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Energy Transition Reality in Four Charts - Updated June 3, 2024

Energy Transition Reality in Four Charts


The consensus view of the energy transition needs a reset.  That old view emerged during the gloomy days of the pandemic and does not reflect today’s reality. Our view is that the outlook for peak oil demand is much higher and much further away than consensus thinking.

We look for global oil demand to hit 116 million barrels per day (mb/d) by 2037.  This compares to current consumption of about 103 mb/d.   The consensus view holds that oil demand will peak at 105-106 md/d by 20301.

I am sick of the energy transition discussion.  Instead invest in oil & natural gas realistically to meet demand

Who Wins?

As the world’s largest producer of oil and gas, the U.S. energy sector will play an increasingly important role in satisfying the growth in global consumption. We expect exports of petroleum liquids and LNG to expand to meet foreign demand.

Our investments are focused on the midstream sector. As U.S. production and exports rise above consensus forecasts, we expect these companies will meet and exceed growth expectations1.


In the sections below, we highlight some of the critical factors influencing this reset of the energy sector outlook:


1.   The energy transition is not happening.  

Energy Transition Reality Chart 1 - Global Population Growth Drives Energy "Addition"

An estimated $9.5 trillion has been spent on green energy resources in the last two decades and the mix of energy sources has barely changed.


Wind and Solar now contribute 3-4% of the global energy supply. Carbon-based fuels provide about 82% of total supply, down from 86% at the start of this century2.


Yet demand for coal, oil, and natural gas hits new highs almost every year.


Renewable energy resources are welcome additions to the existing energy supply.  However, these renewable resources are not enough to cover even incremental demand, let alone appear to be able to replace existing carbon-based energy resources.


Global demand for energy keeps growing.  Across the globe, power producers and related infrastructure companies are in a race to keep up.  All available supplies are needed. 


Energy transitions take decades.  However, what has changed so far is the mix of the types of energy resources.  None of the fossil energy and fuel production facilities are disappearing.  New "green energy" resources are only partially helping to meet current growing demand.  All "green energy" and "fossil fuel energy" production facilities are needed as overall energy and fuel needs increase.


2.    The green energy revolution focuses more on replacing oil and gas than on reducing carbon emissions. 

Energy Reality Chart 2 - Coal Plant to Natural Gas Plant Net CO2 Reduction 2020

Overlooked is the key role natural gas plays in reducing emissions in the electricity market.

The shift from coal to natural gas-fired power plants accounts for almost two-thirds of the reduction in U.S. carbon emissions in recent years. Realistic energy transition plans embrace the use of natural gas.

Coal-burning plants still supply 17% of the electric demand in the U.S. and a much larger portion of electric power abroad. Increased use of natural gas could produce dramatic reductions in carbon emissions globally.

Despite this opportunity to reduce global emissions, the construction of gas-fired power plants and LNG export facilities runs into obstacles inadvertently caused by U.S. regulators. We think these obstacles will prove to be temporary.


3.   Population Growth Drives Oil and Gas Demand Higher

Energy Transition Chart 3 - World Population (Billions)

Nonetheless, the International Energy Agency (EIA) expects peak oil demand to occur by 2030. Given population growth forecasts, this outlook is a delusion.

A simple reality check is to review the historical data on per capita consumption of oil and the outlook for global population growth.

  • Our analysis shows that consumption of oil per year has trended around 4 barrels per capita since 19652. It inched down a little during the pandemic but is now back on trend.

  • We use UN projections of world population growth3. It forecasts growth from about 8 billion people in late-2022 to 8.5 billion in 2030, an increase of almost 6%. With no change in per capita consumption, global oil demand will hit 110 million barrels/day, a level substantially greater than the EIA forecast of 105-106 mb/d.

  • In 2037, the UN expects the world population to be 9 billion, an increase of 12.5% from the current level. If the per capita consumption rate is stable, oil demand will approach 116 mb/d.

It’s worth noting that oil has maintained its steady per capita consumption rate while becoming a much smaller share of total energy consumption. In 1965, oil’s share of energy consumption was about 42% of the total while today it is about 32%2.

Will the per capita rate of oil consumption fall? It seems unlikely because of its key role in transportation. Moreover, developing nations with low incomes will be focused on their need for low-cost, reliable sources of energy. Oil, natural gas, and coal are their first choices. Renewable alternatives are too costly.


4. Low- and middle-income countries with growing populations and increasing economic prosperity will consume increasing amounts of energy per capita.

The potential for demand growth in Africa, India, and China is huge.  Hydrocarbons remain the lowest cost and most easily transported and stored fuels. 


Almost seven billion people live in low- and middle-income countries while about a billion live in the wealthiest nations4.  The contrast in wealth and energy consumption is staggering.  A sample of oil consumption rates is in the table below2.

Energy Transition Chart 4 - Oil Consumption per Capita per Year (barrels)

In low- or middle-income nations, oil consumption ranges from 1.0 to 3.2 barrels per capita per year, while some developed nations consume ten or more times that level.

Per capita rates of oil consumption in low-or middle-income countries can rise dramatically over time as economies expand. Since 2000, per capita oil consumption in China rose from 1.3 barrels per day to 3.22. Total demand increased from 5.2 mb/d to 13.5 mb/d, a 260% increase5.

Other countries could experience similar growth, and the consumption levels would still be a fraction of that found in the world’s wealthier nations.


Scenarios exist that suggest global oil demand could increase by tens of millions of barrels/day from the current level, suggesting the oil and gas industry will be viable over the very long-term.  We think the surprise will be to the upside.


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1 “Oil 2023, Analysis and forecast to 2028.” International Energy Agency, Jun. 2023.

2 U.S. Energy Information Administration (2023); Energy Institute - Statistical Review of World Energy (2023),; Population-based on various sources (2023) – with major processing by Our World in Data. “Primary energy consumption per capita”, U.S. Energy Information Administration, “International Energy Data”,; Energy Institute, “Statistical Review of World Energy”; Various sources, “Population”,

3 United Nations, World Population Prospects (2022) – processed by Our World in Data. “Population”, United Nations, World Population Prospects (2022) [original data].

5 U.S. Energy Information Administration (2023); Energy Institute - Statistical Review of World Energy (2023) – with major processing by Our World in Data. “Primary energy consumption”, U.S. Energy Information Administration, “International Energy Data”; Energy Institute, “Statistical Review of World Energy” [original data].



Infrastructure Capital Advisors, LLC (ICA) is an SEC-registered investment advisor that manages exchange traded funds (ETFs) and a series of hedge funds. The firm was formed in 2012 and is based in New York City. ICA seeks current income opportunities as a primary objective in most, but not all, of ICA's investing activities.


This material is for informational purposes only. This is not an offer to buy or sell, or a solicitation of any offer to buy or sell any of the securities mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third-party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. The information herein represents the opinion of the author(s), but not necessarily those of ICA, or its affiliates. Not for distribution to the public. Opinions represented above are subject to change and should not be considered investment advice. Past performance is not indicative of future results. The links to the fund fact sheets will provide standardized performance and risk disclosures. *30-day SEC Yield is a standardized yield calculated according to a formula set by the SEC and is subject to change.


AMZA Exchange Traded Funds (ETF): The value of an ETF may be more volatile than the underlying portfolio of securities it is designed to track. The costs to the portfolio of owning shares of an ETF may exceed the cost of investing directly in the underlying securities. Master Limited Partnerships: Investments in MLPs may be adversely impacted by interest rates, tax law changes, regulation, or factors affecting underlying assets. Energy Industry Concentration: The portfolio’s investments are concentrated in the energy industry and presents greater risks than if the portfolio was broadly diversified over numerous sectors of the economy. Leverage: When the Fund leverages its portfolio, the Fund may be less liquid and/or may liquidate positions at an unfavorable time, and the value of the Fund’s shares will be more volatile and sensitive to market movements. Options: Selling call options may limit the opportunity to profit from the increase in price of the underlying asset. Selling put options risks loss if the option is exercised while the price of the underlying asset is rising. Buying options risks loss of the premium paid for those options. Market Price/NAV: At the time of purchase and/or sale, an investor’s shares may have a market price that is above or below the fund’s NAV, which may increase the investor’s risk of loss. Market Volatility: The value of the securities in the portfolio may go up or down in response to the prospects of individual companies and/or general economic conditions. Local, regional, or global events such as war or military conflict, terrorism, pandemic, or recession could impact the portfolio, including hampering the ability of the portfolio’s manager(s) to invest its assets as intended. Prospectus: For additional information on risks, please see the fund’s prospectus.

You should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. AMZA is distributed by VP Distributors LLC, call 1-888-383-4184 or visit to obtain a prospectus which contains this and other information about the Fund. The prospectus should be read carefully before investing.

Virtus ETF Advisers, LLC serves as the investment advisor and Infrastructure Capital Advisors, LLC serves as the subadviser to PFFA, PFFR and AMZA. These three funds are distributed by VP Distributors, LLC, member FINRA and subsidiary of Virtus Investment Partners, Inc.

Past performance is not indicative of future results.

The links to the fund fact sheets will provide standardized performance and risk disclosures.

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