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

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.
The Last Ice Age Tells Us Why We Need To Care About A 2℃ Change In Temperature
The Last Ice Age Tells Us Why We Need To Care About A 2℃ Change In Temperature
by Alan N Williams, et al
The latest report from the Intergovernmental Panel on Climate Change (IPCC) states that without a substantial decrease…
A Georgia Town Gets Half Of Its Electricity From President Jimmy Carter's Solar Farm
A Georgia Town Gets Half Of Its Electricity From President Jimmy Carter's Solar Farm
by Johnna Crider
Plains, Georgia, is a small town that is just south of Columbus, Macon, and Atlanta and north of Albany. It is the…
Majority of US Adults Believe Climate Change Is Most Important Issue Today
by American Psychological Association
As the effects of climate change become more evident, more than half of U.S. adults (56%) say climate change is the…
How These Three Financial Firms Could Change The Direction Of The Climate Crisis
How These Three Financial Firms Could Change The Direction Of The Climate Crisis
by Mangulina Jan Fichtner, et al
A silent revolution is happening in investing. It is a paradigm shift that will have a profound impact on corporations,…

LATEST ARTICLES

Heatwaves Too Hot And Wet For Human Life Are Here
Heatwaves Too Hot And Wet For Human Life Are Here Now
by Tim Radford
Lethal heatwaves carrying air turned too hot and wet to survive are a threat which has arrived, thanks to climate…
How Dangerous Is Low-level Radiation To Children?
How Dangerous Is Low-level Radiation To Children?
by Paul Brown
A rethink on the risks of low-level radiation would imperil the nuclear industry’s future − perhaps why there’s never…
What We Do Now Could Change Earth's Trajectory
What We Do Now Could Change Earth's Trajectory
by Pep Canadell, et al
The numbers of people cycling and walking in public spaces during COVID-19 has skyrocketed.
Marine Heatwaves Spell Trouble For Tropical Reef Fish — Even Before Corals Die
Marine Heatwaves Spell Trouble For Tropical Reef Fish — Even Before Corals Die
by Jennifer M.T. Magel and Julia K. Baum
Despite the many challenges facing the world’s oceans today, coral reefs remain strongholds of marine biodiversity.
Warnings of Worse-Than-Usual Hurricane Season Point to Trouble Ahead
Warnings of Worse-Than-Usual Hurricane Season Point to Trouble Ahead
by Eoin Higgins
Hurricane season is about to start and its risks will only grow and potentially compound any impacts from the pandemic.
Australia, It's Time To Talk About Our Water Emergency
Australia, It's Time To Talk About Our Water Emergency
by Quentin Grafton et al
There’s another climate change influence we must also face up to: increasingly scarce water on our continent.
Fossil Fuels Are Heading Down, But Not Yet Out
Fossil Fuels Are Heading Down, But Not Yet Out
by Kieran Cooke
Renewable energy is making rapid inroads into the market, but fossil fuels still wield enormous global influence.
Human Action Will Decide How Much Sea Levels Rise
Human Action Will Decide How Much Sea Levels Rise
by Tim Radford
Sea levels will go on rising, because of human action. By how much, though, depends on what humans do next.