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Why Coal, Oil, and Gas will be irrelevant by 2050

Coal, oil, and gas powered the energy of Western civilization from the early 1900s to the current day and powered the industrial revolutions in countries from Great Britain to China. Fossil fuels are arguably the greatest source of wealth to the economy of the world in all of history. Without them, life as we know it would be completely different and things we see as essential things to life: iPhones, microwaves, ovens, washing machines, cars, airplanes, would all not exist.

But now with the effects of climate change becoming ever-present, nations are questioning their reliance on them. Based on current usage statistics, coal, oil, and gas will all be a major fuel source leading into the 22nd century. My conclusion, however, is that coal, oil, and gas will all become irrelevant by the year 2050 because capital intensity in coal, oil, and gas is a growing threat to their dominance.

Leaders in the fossil fuel industry include such companies as ExxonMobil, Chevron, BP, and Royal Dutch Shell. These companies have all seen their stocks fall by a quite significant margin in the past year. This led beloved Jim Cramer to say that he's quitting fossil fuel stocks.

Jim Cramer claims that fossil fuels stocks are companies that are very well run and profitable companies, but they simply have a hard time selling their shares. This is led by millennial investors and eco-conscious investing, individuals that often exclude fossil fuel stocks for their negative impact on the environment. This has been precipitated by the rise of the recognition of climate change by key scientists, economists, and now, politicians.

Fossil fuel companies will be pressured by new regulatory and public environments as more people are buying electric cars that run on cleaner electricity and as governments aim to force utilities to reduce emissions.

Big Oil has failed to respond to this through a combination of lobbying efforts that have been widely criticized by the public and a lack of investment in clean energy. Companies like BP have launched venture funds that aim to invest in cleantech but haven't been publicized well enough and haven't met many of the goals of climate leaders.

The fall of the fossil fuel industry won't be declining market share like it was for other industries. The fall of the fossil fuel industry will be because of a growing capital intensity.