During the COVID-19 pandemic, dwindling demand for oil resulted in drastic decreases in production. As a result, oil companies began shutting down wells and laying off employees. However, as the pandemic entered a new stage with the introduction of vaccines, demand for oil across the globe surged – but with a decreased labor force and inactive wells, oil companies have been slow to catch up with the rapid demand for gasoline. Combined with the attack on Ukraine, interruptions of Russian oil shipments, and US import bans on Russia (who supplies 12% of the world’s oil) global oil prices have risen nearly 65% since the beginning of 2022.

Amongst the current situation, two sides of discussion have emerged within the energy sector:

“Energy security should take precedence over clean energy transitions”

Fossil fuel proponents, including many oil and gas producing countries, argue that now is the time for greater investment in oil and gas. Supporters are highlighting several reasons for expansion of the fossil fuel industry, including:

• Transition away from fossil-fuel energy would cause energy prices to become too high for millions around the world
• The energy transition will take time and in that period, the world will need more oil and gas – the world needs to be pragmatic about ‘near term goals’
• Oil and gas and climate action are not mutually exclusive. Oil and gas will remain as part of the overall energy mix, and investments must continue in the oil and gas front

“Without energy security, countries will lose the means to tackle climate change,”
– Prince Abdulaziz bin Salman, Saudi Arabia’s Energy Minister

“We cannot and  we must not unplug the current energy system before we have built the new one”
– Sultan al-Jaber, UAE’s special envoy for climate change and managing director of Abu Dhab’s  state-owned oil company

“We cannot afford to continue using fossil fuels” 

Climate scientists and activists are calling the current global crisis an opportunity to ignite true reform within the energy sector, and push back against increased investments in fossil fuels to stay within the 1.5°C limit set to mitigate catastrophic climate consequences. With Russia being the world’s second top producer of crude oil and supplier of approximately ⅓ of  Europe’s oil, European governments have been prompted to reappraise their energy supplies, and consider clean energy sources and increased efficiency to decrease dependence on fossil fuels for environmental and geopolitical reasons

“There is now significant evidence to show that hydrocarbons are not just environmentally unsustainable, but that they weaken the social, political and economic fabric of our world too,” 

• David Blood, Co-Chair, World Resources Institute Global Board of Directors.

Without transition to clean energy, the devastating impacts of climate change such as increased frequency of extreme weather events and forest fires, rising global food insecurity, and biodiversity extinction will continue to have vast impacts on society and the planet. According to the Unextractable Fossil Fuels in a 1.5°C World, released in September 2021, 60% of oil and gas and 90% of coal reserves around the worst must remain underground and unutilized to have a 50% chance of preventing the worst impacts of climate change. Additionally, the report also estimates that global oil and gas production must decline by 3% annually until 2050.

What’s happening now?
Indeed, some countries may be placing greater priority on energy security over clean energy goals due to the Russian invasion. For instance, China plans to recover and stabilize oil output to 200 million tons a year by 2025, a 5% increase from 2018 and is targeting production of 230 billion cubic meters of gas by 2025, a 19% increase from 2020. In Australia, emission reduction efforts such as early closure of coal plants, may be decreasingly prioritized as the government emphasizes the country’s need for energy security and lower energy costs.  

In Europe, Germany plans on building two liquefied natural gas (LNG) terminals supplied by Qatar to replace imports from Russia. Government in Munich has also decided to extend the life of one of the city’s coal-fired power plants, which was previously planned for conversion to burn natural gas in spring 2023. Additionally, UK prime minister Boris Johnson made headlines for hinting at potential UK reliance on Saudi Arabia to speed up oil production for the country – a move criticized for feigning ignorance to Saudi Arabia’s record of human rights abuse. 

At the same time, the European Commission has announced an ambitious plan to reduce reliance on Russian gas by two-thirds by the end of 2022 and abolish all Russian fossil fields by 2030. The EC’s plan would prioritize installation of solar panels as well as divert LNG supplies from non-Russian sources. Despite the plan to build two LNG terminals, Germany has also set out an agenda to generate 100% of its energy production from renewable sources by 2035. Moreover, the Netherlands aims to double its planned offshore wind capacity by 2030, while France is increasing its support for renewable energy heating. 

The Bottom line

The current shift in oil and gas demand has led to arguments and action towards short-term solutions that address pressing energy security challenges. Although these challenges are of real concern and cause significant disadvantages for large portions of the global population, continued reliance on fossil fuels is an unsustainable strategy – especially with its well-known environmental, and rising geopolitical and ethical concerns.  With renewable energy technology becoming increasingly inexpensive, clean energy methods can serve as a protector against the multifaceted concerns and consequences of the fossil fuel industry; and the pressure of the climate emergency intertwined with recent energy crises only demonstrates how transitions to clean energy systems are critical now more than ever before.

While there is a lot to be excited about and while accelerating the transition to renewable energy is still an urgent priority, we have to also keep in mind the valid concerns related to renewable energy – check out a related post: Exploring Concerns About Renewable Energy.

This post is a part of our ongoing #Energy101 social media series. We create accompanying blog posts alongside our social media posts for accessibility, to provide additional information, and to link our sources. Check out the series on Instagram @studentenergy, and on Facebook, Twitter, and LinkedIn.

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Myth 1: Renewable energy is too expensive

Why this is false: The cost of renewable energy has dropped in price in the last 10 years, with the price of solar alone falling 89% in a decade. Prices have fallen so low, quickly, that on-shore wind turbines and large-scale solar power are often cheaper or comparable to conventional fossil fuel and non-renewable sources – and that is largely without the subsidies and incentives that the fossil fuel industry has received for decades.

Did you know?

 According to a 2020 report by IRENA, renewables are now the cheapest sources of electricity globally. This milestone presents countries that are heavily reliant on coal as a cheap source of power to increase the pace of their transition while reducing electricity costs and meeting energy needs.

Myth 2: Renewable energy can’t deliver when there isn’t sunshine or wind, making the grid unreliable

Why this is false: Yes, solar and wind energy are intermittent – but this doesn’t necessarily have to make the energy grid unreliable. Even with fossil fuel sources, electricity grids must be designed to manage variability and maintain a balance between generation and demand. Here are some ways to manage intermittency:

1. Using a diverse combination of renewable energy sources so that one can step in for another when needed
2. Advances in energy storage — battery storage technology is improving, and costs for some technologies like lithium-ion batteries have declined by almost 90% in the past decade
3. Demand flexibility and smart demand response strategies could help eliminate steep rise and falls in energy demand throughout the course of a day and help balance supply and demand  

Energy 101 terminology: How are overall costs of electricity generation from different sources compared? Using a measure called the levelized cost of electricity or LCOE. Lazard and the Energy Information Administration are two reliable sources that make this data available.

Myth 3: Transitioning from fossil fuels to clean energy will result in job losses

Why this is false: IRENA estimates global jobs in renewable energy are expected to reach 42 million by 2050, more than triple the current level, while policies advocating for energy efficiency can generate millions of additional jobs. Although there can be a net positive increase of jobs, there may also be a loss of 5 million jobs in the fossil fuel sector, which underscores a need for a just transition that ensures that new clean energy opportunities are available in the right places and accessible to those employed in the current energy sector.

The Brookings institute also found that in the United States, “workers in clean energy earn higher and more equitable wages when compared to all workers nationally”

Did you know?

According to a recent report by the African Development Bank (AFDB) and IRENA, an “integrated policy framework” built around the energy transition could unlock Africa’s vast potential, opening new sustainable energy investments and growing its economy by 6.5% by 2050. The solar sector alone could also employ 3.3 million Africans by 2050.

Sources

1. https://www.weforum.org/agenda/2021/03/renewable-energy-myths-debunked/
2. https://yaleclimateconnections.org/2019/02/3-clean-energy-myths-debunked/
3. https://www.theverge.com/22858437/2021-mining-critical-minerals-clean-energy-renewables-climate-change
4. https://www.weforum.org/agenda/2021/07/renewables-cheapest-energy-source/
5. https://www.nationalobserver.com/2021/12/21/opinion/busting-three-renewable-energy-and-grid-myths