“Russia could be left with almost $2 trillion in worthless hydrocarbon assets if major economies hit their net zero targets over the coming decades,” reports the Moscow Times. A report published in the journal Nature showed that “more than half of Russia’s estimated $3.9 trillion stock of fossil fuel assets — such as oil and gas rigs, pipelines, extraction facilities and other infrastructure to support the country’s vital energy sector — would become “stranded,” or effectively worth nothing, by 2036.”

“The paper also said the Russian government could lose around 40% of its lucrative oil and gas revenues by 2030 — proceeds which have accounted for around 40% of the total national budget in recent years. That loss would be second in scope only to Canada. Employment could also drop by almost 4% by the end of the decade as demand for Russia’s hydrocarbons falls and the industry dwindles.”

“Globally, energy importers such as the EU, China, India, Japan, South Korea and Africa stand to be big winners, with their economies gaining by more than 10% in some cases. But energy heavyweights such as Russia, the U.S., Saudi Arabia, Norway and Canada would be left with a combined $11-14 trillion of worthless hydrocarbon infrastructure.” Fortunately, for countries like the US and Canada, most of the worthless infrastructure is in the hands of private investors, and a decline in the oil industry will create long term savings for the Federal Government by minimizing future environmental cleanup costs, and new revenue growth from a rapidly expanding renewable energy industry.

News of Russia potentially running out of time to sell off their oil assets may lead to lower gas prices in the near term as well, as OPEC+ nations start cheating on their production quotas as they try to maximize revenue from their petroleum reserves before the opportunity to do so runs out. At this point, hybrid and electric vehicle technology is progressing rapidly enough in the United States that a sharp spike in oil and gas prices will likely result in changes in consumer habits, with growing numbers of Americans ditching their giant pickup trucks and SUVs in favor of smaller cross-over models and sedans. A spike in energy prices in the US may also spark additional growth in residential solar and small-wind installations, ultimately accelerating the process that will lead to oil and natural gas resources becoming stranded.