Market Dynamics of the Green Revolution
There are ~9,000 independent oil & natural gas producers in the Untied States. While there are extremely large players like ExxonMobil, BP, Shell, Etc. there is also ample opportunity for smaller players to exist.

I think this is relevant when forecasting the market dynamics of the green revolution. There won't be 9,000 different companies producing solar panels or even 90 different companies producing heat pumps. We are looking at much more consolidated markets. For every $1 spent on energy today there is some portion of profits trickling down to smaller players in the oil and gas industry but if the world successfully transitions away from oil & gas the same $1 spent on energy will be distributed amongst a smaller and more consolidated profit pool.

Some may debate the actual monetary savings or efficiency of green infrastructure but that's really beside the point. Whether it is through social influence, government subsidies, tax incentives, or building code requirements, the transition is going to happen.

This is not to sound like a conspiracy theory but it's evident there is a concerted effort among prominent investors for the world to make the transition. It is not so much a passing of the torch from the oil & gas industry to green solutions but more like a snatching of the torch from a green energy coalition. Just look at the board & investors for Break Through Energy Ventures. Titans of industry working together to fund solutions that align with new ESG mandates and environmental standards, I wouldn't bet against their success.

I think it's possible investors are underestimating the sheer scale of this movement. We are still in the early innings of a multidecade secular trend of adoption. It took me until this very moment to appreciate that the energy companies of tomorrow may actually enjoy more favorable market dynamics than the energy companies of the past.
AverageInvestor's avatar
A question I’ve been wondering is what evidence is there that the current major players in the energy industry won’t be the major players with green energy? Wouldn’t they have an advantage due to adopt, scale and deploy new technologies?
Pat Connolly's avatar
@averageinvestor yeah I have seen some stuff that large oil companies are some of the largest investors in renewable technologies. So maybe they remain solid investments despite the transition away from fossil fuels. It’s not like we can eliminate oil completely, we need oil for so aspects of daily life that doesn’t include driving or heating your home.
Ian MacLean's avatar
@pat_connolly yeah, this is their baby. “Carbon footprint” is BP’s term.
Tyler P's avatar
The “revolution” does seem to have picked up from a snails pace within the last year or two and the conspiracy part of my brain starts to itch like you’re alluding to as well. I think all of this mega-mega-billionaires looked around and decided they were going to lose x% of their fortunes if they did not lead the way on renewables.
Tyler P's avatar
And to your point about the concentration of the renewable market, there’s no doubt that’s true today and for the foreseeable future. But new players will emerge over time as innovation continues and technology drives prices down further.
Pat Connolly's avatar
@tpellom yeah the acceleration part of it is what interests me most. Once the train leaves the station there’s no going back