Energy Shift
The History of Energy Transitions
The History of Energy Transitions
Over the last 200 years, how we’ve gotten our energy has changed drastically.
These changes were driven by innovations like the steam engine, oil lamps, internal combustion engines, and the wide-scale use of electricity. The shift from a primarily agrarian global economy to an industrial one called for new sources to provide more efficient energy inputs.
The current energy transition is powered by the realization that avoiding the catastrophic effects of climate change requires a reduction in greenhouse gas emissions. This infographic provides historical context for the ongoing shift away from fossil fuels using data from Our World in Data and scientist Vaclav Smil.
Coal and the First Energy Transition
Before the Industrial Revolution, people burned wood and dried manure to heat homes and cook food, while relying on muscle power, wind, and water mills to grind grains. Transportation was aided by using carts driven by horses or other animals.
In the 16th and 17th centuries, the prices of firewood and charcoal skyrocketed due to shortages. These were driven by increased consumption from both households and industries as economies grew and became more sophisticated.
Consequently, industrializing economies like the UK needed a new, cheaper source of energy. They turned to coal, marking the beginning of the first major energy transition.
| Year | Traditional Biomass % of Energy Mix | Coal % of Energy Mix |
|---|---|---|
| 1800 | 98.3% | 1.7% |
| 1820 | 97.6% | 2.4% |
| 1840 | 95.1% | 4.9% |
| 1860 | 86.8% | 13.3% |
| 1880 | 73.0% | 26.7% |
| 1900 | 50.4% | 47.2% |
| 1920 | 38.4% | 54.4% |
| 1940 | 31.6% | 50.7% |
As coal use and production increased, the cost of producing it fell due to economies of scale. Simultaneously, technological advances and adaptations brought about new ways to use coal.
The steam engine—one of the major technologies behind the Industrial Revolution—was heavily reliant on coal, and homeowners used coal to heat their homes and cook food. This is evident in the growth of coal’s share of the global energy mix, up from 1.7% in 1800 to 47.2% in 1900.
The Rise of Oil and Gas
In 1859, Edwin L. Drake built the first commercial oil well in Pennsylvania, but it was nearly a century later that oil became a major energy source.
Before the mass production of automobiles, oil was mainly used for lamps. Oil demand from internal combustion engine vehicles started climbing after the introduction of assembly lines, and it took off after World War II as vehicle purchases soared.
Similarly, the invention of the Bunsen burner opened up new opportunities to use natural gas in households. As pipelines came into place, gas became a major source of energy for home heating, cooking, water heaters, and other appliances.
| Year | Coal % of Energy Mix | Oil % of Energy Mix | Natural Gas % of Energy Mix |
|---|---|---|---|
| 1950 | 44.2% | 19.1% | 7.3% |
| 1960 | 37.0% | 26.6% | 10.7% |
| 1970 | 25.7% | 40.2% | 14.5% |
| 1980 | 23.8% | 40.6% | 16.3% |
| 1990 | 24.4% | 35.5% | 18.4% |
| 2000 | 22.5% | 35.1% | 19.7% |
Coal lost the home heating market to gas and electricity, and the transportation market to oil.
Despite this, it became the world’s most important source of electricity generation and still accounts for over one-third of global electricity production today.
The Transition to Renewable Energy
Renewable energy sources are at the center of the ongoing energy transition. As countries ramp up their efforts to curb emissions, solar and wind energy capacities are expanding globally.
Here’s how the share of renewables in the global energy mix changed over the last two decades:
| Year | Traditional Biomass | Renewables | Fossil Fuels | Nuclear Power |
|---|---|---|---|---|
| 2000 | 10.2% | 6.6% | 77.3% | 5.9% |
| 2005 | 8.7% | 6.5% | 79.4% | 5.4% |
| 2010 | 7.7% | 7.7% | 79.9% | 4.7% |
| 2015 | 6.9% | 9.2% | 79.9% | 4.0% |
| 2020 | 6.7% | 11.2% | 78.0% | 4.0% |
In the decade between 2000 and 2010, the share of renewables increased by just 1.1%. But the growth is speeding up—between 2010 and 2020, this figure stood at 3.5%.
Furthermore, the current energy transition is unprecedented in both scale and speed, with climate goals requiring net-zero emissions by 2050. That essentially means a complete fade-out of fossil fuels in less than 30 years and an inevitable rapid increase in renewable energy generation.
Renewable energy capacity additions were on track to set an annual record in 2021, following a record year in 2020. Additionally, global energy transition investment hit a record of $755 billion in 2021.
However, history shows that simply adding generation capacity is not enough to facilitate an energy transition. Coal required mines, canals, and railroads; oil required wells, pipelines, and refineries; electricity required generators and an intricate grid.
Similarly, a complete shift to low-carbon sources requires massive investments in natural resources, infrastructure, and grid storage, along with changes in our energy consumption habits.
Energy Shift
Ranked: The Most Carbon-Intensive Sectors in the World
Comparing average Scope 1 emission intensities by sector, according to an analysis done by S&P Global Inc.
Ranked: The Most Carbon-Intensive Sectors in the World
Ever wonder which sectors contribute the most to CO2 emissions around the world?
In this graphic, we explore the answers to that question by comparing average Scope 1 emission intensities by sector, according to an analysis done by S&P Global Inc.
Defining Scope 1 Emissions
Before diving into the data, it may be useful to understand what Scope 1 emissions entail.
Scope 1 emissions are direct greenhouse gas emissions from sources that are owned or controlled by a company, such as their facilities and vehicles.
Source: U.S. Environmental Protection Agency
Scope 1 emissions can do a good job of highlighting a company’s environmental footprint because they represent the direct emissions related to manufacturing or creating a company’s products, whether they are tangible goods, digital software, or services.
Scope 2 and 3 emissions, on the other hand, encompass the indirect emissions associated with a company’s activities, including those from a company’s purchased electricity, leased assets, or investments.
Ranking the Carbon Giants
According to S&P Global’s analysis of 2019-2020 average emissions intensity by sector, utilities is the most carbon-intensive sector in the world, emitting a staggering 2,634 tonnes of CO2 per $1 million of revenue.
Materials and energy sectors follow behind, with 918 tonnes and 571 tonnes of CO2 emitted, respectively.
| Sector | Sector Explanation | Scope 1 CO2 emissions per $1M of revenue, 2019-2020 |
|---|---|---|
| Utilities | Electric, gas, and water utilities and independent producers | 2,634 tonnes |
| Materials | Chemicals, construction materials, packaging, metals, and mining | 918 tonnes |
| Energy | Oil and gas exploration/production and energy equipment | 571 tonnes |
| Industrials | Capital goods, commercial services, and transportation | 194 tonnes |
| Consumer staples | Food, household goods, and personal products | 90 tonnes |
| Consumer discretionary | Automobiles, consumer durables, apparel, and retailing | 33 tonnes |
| Real estate | Real estate and real estate management | 31 tonnes |
| Information technology | Software, technology hardware, and semiconductors | 24 tonnes |
| Financials | Banks, insurance, and diversified financials | 19 tonnes |
| Communication services | Telecommunication, media, and entertainment | 9 tonnes |
| Health care | Health care equipment, pharmaceuticals, biotechnology, and life sciences | 7 tonnes |
S&P Global also reveals some interesting insights when it comes to various industries within the materials sector, including:
- Cement manufacturing exhibits an extremely high level of Scope 1 emissions, emitting more than double the emissions from the utilities sector (5,415 tonnes of CO2 per $1M of revenue)
- Aluminum and steel production are also quite emission-intensive, emitting 1,421 and 1,390 tonnes respectively in 2019-2020
- Relatively lower-emission materials such as gold, glass, metals and paper products bring down the average emissions of the materials sector
Given these trends, a closer look at emission-intensive industries and sectors is necessary for our urgent need to decarbonize the global economy.
Energy Shift
Ranked: The World’s Biggest Oil Producers
Just three countries—the U.S., Saudi Arabia and Russia—make up the lion’s share of global oil supply. Here are the world’s biggest oil producers.
Ranked: The World’s Biggest Oil Producers
This visualization originally appeared on Visual Capitalist
In 2022 oil prices peaked at more than $100 per barrel, hitting an eight-year high, after a full year of turmoil in the energy markets in the wake of the Russian invasion of Ukraine.
Oil companies doubled their profits and the economies of the biggest oil producers in the world got a major boost.
But which countries are responsible for most of the world’s oil supply? Using data from the Statistical Review of World Energy by the Energy Institute, we’ve visualized and ranked the world’s biggest oil producers.
Ranked: Oil Production By Country, in 2022
The U.S. has been the world’s biggest oil producer since 2018 and continued its dominance in 2022 by producing close to 18 million barrels per day (B/D). This accounted for nearly one-fifth of the world’s oil supply.
Almost three-fourths of the country’s oil production is centered around five states: Texas, New Mexico, North Dakota, Alaska, and Colorado.
We rank the other major oil producers in the world below.
| Rank | Country | 2022 Production (Thousand B/D) | YoY Change | Share of World Supply |
|---|---|---|---|---|
| 1 | 🇺🇸 U.S. | 17,770 | +6.5% | 18.9% |
| 2 | 🇸🇦 Saudi Arabia | 12,136 | +10.8% | 12.9% |
| 3 | 🇷🇺 Russia | 11,202 | +1.8% | 11.9% |
| 4 | 🇨🇦 Canada | 5,576 | +3.0% | 5.9% |
| 5 | 🇮🇶 Iraq | 4,520 | +10.2% | 4.8% |
| 6 | 🇨🇳 China | 4,111 | +2.9% | 4.4% |
| 7 | 🇦🇪 UAE | 4,020 | +10.4% | 4.3% |
| 8 | 🇮🇷 Iran | 3,822 | +4.6% | 4.1% |
| 9 | 🇧🇷 Brazil | 3,107 | +3.9% | 3.3% |
| 10 | 🇰🇼 Kuwait | 3,028 | +12.0% | 3.2% |
| 11 | 🇲🇽 Mexico | 1,944 | +0.9% | 2.1% |
| 12 | 🇳🇴 Norway | 1,901 | -6.3% | 2.0% |
| 13 | 🇰🇿 Kazakhstan | 1,769 | -2.0% | 1.9% |
| 14 | 🇶🇦 Qatar | 1,768 | +1.8% | 1.9% |
| 15 | 🇩🇿 Algeria | 1,474 | +8.9% | 1.6% |
| 16 | 🇳🇬 Nigeria | 1,450 | -11.2% | 1.5% |
| 17 | 🇦🇴 Angola | 1,190 | +1.1% | 1.3% |
| 18 | 🇱🇾 Libya | 1,088 | -14.3% | 1.2% |
| 19 | 🇴🇲 Oman | 1,064 | +9.6% | 1.1% |
| 20 | 🇬🇧 UK | 778 | -11.0% | 0.8% |
| 21 | 🇨🇴 Colombia | 754 | +2.4% | 0.8% |
| 22 | 🇮🇳 India | 737 | -3.8% | 0.8% |
| 23 | 🇻🇪 Venezuela | 731 | +8.1% | 0.8% |
| 24 | 🇦🇷 Argentina | 706 | +12.4% | 0.8% |
| 25 | 🇦🇿 Azerbaijan | 685 | -5.6% | 0.7% |
| 26 | 🇮🇩 Indonesia | 644 | -6.9% | 0.7% |
| 27 | 🇪🇬 Egypt | 613 | +0.8% | 0.7% |
| 28 | 🇲🇾 Malaysia | 567 | -1.7% | 0.6% |
| 29 | 🇪🇨 Ecuador | 481 | +1.7% | 0.5% |
| 30 | 🇦🇺 Australia | 420 | -5.2% | 0.4% |
| 31 | 🇹🇭 Thailand | 331 | -17.5% | 0.4% |
| 32 | 🇨🇩 Congo | 269 | -1.7% | 0.3% |
| 33 | 🇹🇲 Turkmenistan | 244 | +1.0% | 0.3% |
| 34 | 🇻🇳 Vietnam | 194 | -1.2% | 0.2% |
| 35 | 🇬🇦 Gabon | 191 | +5.4% | 0.2% |
| 36 | 🇸🇸 South Sudan | 141 | -7.6% | 0.2% |
| 37 | 🇵🇪 Peru | 128 | +0.5% | 0.1% |
| 38 | 🇹🇩 Chad | 124 | +6.2% | 0.1% |
| 39 | 🇬🇶 Equatorial Guinea | 119 | -9.2% | 0.1% |
| 40 | 🇸🇾 Syria | 93 | -2.7% | 0.1% |
| 41 | 🇮🇹 Italy | 92 | -7.9% | 0.1% |
| 42 | 🇧🇳 Brunei | 92 | -13.8% | 0.1% |
| 43 | 🇾🇪 Yemen | 81 | -2.4% | 0.1% |
| 44 | 🇹🇹 Trinidad & Tobago | 74 | -3.6% | 0.1% |
| 45 | 🇷🇴 Romania | 65 | -6.2% | 0.1% |
| 46 | 🇩🇰 Denmark | 65 | -1.6% | 0.1% |
| 47 | 🇺🇿 Uzbekistan | 63 | -0.9% | 0.1% |
| 48 | 🇸🇩 Sudan | 62 | -3.3% | 0.1% |
| 49 | 🇹🇳 Tunisia | 40 | -12.9% | 0.0% |
| 50 | Other CIS | 43 | +4.4% | 0.0% |
| 51 | Other Middle East | 210 | +1.2% | 0.2% |
| 52 | Other Africa | 283 | -3.4% | 0.3% |
| 53 | Other Europe | 230 | -20.5% | 0.2% |
| 54 | Other Asia Pacific | 177 | -10.6% | 0.2% |
| 55 | Other S. & Cent. America | 381 | +68.5% | 0.4% |
| Total World | 93,848 | +4.2% | 100.0% |
Behind America’s considerable lead in oil production, Saudi Arabia (ranked 2nd) produced 12 million B/D, accounting for about 13% of global supply.
Russia came in third with 11 million B/D in 2022. Together, these top three oil producing behemoths, along with Canada (4th) and Iraq (5th), make up more than half of the entire world’s oil supply.
Meanwhile, the top 10 oil producers, including those ranked 6th to 10th—China, UAE, Iran, Brazil, and Kuwait—are responsible for more than 70% of the world’s oil production.
Notably, all top 10 oil giants increased their production between 2021–2022, and as a result, global output rose 4.2% year-on-year.
Major Oil Producing Regions in 2022
The Middle East accounts for one-third of global oil production and North America makes up almost another one-third of production. The Commonwealth of Independent States—an organization of post-Soviet Union countries—is another major regional producer of oil, with a 15% share of world production.
| Region | 2022 Production (Thousand B/D) | YoY Change | Share of World Supply |
|---|---|---|---|
| Middle East | 30,743 | +9.2% | 32.8% |
| North America | 25,290 | +5.3% | 27.0% |
| CIS | 14,006 | +0.9% | 14.9% |
| Africa | 7,043 | -3.5% | 7.5% |
| Asia Pacific | 7,273 | -1.4% | 7.8% |
| South & Central America | 6,361 | 7.2% | 6.8% |
| Europe | 3,131 | -8.6% | 3.3% |
What’s starkly apparent in the data however is Europe’s declining share of oil production, now at 3% of the world’s supply. In the last 20 years the EU’s oil output has dropped by more than 50% due to a variety of factors, including stricter environmental regulations and a shift to natural gas.
Another lens to look at regional production is through OPEC members, which control about 35% of the world’s oil output and about 70% of the world’s oil reserves.
When taking into account the group of 10 oil exporting countries OPEC has relationships with, known as OPEC+, the share of oil production increases to more than half of the world’s supply.
Oil’s Big Balancing Act
Since it’s the very lifeblood of the modern economy, the countries that control significant amounts of oil production also reap immense political and economic benefits. Entire regions have been catapulted into prosperity and wars have been fought over the control of the resource.
At the same time, the ongoing effort to pivot to renewable energy is pushing many major oil exporters to diversify their economies. A notable example is Saudi Arabia, whose sovereign wealth fund has invested in companies like Uber and WeWork.
However, the world still needs oil, as it supplies nearly one-third of global energy demand.
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