Exxon and Chevron are investing heavily in fossil fuel energy through major acquisitions.

• On Monday, Hess was acquired by Chevron for $53 billion in stock.
• Recently, Exxon Mobil announced the acquisition of Pioneer Natural Resources for $59.5 billion in stock.
• Larry J. Goldstein, a former president of the Petroleum Industry Research Foundation, stated in a phone conversation with CNBC on Monday that large nongovernment companies do not anticipate an end to oil demand in the near future.

On Monday, announced plans to acquire oil and gas company for $53 billion in stock.

Less than two weeks ago, it was announced that the company would be acquiring an oil company for $59.5 billion in stock.

The International Energy Agency's annual world energy outlook report, released on Tuesday, predicts that global demand for coal, oil, and natural gas will reach an all-time high by 2030, a forecast that IEA's executive director Fatih Birol had previously announced in September.

The shift to clean energy is occurring globally and is inevitable. It is not a matter of if, but rather how quickly it happens, with the sooner being better for everyone. According to Birol, the ongoing instability in traditional energy markets makes oil and gas seem less safe and secure as options for the world's energy and climate future.

Based on their purchases, Chevron and Exxon appear to be preparing for a future that differs from the IEA's predictions.

According to Larry J. Goldstein, a former president of the Petroleum Industry Research Foundation and a trustee with the not-for-profit Energy Policy Research Foundation, large nongovernment companies do not anticipate an end to oil demand in the near future. They are dedicated to the industry, production, reserves, and spending.

According to Goldstein, the big oil companies believe that oil demand will continue to exist in large volumes for at least the next 20 to 25 years, while governments around the world see a decline in oil demand in the near term.

According to Ben Cahill, a senior fellow in the energy security and climate change program at the Center for Strategic and International Studies, the same sentiment applies.

Global oil consumption is currently close to its highest level, and there is ongoing debate about when 'peak demand' will occur. However, major oil and gas producers in the US view a future with sustained oil demand, according to Cahill, who spoke to CNBC.

Africa, Asia driving demand

The global investment in clean energy is expected to reach $1.7 trillion by 2023, according to a prediction from the IEA in May.

The IEA stated that the remaining amount, which is more than $1 trillion, will be invested in fossil fuels, including coal, gas, and oil.

The continued demand for oil and gas, despite the growing momentum in clean energy, is due to population growth worldwide, particularly in Africa, Asia, and to some extent Latin America, as populations "ascend the socioeconomic ladder," according to Shon Hiatt, director of the Business of Energy Transition Initiative at the USC Marshall School of Business.

In contrast to constructing new clean energy systems, oil and gas are inexpensive and simple to transport.

According to Hiatt, these companies view the long-term viability of the oil and gas industry because hydrocarbons are the most cost-effective, easily transportable, and storable energy source. Their strategy suggests that in emerging economies with population and economic growth, the adoption of low-carbon energy sources may be too expensive, while hydrocarbon demand in European and North American markets, although reduced, will still be a significant factor.

Although electric vehicles are gaining traction, they represent only a portion of the transportation industry, and many other sectors will continue to rely on fossil fuels, according to Marianne Kah, a senior research scholar and board member at Columbia University's Center on Global Energy Policy. Kah, who was previously the chief economist of ConocoPhillips for 25 years, emphasized the importance of considering the entire transportation sector when discussing energy policy.

Despite the growing focus on electric passenger vehicles in the media, global oil demand is predicted to increase in various sectors such as petrochemicals, aviation, and heavy-duty trucking, according to Kah's statement to CNBC.

Geopolitical pressures also play a role.

European oil and gas majors are facing stricter emissions regulations, prompting Exxon and Chevron to expand their holdings in the region. In contrast, the U.S. is unlikely to impose the same level of stringent regulations on oil and gas companies domestically.

Hiatt stated on CNBC that it is possible that Exxon and Chevron are expecting European oil majors to sell off their worldwide reserves within the next ten years as a result of policy changes in Europe.

According to Amy Myers Jaffe, a research professor at New York University and director of the Energy, Climate Justice and Sustainability Lab at NYU's School of Professional Studies, there is a belief that domestic politics will prevent the U.S. from implementing significant new climate policies aimed at limiting or banning domestic oil and gas production.

Goldstein predicts that the growing U.S. national debt will lead to the elimination of government subsidies, which will positively impact companies like Exxon and Chevron.

Goldstein stated that all subsidies will face immense pressure, with the intensity of that pressure varying depending on which party is in the White House at any given time. He added that this means larger financial oil companies will be better equipped to handle that environment than smaller companies.

Jaffe stated that sanctions on state-owned oil and gas companies in countries such as Russia, Venezuela, and Iran are giving Exxon and Chevron a geopolitical opportunity.

Jaffe stated to CNBC that they expect any geopolitically-driven market shortfalls to be filled by their own production, even if global demand for oil is reduced through decarbonization policies. He compared the situation to a game of musical chairs, where Exxon Mobil and Chevron are betting that other countries will fall out of the game, leaving enough chairs for the American firms to sit down.

Oil that can be tapped quickly is a priority

As European and American governments aim to limit the exploration of new oil and gas reserves, the value of known reserves is on the rise, according to Hiatt.

Hiatt stated to CNBC that both Pioneer and Hess have significant oil and gas reserves that could provide Exxon and Chevron with opportunities for expansion and diversification.

When there is uncertainty about the pace of the energy transition, oil and gas reserves that can be brought to market quickly are the ideal candidates for production, according to Kah. This is why Exxon acquired Pioneer, which gave Exxon more access to "tight oil" in the Permian basin.

Shale is a porous rock that can hold natural gas and oil, and it is accessed through hydraulic fracking, which involves shooting water mixed with sand into the ground to release the fossil fuel reserves. According to Jaffe, hydrocarbon reserves found in shale can be brought to market within six months to a year, while exploring for new reserves in offshore deep water can take five to seven years to tap.

Jaffe stated that Chevron and Exxon Mobil are aiming to reduce costs and minimize execution risk by increasing the percentage of short cycle U.S. shale reserves in their portfolios. Having easily accessible reserves allows oil and gas companies to be more agile in responding to fluctuations in oil and gas prices. Jaffe emphasized the appeal of this flexibility in the current volatile market climate.

Chevron's acquisition of Hess grants Chevron access to Guyana, a South American country with low-cost, prolific production, as stated by Jaffe.