Salim Ismail: A Barrel of Oil Will be Worth Near Zero

We're moving from energy scarcity to energy abundance over the next few years, primarily driven by solar energy, which is doubling every 22 months in its price performance and has been doing so for 40 years.

Lisa Pereira
Lisa Pereira

Suppose you’ve been following Salim Ismail, founder of OpenExO, and other futurist thinkers like Ramez Naam. In that case, you can see how solar and renewable energy will decrease the dependence on oil and eventually bring a barrel of oil to be worth almost zero.

In an interview on the show with anchor Liz Claman, Salim Ismail states that solar and renewable energy will take over oil and gas in 10 years.

Salim Ismail: What's the macro-environment that's happening is we're moving from energy scarcity to energy abundance over the next few years, primarily driven by solar energy, which is doubling every 22 months in its price-performance and has been doing so for 40 years.

At that pace, we believe we will be able to deliver all of our energy needs using solar in literally ten years. We are a few doublings away from that. At that point, all of Putin's gas and oil reserves essentially go to near zero. We think oil will end up at about $14 a barrel, which will wipe out most of the oil-producing countries.

Liz Claman: Why hasn’t he been smart enough like the Saudis to diversify? The Saudis realized they were too dependent on crude oil. It really is all that Russia has when it comes to fossil fuel opportunities.

Salim Ismail: Saudi is not moving away that quickly. It's very hard to shift a global economy like this or a national economy. The advantage that Saudi has is their extraction costs are very, very low compared to most of the world. I'm Canadian in the extraction costs are almost $45 a barrel. Russia’s extraction costs caused it to have huge problems down the line, and it's very hard to diversify a major economy even though Russia is not that big. It's still big enough to have to transform the whole country to do this. 70% of their exports are oil.

Liz Claman: I think what you've said about Russia's most important asset and resource are oil and natural gas. The value that may go to near zero is one of the most significant things that we've heard as to why he invaded Ukraine and trying to swallow up more land and to continue at least with this fever dream he has about returning to the Soviet-era dominance.

Catch the entire segment here

Will the Ukraine-Russia Crisis inadvertently speed up the transition to renewables globally?

This war will definitely motivate countries to eliminate their dependence on oil and other fossil fuels away from Russia. Covid showed us the challenges of a global supply chain. These two events will accelerate the need for renewables and reconsider where high-tech goods and food come from and manufacturing locations.

According to Enerdata and their breakdown by country, the production and use of renewable energy are rising. Renewable energies now account for more than 30% of the electricity consumed on the planet. Enerdata, a consulting firm that annually publishes a study on energy, production, and consumption worldwide and its environmental impact, shows the latest 2020 data by country. Norway has 98.4% clean energy, followed by Brazil with 84.1% green energy.

Ramez Naam, in his talks, illustrates the increasing advantage and attractiveness of clean energy as the cost of solar, wind, and energy storage drops. In his recent article on Medium, Putin’s Invasion of Ukraine Will Accelerate Climate, Energy, and Deep Technologies — Part 1: Overview, he outlines six sectors (energy, manufacturing, food and agriculture, infrastructure, transportation, and human augmentation) where we will see an increase in the development of new technological solutions.

“We believe that this conflict will lead Europe and the US to drive faster toward new clean technologies that can reduce dependence on fossil fuels from potentially hostile states; that can address the need to decarbonize the global economy to solve climate change; along with innovation and onshoring of other technologies that can improve human wellbeing.”  - Ramez Naam

Here's a short clip of Ramez Naam in 2020 talking about the future of energy and how we will get to energy abundance.

As our dependence on oil and fossil fuels decreases, let’s hope that we are heading towards more of a Star Trek future and that Abundance mindset rather than scarcity and Mad Max.

For more stories on the Ukraine-Russia Crisis by the OpenExO community, check out:

Exponential Opportunity Meets Exponential Responsibility by Peter Wicher

The Cyber War Against Russia: Three Things We Can Learn About High Performing Global Teams by Sophie Krantz

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Ukraine-Russia CrisisSalim IsmailClimate ChangeRenewable EnergyRamez Naam

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Lisa’s MTP is leveraging innovation for equity, so all voices are heard. Senior Editor at OpenExo & working on the Exponential Organizations Book series. Worked at SU & Stanford. ASNE Reynolds Fellow.