Scott Barbee on future oil consumption

Generally, oil demand has been dominated overwhelmingly by long term consumption growth trends in Asia, as China, India and other developing countries relentlessly increase their per capita oil consumption.  Such trends are also quite likely to continue well into the future, despite the multitude of political narratives de rigueur against fossil fuels, as 7 billion people on earth who consume an average of 3 bbls/yr desire to live like the other 1 billion who consume an average of 16 bbls/year.  Increased use of low-cost, fossil fuel energy remains critical to the alleviation of poverty and a more inclusive global economic development, with fossil fuel energy demand unlikely to easily or inexpensively be supplanted by alternatives through government fiat.  Goldman Sachs' commodities analyst Jeff Currie recently pointed out that $3.8 trillion in investment in renewables has been spent over the last 10 years.  These expenditures have been financed to a large extent from taxpayer handouts and through other government market distortions.  However, despite all these costly expenditures over the last 10-years, the share of total global energy consumption met by fossil fuels has only dropped by one percent, from 82 percent to 81 percent.

~ Scott L. Barbee, portfolio manager, Aegis Value Fund, "Aegis Value Fund H1 2023 Portfolio Manager's Letter," Seeking Alpha, December 13, 2023