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Burn Out: The Endgame for Fossil Fuels
An energy revolution is under way with far-reaching consequences for nations, companies, and the way we address climate change Low oil prices are sending shockwaves through the global economy, and longtime industry observer Dieter Helm explains how this and other shifts are the harbingers of a coming energy revolution and how the fossil fuel age will come to an end. Surveying recent surges in technological innovations, Helm’s provocative new book documents how the global move toward the internet-of-things will inexorably reduce the demand for oil, gas, and renewables—and prove more effective than current efforts to avert climate change. Oil companies and energy utilities must begin to adapt their existing business models or face future irrelevancy. Oil-exporting nations, particularly in the Middle East, will be negatively impacted, whereas the United States and European countries that are investing in new technologies may find themselves leaders in the geopolitical game. Timely and controversial, this book concludes by offering advice on what governments and businesses can and should do now to prepare for a radically different energy future.
303 pages, Kindle Edition
Published March 15, 2017
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211 people want to read
About the author
Dieter Helm
35 books25 followersDieter Helm is Fellow in Economics, New College, Oxford. He is also Professor of Energy Policy and Professorial Research Fellow, Smith School of Enterprise and the Environment, University of Oxford.
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Displaying 1 - 9 of 9 reviews
June 9, 2017
Let me get this straight immediately: I am a bit disappointed by this book.
Helm's "The carbon crunch" had been a very enlightening read, with a lot of new insights in the economics of climate change, and in particular the economics of the EU's climate policies. I had expected the same of "Burn out".
To be sure, the central thesis of the book (carbon fuels are on their way out, and faster than you think) is interesting and daring.
Unfortunately, Helm's new thesis isn't half as convincing as its predecessor.
For instance, Helm spends a lot of time explaining how forecasters mistook a temporary spike in the price of carbon fuels for a permanent trend. If these forecasts were indeed simple extrapolations of past trends, without attention to the fundamental of demand and supply, then Helm is certainly right when he castigates forecasters for their poor performance. But he is much less convincing when he argues that the real permanent trend is towards lower prices. Why should this be? After all, previous fluctuations were due to changes in demand and supply, where both demand and supply tend to react with serious lags to changing conditions: people do not immediately get rid of their gas guzzlers or do not immediately improve the insulation of their houses when prices rise, suppliers cannot open new refinery capacity or access new sources at the blink of an eye etc. Shale oil and gas, the decreasing cost of renewables and the zero-marginal cost of renewable energy production may have changed the economics of energy production, but there are still fundamental question marks. For instance, solar energy may have become very cheap, but you still need the interconnections to transport it from the place of production to the place of consumption. At this stage, I do not see the required massive investments in these interconnections. Anyway, to the extent that lower prices are the result of a global glut in the supply of energy, this decreases the incentives for energy conservation in the long run.
More fundamentally, the book relies a lot on the argument that, at some point in the future, climate change will start hitting the world so hard, that governments will take massive action to decarbonize the economy. Oh, really? At this stage, the only action we have is an agreement from which a major GHG producer has just withdrawn, that doesn't contain any enforceable commitment and that is grossly insufficient according to most scientists to meet even the 2°C target. Moreover, Helm has always argued that most climate actions at the European level were mostly a waste of money, involving investments in technologies that are not yet mature, and that decreases in European GHG emissions were the simple consequence of a secular process of de-industrialisation. What could possibly transform the logic of collective action in a way that, in a few decades from now, governments would stop trying to free-ride and would suddenly take sensible and cost-effective measures to promote renewables? This issue is key, but it is simply sidestepped.
This being said, I suppose that the key reason for my disappointment is simply that my expectations were too high. If you want to read a lively written and well documented overview of the deep transformations the energy sector is currently undergoing, there are certainly worse places to start from than "Burn Out". Just don't expect that you will gain insights on how to save the planet.
Helm's "The carbon crunch" had been a very enlightening read, with a lot of new insights in the economics of climate change, and in particular the economics of the EU's climate policies. I had expected the same of "Burn out".
To be sure, the central thesis of the book (carbon fuels are on their way out, and faster than you think) is interesting and daring.
Unfortunately, Helm's new thesis isn't half as convincing as its predecessor.
For instance, Helm spends a lot of time explaining how forecasters mistook a temporary spike in the price of carbon fuels for a permanent trend. If these forecasts were indeed simple extrapolations of past trends, without attention to the fundamental of demand and supply, then Helm is certainly right when he castigates forecasters for their poor performance. But he is much less convincing when he argues that the real permanent trend is towards lower prices. Why should this be? After all, previous fluctuations were due to changes in demand and supply, where both demand and supply tend to react with serious lags to changing conditions: people do not immediately get rid of their gas guzzlers or do not immediately improve the insulation of their houses when prices rise, suppliers cannot open new refinery capacity or access new sources at the blink of an eye etc. Shale oil and gas, the decreasing cost of renewables and the zero-marginal cost of renewable energy production may have changed the economics of energy production, but there are still fundamental question marks. For instance, solar energy may have become very cheap, but you still need the interconnections to transport it from the place of production to the place of consumption. At this stage, I do not see the required massive investments in these interconnections. Anyway, to the extent that lower prices are the result of a global glut in the supply of energy, this decreases the incentives for energy conservation in the long run.
More fundamentally, the book relies a lot on the argument that, at some point in the future, climate change will start hitting the world so hard, that governments will take massive action to decarbonize the economy. Oh, really? At this stage, the only action we have is an agreement from which a major GHG producer has just withdrawn, that doesn't contain any enforceable commitment and that is grossly insufficient according to most scientists to meet even the 2°C target. Moreover, Helm has always argued that most climate actions at the European level were mostly a waste of money, involving investments in technologies that are not yet mature, and that decreases in European GHG emissions were the simple consequence of a secular process of de-industrialisation. What could possibly transform the logic of collective action in a way that, in a few decades from now, governments would stop trying to free-ride and would suddenly take sensible and cost-effective measures to promote renewables? This issue is key, but it is simply sidestepped.
This being said, I suppose that the key reason for my disappointment is simply that my expectations were too high. If you want to read a lively written and well documented overview of the deep transformations the energy sector is currently undergoing, there are certainly worse places to start from than "Burn Out". Just don't expect that you will gain insights on how to save the planet.
April 13, 2023
May have been reading this book for maybe 5 years (had a few long pauses along the way) but it was good, even if it did feel a little like taking work home with me.
Interesting commentary on the energy markets, obviously 6 years on from publishing a lot has happened.
I didn't know much about the oil and gas markets and how the players interacted before reading this so definitely educational and the perspective on the fall of the wholesale market was also interesting.
Not for everyone though, only if you are actually interested in the economics of energy markets.
Interesting commentary on the energy markets, obviously 6 years on from publishing a lot has happened.
I didn't know much about the oil and gas markets and how the players interacted before reading this so definitely educational and the perspective on the fall of the wholesale market was also interesting.
Not for everyone though, only if you are actually interested in the economics of energy markets.
July 4, 2017
Disappointing - Helm's short papers are far better-argued and in-depth. His diagnosis of the oil market is probably correct but his following of the consequences is shallow, as is his potted history and analysis of the outlook for the Middle East and Russia. Also annoying is the quantity of sloppy errors - the Chinese bought Nexen (not Nexus), the Shell reserves scandal was in 2004 not "the 1990s", the Medvedev he's thinking of is probably Dmitry (not Alexander), Lee Raymond shaped the modern Exxon (not Rex Tillerson), Mossadeq had not led a "revolution" in Iran, BP took most of its dividends out of Russia during Putin's presidency (not before), and several more. His analysis of future electricity markets and criticisms of EU & UK energy policy are the most authoritative and convincing parts.
February 26, 2018
Sadly, this is not a book that fully lives up to its potential. When I read the Chinese chapter, I realized that the author´s analysis is slightly too ideological. Instead of thoroughly discussing the Chinese strategy in the realm of energy (like John Matthews did in his magistral book), Helm prefers to dissecate the Chinese regime (boring). While drawing conclusions about the future of capitalism and energy consumption in China, the author "forgets" the latest statistics about R&D, according to which China is doing a massive effort in that field. This is but just one example of how the book lost itself along the way...
But, on the other hand, Helm´s book does present some up to date relevant information.
But, on the other hand, Helm´s book does present some up to date relevant information.
May 29, 2017
It's hard to be critical of Helm's work when, as one of the UK's foremost energy experts, he conveys his arguments on a complex topic with such certainty. His thesis - that global energy markets are approaching widescale change, with resource-cursed countries, fossil fuel companies and vertically-integrated electric utilities declining - is compelling. For US readers, this will be a particularly reassuring read, predicting energy independence through shale resources and a corresponding manufacturing boom - all of which fit neatly, at least in the short-term, with Trump's apparent worldview. For Europe, early commitment to renewables augurs well as Helm forecasts the development of technologies capable of overcoming intermittency problems and the emergence of zero margin capacity markets replacing traditional wholesale markets. The gas 'bridging' argument is prominent; while Helm foresees increasing electrification, the short-term winner is the nascent, much-maligned shale industry, with huge, untapped resources providing energy security potential until everything else... falls into place. Much has been said and done in critiquing and intervening in the energy industry. It is a hugely complex and multi-faceted beast, rife with uncertainty, geopolitical sensitivity and vested interests. The innumerable actors seeking to influence the future of the industry complicate this further, and the ever-changing energy policy in the UK, for example, has failed to deliver a clear vision for the electorate. Helm's work, while partisan - particularly in relishing Saudi, Russian and Chinese decline - and optimistic about future technological progress, goes some way to illuminating some of the issues. Overall, this is informative reading for anyone wishing to participate in one of the most important debates of our times.
This entire review has been hidden because of spoilers.
June 6, 2020
Helm provides a great summary of the history and future outlook of the energy transition. This book is a great starter to understand where we stand today in terms of the energy shift. For those who are interested, Helm has uploaded several lectures on his site (http://www.dieterhelm.co.uk/helm-talks/) covering the key points of the book.
Nonetheless, the push and pull factors for the shift away from a carbon-dominated system are always changing, especially in light of the global pandemic. It will be interesting to see whether the pandemic will speed up or dampen the transition, as well as the change in attitudes towards the shift in its aftermath.
Nonetheless, the push and pull factors for the shift away from a carbon-dominated system are always changing, especially in light of the global pandemic. It will be interesting to see whether the pandemic will speed up or dampen the transition, as well as the change in attitudes towards the shift in its aftermath.
April 17, 2021
This book is very much about the oil industry from an insider's perspective, and I think is not as popular as his previous two books which talk more about the 'stranded assets' component of the energy transition.
September 6, 2019
Fascinating insight on energy transition, and the dominance of fossil fuel maybe closer to end much sooner than people think.
May 6, 2020
This book is best I have come across in terms of economic analysis of energy.
Displaying 1 - 9 of 9 reviews