includes roughly 1.4 billion cars and trucks. Even if every new vehicle sold today were electric, replacing the existing fleet would take 15-20 years—the average lifespan of a vehicle. For heavy trucks, ships, and aircraft, lifespans extend to 20-30 years. Power plants last 30-50 years. Refineries and petrochemical facilities can operate for 40-60 years. The infrastructure decisions made today will shape energy consumption for decades.

Supply chains compound the challenge. An automobile requires thousands of components from hundreds of suppliers. A power plant requires specialized equipment, trained operators, and integration with transmission systems. Changing the energy system means not just building new things but rebuilding entire industries—the mining operations that produce raw materials, the factories that manufacture equipment, the training programs that produce skilled workers.

Skills and knowledge take time to develop. The oil and gas industry employs millions of people with specialized expertise in geology, drilling, refining, and distribution. A renewable energy economy requires different skills—electrical engineering, battery chemistry, power electronics. Some skills transfer; many don't. Workforce transitions that look smooth in economic models involve real people whose careers and communities face disruption.

Perhaps most importantly, energy infrastructure exhibits network effects and path dependencies. An internal combustion engine is only useful if gas stations exist. A gas station is only profitable if enough cars need fuel. This chicken-and-egg dynamic creates powerful lock-in: once a technology achieves dominance, switching away from it requires coordinating the simultaneous transformation of complementary systems.

How Today's Transition Is Different#

Arguments for rapid transition point to genuinely novel factors.

Climate change creates policy pressure that didn't exist in previous transitions. Governments are mandating emission reductions, banning internal combustion vehicles by specified dates, and subsidizing alternatives. The direction of policy, if not the pace, is clear in ways that favor low-carbon energy.

Renewable energy costs have fallen faster than almost anyone predicted. Solar electricity is now cheaper than coal or gas in many locations. Wind power has followed a similar trajectory. Battery costs, while still higher than advocates would like, have declined by 90% over the past decade. The economic case for renewables no longer depends on subsidies in favorable geographies.

Electric vehicles are approaching cost parity with conventional cars, and the driving experience—instant torque, quiet operation, low maintenance—appeals to many consumers. EV adoption has followed an S-curve pattern familiar from other technology transitions, with exponential growth that appears to be accelerating.

Financial markets are reallocating capital. Major investors, from pension funds to sovereign wealth funds, are reducing exposure to fossil fuels and increasing commitments to clean energy. The cost of capital for new oil and gas projects has risen relative to renewables, shifting investment patterns.

These factors are real and significant. But they also have limits that transition enthusiasts often understate.

The Hard Parts Remain Hard#

Some aspects of energy transition can happen quickly. Others cannot.

New car sales can shift to electric vehicles within a decade—and in some markets, are already doing so. Norway, with its generous subsidies and hydroelectric power, saw EVs reach 80% of new car sales by 2023. Other wealthy countries are following at varying speeds. This is the fast part of the transition.

But replacing the existing vehicle fleet takes much longer. Most of the cars on the road today will still be driving in 2035, burning gasoline regardless of what happens to new sales. The global fleet turns over slowly, and developing countries—where most vehicle growth will occur—are even slower to adopt expensive new technology.

Electricity generation can add renewable capacity rapidly, but replacing existing fossil generation is harder. Closing a coal plant that still has decades of useful life destroys billions in value. Utilities that took on debt to build fossil infrastructure can't simply walk away. And even where economics favor renewables, grid integration challenges—storing power for when the sun doesn't shine and wind doesn't blow—require infrastructure that doesn't yet exist at scale.

Heavy industry presents the hardest challenges of all. Making steel requires temperatures that are difficult to achieve without burning coal or gas. Making cement releases CO2 not just from fuel combustion but from the chemical reaction that produces clinite. Making plastics and chemicals requires hydrocarbon feedstocks. For these industries, electrification isn't an option—the chemistry doesn't work. Carbon capture or hydrogen might offer solutions, but these technologies remain early-stage and expensive.

Aviation and shipping have no practical alternatives to liquid fuels for most applications. Battery energy density is improving but remains far below what jet fuel provides. Sustainable aviation fuels exist but cost several times as much as petroleum-based jet fuel and depend on feedstocks that can't scale to meet global demand. Ships can burn LNG instead of bunker fuel for emission reductions, but LNG is still a fossil fuel. The maritime and aviation sectors will likely be among the last to decarbonize—if they ever do fully.

Realistic Expectations#

What can happen fast? New vehicle sales shifting toward EVs. New electricity generation being predominantly renewable. Rapid efficiency improvements in buildings and appliances. Methane emission reductions from oil and gas operations. These are the quick wins—changes that align with economic incentives and face relatively few structural barriers.

What takes longer? Full fleet turnover for vehicles, trucks, ships, and aircraft. Replacing existing fossil fuel generation, especially where capital is still being amortized. Building out grid infrastructure—transmission lines, storage facilities—to support a renewable-dominated system. Extending clean energy access to developing countries that need more power, not less.

What requires breakthrough? Long-haul aviation without petroleum-based fuel. Cement and steel production without process emissions. Seasonal storage of renewable energy at continental scale. Direct air capture of CO2 at prices that make it practical. These aren't impossible, but they depend on technologies that don't yet exist in commercial form.

The honest assessment is that the transition will take decades, even with aggressive policy support. Oil consumption has continued growing globally despite all the talk of peak demand. Natural gas consumption is growing faster than renewables in absolute terms. Coal, though declining in developed countries, is expanding in Asia. The trajectory is changing, but slowly.

What This Means for Oil#

The transition timeline has profound implications for oil markets and oil-producing regions.

Oil isn't going away soon. Even the most aggressive decarbonization scenarios from the IEA show significant oil consumption through 2050 and beyond. Petrochemical demand—for plastics, chemicals, and materials—continues growing even as fuel demand eventually plateaus. Aviation and shipping will depend on liquid fuels for decades. The question isn't whether oil will be needed but how much and for how long.

Managing decline is different from managing growth. An industry that knows its best days are behind it invests differently than one that expects expansion. Capital discipline replaces growth-at-any-cost. Mature assets get squeezed for maximum value. Innovation focuses on cost reduction rather than frontier expansion. This is already happening in the oil industry, with implications for supply that few analysts have fully appreciated.

Transition timing affects who wins and who loses. Producers with low costs and low emissions—like Canada's oil sands with carbon capture—can remain competitive longer than high-cost, high-emission alternatives. Countries that manage decline thoughtfully, protecting workers and communities while extracting value from remaining resources, will fare better than those caught unprepared.

The danger is getting transition timing wrong in either direction. Underestimating transition speed means overinvesting in stranded assets—pipelines that won't be needed, refineries that won't have customers. Overestimating transition speed means underinvesting in supply, triggering price spikes that hurt consumers and undermine political support for climate policy.

Planning for Reality#

The path forward requires holding two ideas simultaneously: the transition is inevitable, and it will take time.

Climate goals demand aggressive action. The physics of global warming doesn't care about infrastructure lifespans or workforce disruption. Failing to reduce emissions will have consequences far worse than the costs of transition. The direction of policy should be unambiguous: toward a low-carbon energy system as quickly as practical.

But practical matters. Shutting down fossil fuel production before alternatives exist at scale creates energy crises that hurt people and undermine public support. Blocking infrastructure that improves access to existing resources while preaching about transitions is incoherent. Pretending that oil can be eliminated in a decade when every serious analysis shows otherwise isn't idealism—it's fantasy that makes planning harder.

For Canada, the implications are clear. The country's oil resources will be needed for decades. Developing them efficiently, reducing their emissions intensity, building infrastructure to reach global markets—these aren't alternatives to transition but complements to it. A responsible transition means producing cleaner oil for the time it's needed, investing transition revenues in the industries and skills that come next, and protecting the workers and communities that built the current system.

Energy transitions are marathons, not sprints. Understanding that doesn't mean giving up on climate action. It means pursuing climate action that acknowledges reality—and builds a path forward that people can actually follow.

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Key Takeaways#

Energy transitions historically take 50-100 years, driven by the long lifespans of capital stock, the complexity of supply chains, and network effects that create lock-in. Today's transition faces genuine accelerants—policy pressure, falling renewable costs, EV adoption—but also persistent barriers in heavy industry, aviation, shipping, and developing world energy access. Fleet turnover alone ensures that fossil fuel consumption continues for decades regardless of new vehicle sales. Oil will be needed through 2050 and beyond even in aggressive decarbonization scenarios, particularly for petrochemicals, aviation, and shipping. Managing decline responsibly requires continued investment in cleaner production, infrastructure to access markets, and planning for workforce and community transitions. Realistic planning—acknowledging both the urgency of climate action and the pace at which energy systems can actually change—is essential for effective policy.