As the world braces for a seemingly inevitable recession, commodities have been hit hard. Oil, copper and iron ore prices have fallen sharply from highs hit earlier this year. This is not surprising since the demand for raw materials tends to move in line with economic activity.

Despite the energy crisis caused by Russia’s invasion of Ukraine, many investors fear that demand for hydrocarbons will be limited in the coming years. Oil giant BP says that if governments want to achieve net zero emissions by 2050, the share of fossil fuels in final energy consumption should drop to 20% from 65% today. The prospect of such a steep downturn is making energy companies reluctant to invest in capital-intensive projects with decades of payback. Canadian scientist Vaclav Smil dismisses the idea that the world is on the verge of abandoning fossil fuels. Hydrocarbons are not only used for transportation and heating, but are also an important input into the production of what he calls the “four pillars of civilization”: steel, concrete, plastic and ammonia (for fertilizer). It is unlikely that these industries will stop being dependent on fossil fuels in the coming decades, especially in low-income countries with huge infrastructure needs, Smil said.

“We still do not know most of the details of this coming transition,” he writes, “but one thing is certain: it will not be a sudden phase out of coal, not even its rapid disappearance, but rather its gradual elimination.” And Adam Rozenswag, managing director of natural resource investment firm Goehring and Rozencwajg, notes that renewables require huge upfront costs, consuming large amounts of conventional energy and raw materials. It takes several years to recoup the energy expended on building their infrastructure.

However, investors don’t need to spend too much time fixating on future demand. Energy groups’ capital expenditures have declined since the peak of the investment boom in the middle of the last decade. Conventional oil production has not increased since the collapse of Lehman Brothers in 2008. Instead, the gradual increase in demand for “black gold” was largely offset by the increase in US shale oil production.