We will never stop the fossil fuel industry by banning it. It will only stop itself when its business becomes unprofitable.

And that may happen sooner than you think

Steve Genco
7 min readJan 12, 2024

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A poster attached to a street sign reads Break Free from Fossil Fuels.
Photo by Eelco Böhtingk on Unsplash

The fossil fuel industry is a nasty business. Its leaders knew 50 years ago they were poisoning the planet. They chose to hide that knowledge, lie to the world, and maximize profits at all costs. Today, if you ask why they are continuing to promote fossil fuels over electrification (e.g., source), the answer is again profits. As one industry analyst has noted, the internal rate of return (IRR) for money invested in oil and gas projects today is between 20–50% (assuming oil remains at $75-$85 per barrel, where it sits today). Investing in renewable energy projects, in contrast, would only yield an IRR of about 5–10% (source). So its a simple business decision for the oil giants. They pursue the path that leads to the highest profits, any externalities or environmental damage inflicted along the way is someone else’s problem.

But that unrelenting focus on profits is also the key to how the age of fossil fuels will end. Because when oil becomes unprofitable, the oil and gas giants will stop producing it. They didn’t care about the damage back when they learned they were causing global warming. They don’t care about the damage they are causing today by trying to disrupt the transition to renewable energy. And they won’t care about the damage they will be causing the global economy tomorrow when they turn off the spigots. It will be a simple business decision.

The end of oil will be the greatest disruption in the history of human civilization, and it will only happen when the fossil fuel industry decides fossil fuels are no longer profitable to produce.

A recent conversation between oil industry analyst Art Berman and climate activist Nate Hagens, available here, provides some insights into how this descent into unprofitability might play out. Based on a comprehensive analysis of US oil production from 1950 to the present, Berman discovered an apparent paradox: while per-well performance of US oil production has declined steadily since the 1950s and…

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Steve Genco

Steve is author of Intuitive Marketing (2019) & Neuromarketing for Dummies (2013). He holds a PhD in Political Science from Stanford University.