Analyst Takes Operators

The Shifting Winds of Energy Transition

byAl Salazar, Enverus Intelligence® Research (EIR) Contributor

British Petroleum Backs Away From Renewables

The following blog is distilled from an interview on CBC’s “The Eyeopener,” hosted by Loren McGinnis who interviewed Enverus Intelligence® Research’s (EIR) very own Al Salazar. Click here to listen to the full radio segment.

The tide is shifting in the energy sector. Energy companies are under pressure because of waning profit margins and mounting shareholder pressure to increase value, slowing the energy transition evolution (e.g., renewable power sources, electric vehicles). Coupled with the policy changes from the Trump administration, renewable energy faces new and big hurdles.

A Changing Landscape in Energy Transition

A tangible sign of this shift is BP’s recent decision to refocus on oil production and back away from renewables. BP is not alone in this pivot; Exxon and Shell have also restructured their strategies to prioritize traditional oil and gas over renewable ventures. So far, it appears betting on renewables has not yet yielded the expected returns compared to traditional oil and gas investments.

“Looking at Shell’s, Exxon’s and BP’s share prices, it hasn’t paid to double down on renewables.
Instead, oil and gas investment has been rewarded by shareholders.”
– Al Salazar, Director of Macro Oil & Gas, Enverus Intelligence® Research

Fossil Fuel Still Dominate

Enverus Intelligence® Research (EIR) believes demand for oil and gas will continue to grow throughout this decade. Al Salazar identifies several factors contributing to this trend:

  • Oil consumption: Oil demand reached an all-time high in 2024, growing by 1 million barrels per day from 2023. Despite the drive towards electric vehicles, gasoline demand has also risen.
  • Natural gas: The liquefied natural gas sector is witnessing increased trade. Global natural gas demand also likely reached an all-time high in 2024.
  • Coal utilization: Particularly driven by demand in Asia, coal consumption set a record in 2023.

Despite these recent trends and demographic shifts — particularly the aging populations in Europe and China — energy demand growth will slow down materially. However, EIR remains optimistic about the future of natural gas since it serves as a bridge fuel helping balance the intermittency of renewable generation.

“The world is getting older. Europe’s and China’s working age populations are declining, so too will the growth in energy demand. Demand growth over the next 25 years will slow materially.”
-Al Salazar, Director of Macro Oil & Gas, Enverus Intelligence® Research

The Net-Zero Challenge

The goal of net-zero emissions remains highly ambitious. Salazar points out that 80% of the 77 countries analyzed by EIR are failing to meet their renewable targets. On oil specifically, for the world to be on track to meet net-zero goals, the Internal Energy Agency suggests global oil consumption must fall to around 85 million barrels per day by 2030 — a challenging feat given demand during the COVID-19 pandemic only declined to 89 million barrels a day. For context, global oil consumption averaged about 103 million barrels per day last year.

Canada’s Strategic Position

Alberta and Canada have the potential to benefit significantly from the changing energy focus. The EIR director noted Canada holds vast amounts of critical minerals as well as robust oil and gas reserves, especially in underinvested areas like the Montney play in northeastern B.C. and northwestern Alberta. Market access, however, remains an issue for Canada producers. On the other hand, U.S. operators face increasing production costs as low-cost oil reserves dwindle.

Canada’s resource quality may provide a competitive edge, but capitalizing on these resources will require better market connections. This is a significant obstacle as new pipelines are usually opposed by environmentalists, and sometimes landowners, and such projects often cost far more than estimated.

Moving Forward: A Balanced Energy Future

The energy transition, while slowing, is not dead and should regain momentum. Ambitious targets set by companies and countries may have been too optimistic given current technological and economic constraints. Investments in this sector are substantial, potentially in the billions of dollars, and guaranteed returns are far from certain. The road to a new energy era will be difficult, but with realistic goals and strategic utilization of available resources, the journey is not only about transition but also sustainability and resilience. Despite the challenges ahead, EIR maintains a bullish outlook on the oil and gas industry as it serves a critical role in meeting global energy needs.

About Enverus Intelligence® | Research

Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts, and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. See additional disclosures here.

Picture of Al Salazar, Enverus Intelligence® Research (EIR) Contributor

Al Salazar, Enverus Intelligence® Research (EIR) Contributor

Al Salazar is a seasoned member of the Enverus Intelligence team, bringing over 23 years of experience in the energy industry with a focus on fundamental analysis of oil, natural gas, and power. Throughout his career, Al has held key positions at EnCana/Cenovus and Suncor, where he honed his skills in forecasting, hedging, and corporate strategy. Al’s 15-year tenure at EnCana/Cenovus was particularly impactful, where he contributed significantly to the company’s success. Al earned his bachelor’s degree in Applied Energy Economics from the University of Calgary in 2000, followed by an MBA with honors from Syracuse University in 2007. Al’s academic background, coupled with his extensive professional experience, has equipped him with a deep understanding of the energy industry’s complexities and the necessary skills to navigate them effectively.

Subscribe to the Enverus Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Related Content

Enverus_Press_Release_Power_Energy_Transition_MandA_Thumbnail
Energy Transition
ByAdam Robinson, Enverus Intelligence® | Research (EIR) Contributor

A combined $92 billion in energy and artificial intelligence (AI)-related investments were announced across Pennsylvania last week, with projects ranging from new data centers to natural gas plants and grid modernization efforts.

Enverus Press Release - Welcome to EVOLVE 2025: Where visionaries converge to shape the future of energy
Power and Renewables
ByColton Wright

As demand for AI, cloud computing and digital infrastructure continues to surge, hyperscale data centers have quickly become some of the largest and fastest-growing energy consumers in North America. For developers, grid operators and investors, knowing where the biggest loads are concentrated...

Breaking news alert on the impact on oil prices due to Israel attacking Iran
Power and Renewables
ByColton Wright

The One Big Beautiful Bill Act (OBBBA) has changed the game for renewable energy developers. With fewer subsidies to fall back on, developers are being pushed to rethink where and how they build projects. It’s no longer about chasing tax...

Enverus Press Release - Enverus releases Investor Analytics: Refined, actionable financial insights at your fingertips
Power and Renewables
ByDaniel Manfre Jaimes

In the dynamic landscape of energy markets, accurate load forecasting is essential for informed decision-making. Enverus power forecasting solutions have consistently demonstrated exceptional performance, particularly during extreme weather events and critical peak demand periods. Complementing this reliability, our ongoing commitment...

How the One Big Beautiful Bill Act could change clean energy tax credit economics
Energy Transition
ByAlex Nevokshonoff, Senior Analyst, Enverus Intelligence® | Research (EIR) Contributor

The One Big Beautiful Bill Act (OBBBA), enacted on July 4, introduces sweeping changes to U.S. energy policy, significantly altering the tax credit landscape for clean energy projects.

Enverus Press Release - Upstream M&A climbs to $105 billion in 2024
Trading and Risk
ByKiana Cruz

In today’s fast-paced markets; traders don’t just need data, they need decisions. At EVOLVE 2025, the Trading & Risk session, “AI-Powered Trading Intelligence: Streamlining Decision Workflows,” spotlighted how artificial intelligence is evolving from a buzzword to a business-critical tool for...

data-center-demand
Energy Transition
ByAdam Robinson, Enverus Intelligence® | Research (EIR) Contributor

The Texas Tech University (TTU) System and Fermi America announced an 11 GW data center powered by a mix of natural gas, utility grid power, solar, wind and nuclear energy. The newly founded power company is building one of the...

Enverus Press Release - Enverus PRISM® now available for Europe
Trading and Risk
ByKiana Cruz

EVOLVE 2025 brought together leading voices across energy trading, analytics and clean fuels to unpack today’s most pressing market dynamics. From evolving benchmarks to retail analytics, one thing rang loud and clear: adaptation isn’t optional, it’s strategic. We attended four...

Black-lady-with-powerline
Energy Transition
ByCorianna Mah, Analyst, Enverus Intelligence® Research

A massive heat dome swept across the eastern U.S. last week, driving temperatures into the triple digits and pushing the PJM Interconnection grid to its highest peak load since 2006.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Sign up for our Blog

Register Today

Sign Up

Power Your Insights

Connect with an Expert

Access Product Tour

Speak to an Expert