Analysis: Global Energy Addition Masks Local Fuel Substitution

A historical analysis of energy transitions suggests global fossil fuel demand can rise even as clean energy gains ground, but this aggregate view masks significant substitution already occurring in critical sectors like electricity and transport, according to a report from OilPrice.com. For Bakken operators, the analysis underscores a landscape where near-term demand resilience may coexist with long-term market risks as specific fuel markets transform.

The report, published Thursday, examines an argument by historian Jean-Baptiste Fressoz that energy sources historically accumulate rather than replace one another. Global primary energy charts appear to support this, showing fossil fuel use near record levels despite massive clean-energy investment. However, energy analyst Michael Liebreich's rebuttal, cited in the report, argues this global aggregation hides crucial local and sectoral substitution.

Technologies compete for specific services and markets, not in a single "energy" bucket, the report states. Replacement becomes visible first in sales, then installed equipment, fuel demand, and finally in the global aggregate. "By the time the last chart turns downward, the transition may already be irreversible," according to the OilPrice.com analysis.

The power sector provides a clear example of this crossover effect, not mere addition. In the European Union, wind and solar produced 30.1% of electricity in 2025, compared with 29% from all fossil sources combined. A decade earlier, fossil generation was almost three times the output of wind and solar. For Bakken crude, which competes in a global market, such shifts in major demand centers like Europe can influence long-term export dynamics even if worldwide oil consumption figures remain stable.

The transportation sector demonstrates why transitions are easily underestimated, the report notes. Global sales of internal combustion engine cars peaked in 2017 and had fallen by 2024. This follows a historical pattern where new technology captures sales long before the old installed base disappears, similar to how mobile phones debuted in 1973 but global landline subscriptions rose until 2006.

For North Dakota's oil industry, the analysis suggests monitoring specific product markets and regional demand trends may be more informative than top-line global consumption figures. The Bakken's economic future may hinge less on whether fossil fuels are entirely replaced and more on how quickly key sectors like gasoline-powered personal transport or European power generation are substituted, potentially shrinking the premium markets for its light, sweet crude.