Fossil Fuels Are Heading Down, But Not Yet Out

Fossil Fuels Are Heading Down, But Not Yet Out

Taking no chances: Flower power backs up wind energy. Image: By Gustavo Quepón on Unsplash

Renewable energy is making rapid inroads into the market, but fossil fuels still wield enormous global influence.

At a casual glance, you could be forgiven for thinking that fossil fuels are here to stay for a long time yet, although not everything on the horizon is rosy.

The world, admittedly, is awash with surplus oil. The use of coal is in sharp decline. The price of gas – in recent years the fuel of choice for an increasing number of power plants around the globe – is falling.

The fossil fuel industry – the main driver behind the growing climate crisis – is undoubtedly going through one of its worst times in decades.

The Covid 19 pandemic has resulted in a severe downturn in the global economy and a sharp drop in demand for energy.

But the fossil fuel industry’s problems, many of them of its own making, were evident well before Covid swept the globe.

At the centre of the sector’s difficulties is over-production, particularly of oil.

Shale tips the scales

In 2010 world crude oil production was running at about 86 million barrels per day (MBPD). This year production is forecast to top 100 MBPD.

Though oil consumption has grown as the global economy has expanded over recent years, production has exceeded demand as utilities and industries, particularly in Europe, China, Japan and South Korea, have become ever more efficient in the way they produce energy.

The big change in the oil market over the past decade has been the rise in US production, brought about by the boom in the shale oil and gas industry.

In 2010 the US was producing just over 5 MBPD. Earlier this year, production was running at more than 13 MBPD. Once a net importer of crude, the US is now the world’s biggest producer – ahead of Saudi Arabia and Russia.

The days when the Organization of the Petroleum Exporting Countries (OPEC) could more or less determine the global oil price by tweaking production levels have long gone: neither the US nor Russia is an OPEC member.

The big producers have argued amongst themselves and have not been able to agree on output levels. Oil prices have fluctuated wildly: in recent weeks they reached an historic low.

“Renewable energy is a cost-effective source of new power that insulates power markets and consumers from volatility”

In the US many shale oil operators who borrowed heavily to fund their operations are threatened with going bust as the price of oil falls well below production costs.

In Saudi Arabia and Russia the dramatic fall in oil revenues is threatening economic crisis – and potential political trouble as well.

Adding further to the problems of the oil and other fossil fuel producers – but at the same time contributing to the well being of the planet – has been the rise of the renewable energy industry.

In 2010 the share of renewables in the global energy mix was 8.6%. Data from the International Renewable Energy Agency (IRENA) indicate that renewables now account for more than 30% of the world’s power supply.

Massive solar and wind operations are being built around the world. Solar heating systems have been installed in millions of homes.

Concerns over a warming world and new regulations governing emissions of climate-changing greenhouse gases have in part driven the rise of renewables; dramatic falls in the price of technologies such as wind and solar have also had a big impact.

Holding on to power

The cost of producing electricity from solar power has dropped by about 80% over the past decade. The cost of wind power and other renewables has also dropped.

“Renewable energy is a cost-effective source of new power that insulates power markets and consumers from volatility”, says IRENA.

The fossil fuel sector is still able to wield immense financial and political clout and those prophesying its demise are likely to be disappointed, in the short term at least.

In the US it looks as though coal, oil and gas companies will qualify for multi-billion dollar payments under revised federal government Covid-19 bailout measures.

The Saudis and the Russians will do everything in their power to protect their fossil fuel industries on which their economies – and power structures – depend.

But big changes are under way. Maybe, just maybe, fossil fuels are in terminal decline. – Climate News Network

About the Author

cooke kieran

Kieran Cooke is co-editor of the Climate News Network. He is a former BBC and Financial Times correspondent in Ireland and Southeast Asia., http://www.climatenewsnetwork.net/

This Article Originally Appeared On Climate News Network

books_solution

enafarzh-CNzh-TWdanltlfifrdeiwhihuiditjakomsnofaplptruesswsvthtrukurvi

follow InnerSelf on

facebook-icontwitter-iconrss-icon

 Get The Latest By Email

{emailcloak=off}

LATEST VIDEOS

Methane Emissions Hit Record Breaking Levels
Methane Emissions Hit Record Breaking Levels
by Josie Garthwaite
Global emissions of methane have reached the highest levels on record, research shows.
kelp forrest 7 12
How The Forests Of The World’s Oceans Contribute To Alleviating The Climate Crisis
by Emma Bryce
Researchers are looking to kelp for help storing carbon dioxide far beneath the surface of the sea.
Tiny Plankton Drive Processes In The Ocean That Capture Twice As Much Carbon As Scientists Thought
Tiny Plankton Drive Processes In The Ocean That Capture Twice As Much Carbon As Scientists Thought
by Ken Buesseler
The ocean plays a major role in the global carbon cycle. The driving force comes from tiny plankton that produce…
Climate Change Threatens Drinking Water Quality Across The Great Lakes
Climate Change Threatens Drinking Water Quality Across The Great Lakes
by Gabriel Filippelli and Joseph D. Ortiz
“Do Not Drink/Do Not Boil” is not what anyone wants to hear about their city’s tap water. But the combined effects of…
Talking About Energy Change Could Break The Climate impasse
Talking About Energy Change Could Break The Climate Impasse
by InnerSelf Staff
Everyone has energy stories, whether they’re about a relative working on an oil rig, a parent teaching a child to turn…
Crops Could Face Double Trouble From Insects And A Warming Climate
Crops Could Face Double Trouble From Insects And A Warming Climate
by Gregg Howe and Nathan Havko
For millennia, insects and the plants they feed on have been engaged in a co-evolutionary battle: to eat or not be…
To Reach Zero Emissions Government Must Address Hurdles Putting People Off Electric Cars
To Reach Zero Emissions Government Must Address Hurdles Putting People Off Electric Cars
by Swapnesh Masrani
Ambitious targets have been set by the UK and Scottish governments to become net-zero carbon economies by 2050 and 2045…
Spring Is Arriving Earlier Across The US, And That's Not Always Good News
Spring Is Arriving Earlier Across The US, And That's Not Always Good News
by Theresa Crimmins
Across much of the United States, a warming climate has advanced the arrival of spring. This year is no exception.

LATEST ARTICLES

Routine Gas Flaring Is Wasteful, Polluting And Undermeasured
Routine Gas Flaring Is Wasteful, Polluting And Undermeasured
by Gunnar W. Schade
If you’ve driven through an area where companies extract oil and gas from shale formations, you’ve probably seen flames…
Flight Shaming: How To Spread The Campaign That Made Swedes Give Up Flying For Good
Flight Shaming: How To Spread The Campaign That Made Swedes Give Up Flying For Good
by Avit K Bhowmik
Europe’s major airlines are likely to see their turnover drop by 50% in 2020 as a result of the COVID-19 pandemic,…
Will The Climate Warm As Much As Feared By Some?
Will The Climate Warm As Much As Feared By Some?
by Steven Sherwood et al
We know the climate changes as greenhouse gas concentrations rise, but the exact amount of expected warming remains…
How To Make Floating Wind Farms The Future Of Green Electricity
How To Make Floating Wind Farms The Future Of Green Electricity
by Susan Gourvenec
Since 2010, wind energy has seen sustained growth worldwide, with the amount of energy generated by offshore wind…
What If We Took All Farm Animals Off The Land And Planted Crops And Trees Instead?
What If We Took All Farm Animals Off The Land And Planted Crops And Trees Instead?
by Sebastian Leuzinger
I would like to know how much difference we could make to our commitment under the Paris Agreement and our total…
Methane Emissions Hit Record Breaking Levels
Methane Emissions Hit Record Breaking Levels
by Josie Garthwaite
Global emissions of methane have reached the highest levels on record, research shows.
How Banks Are Trying To Capture The Green Transition
How Banks Are Trying To Capture The Green Transition
by Tomaso Ferrand,and Daniel Tischer
Private sector banks in the UK should have a central role in financing climate action and supporting a just transition…
To Build A Better Canada After COVID-19 Launch A Fossil-free Future
To Build A Better World After COVID-19 Launch A Fossil-Free Future
by Kyla Tienhaara et al
Demand for fossil fuels collapsed during the COVID-19 pandemic as lockdown measures were introduced. In the second…