Carbon Purgatory: The dysfunctional political economy of oil during the energy transition

Abstract

Since 2014 a historic breakdown of oil and gas investment has occurred. While capital flows to global renewable energy investment remain woefully short of net-zero targets, investments into oil and gas are so low they are roughly in-line with these same net-zero targets. This dual under-investment into the future of both fossil fuels and renewable energy is neither well known nor discussed in energy geography. Yet this dysfunctional investment pattern has already begun to have substantial negative impacts on energy consumers and broader social processes. This paper argues that this poorly understood phenomenon of under-investment into any energy future presents an additional challenge to a capitalist-led energy transition. Not only are global renewable investment targets inadequate, but the dysfunctional wind-down of oil and natural gas has resulted in a period of extreme price volatility and market turmoil. This carbon purgatory is poised to both delay the energy transition and inflict significant damage on vulnerable consumers in the process. Drawing on financial data and discourse from the oil and gas industry, this paper presents the importance of this issue and its relationship to existing geographic work on the contradictions of a market-led capitalist energy transition. It concludes with a provocation to re-frame our understanding of the energy transition crisis as, first and foremost, a crisis of the irrationality of capitalist energy production.