Many people see that increased demand for electric vehicles, cryptocurrencies, and going “green” would negatively impact the oil and gas industry.

But how will it all impact the fossil fuel sector? 

Let’s dive in to find out what the rise in new technologies like blockchain and electric vehicles means for the energy sector.

Key Takeaways:

How Vehicle Electrification Impacts Electrical Grid?

Electric vehicles (EVs) only account for 2.6% of global car sales and about 1% of the worldwide car stock in 2019. It’s projected that there won’t be any significant impact on the electrical grid until 15% of the total vehicles go electric. And according to a New Energy Finance report published by Bloomberg, it’s not predicted to happen until 2035.

However, if 80% of car owners switch to electric vehicles, it would increase electricity consumption by 10-15%.

How Cryptocurrency Impacts Electrical Grid?

It’s a well-known fact that cryptocurrency mining consumes an enormous amount of electricity. The reason behind it is that miners need to solve complex mathematical problems that require more brute force computation than brains. Plus, it requires a trial-and-error approach for blockchain to enable a block of transactions.

Therefore, the computer processors have to run uninterrupted throughout the day to scan all combinations for arriving at the correct key. 

What’s more, you can’t mine cryptocurrency with your basic or even a very good home computer. Crypto miners need powerful graphics processing units (GPUs), also known as ASICs – application-specific integrated circuits. And these processors are known to be energy guzzlers, directly impacting the electrical grid.

According to blockchain reports, a single Bitcoin transaction takes as much as 1,544 kWh of energy. This is equivalent to the power that an average US household would consume for at least 53 days.

The “Green New Deal” Impact on Oil & Gas Owners

In January 2007, Pulitzer Prize-winner Thomas Friedman first used the term “Green New Deal,” which is now a movement that aims to reduce emissions. 

Thomas states that transitioning away from fossil fuels would require the government to raise prices while introducing higher energy standards.

What This Means for Your Money

An increase in demand for cryptocurrency and electric vehicles means that the electrical grid will increase in the nearest future as well. 

While many people see electricity as something that would replace fossil fuel usage, it’s not quite accurate. In fact, according to the U.S. Energy Information Administration, fossil fuels generated over 60% of electricity in 2020.

There are several reasons why most industries will continue using oil and gas. First and foremost, it’s typically less expensive to use natural gas instead of coal for producing electricity.

And the fact that the government might increase prices on fossil fuels means more profit to oil and gas owners and, ultimately, investors.

Overall a strategic approach to investing can help you maximize your profits. Need expert assistance to start investing in the oil and gas industry the right way? Contact us or visit our resource center to learn more about the energy sector.