The diminishing relevance of oil in global energy markets (II)

The China National Offshore Oil Corporation (CNOOC), in June 2020, signed a joint agreement with Shell to supply Shell’s maiden carbon-neutral liquefied natural gas inbound cargoes. In the same vein, ExxonMobil, in December 2020, announced its ambition to decarbonise its processes and to reduce the intensity of its operated upstream greenhouse gas emissions by 15–20 percent over the next five years.

Although fossil fuel sources account for about 80 percent of global energy production, thus making about six billion people dependent on fossil-generated energy worldwide, these unhealthy fuel resources, however, are known to be the largest contributors to global climate change and account for up to 75 percent of global greenhouse emissions and almost 90 percent of all CO2 emissions. Large volumes of expelled greenhouse gases blanket the earth and traps solar heat in the process of producing energy and electricity when fossil fuels are burned.

As the atmospheric concentration of these greenhouse gases increase, a warming effect is initiated and the result is various climate-related incidences that the world suffers year in, year out. Between 1990 and 2019, total warming effect through greenhouse emissions provoked by increasing fossil fuel-related human activities increased by 45 percent.

In recent times, international bodies and governments have continued to wax stronger in their bid to explore alternative energy programmes and cut emissions by 50 percent in 2030 and achieve a net-zero status by 2050. With this in sight, it is believed that human, animal and plant existence will be better preserved and the earth will become a more habitable ether for all. Indeed, scientific exploration about how renewable energy practice may contribute towards more liveable earth continues to abound and greener solutions to the current fossil-created cataclysm are continually tested.

In Germany, for instance, fuel-driven vehicle use is being discouraged through a 9 euro transit ticket experiment. The new scheme offered very cheap tickets for all local trains, buses, metros and trams for three months. Over 52 million sold tickets resulted in 1.8 million tonnes of CO2 emissions saved, and the cost-of-living crisis in the country is observed to fall drastically, following the alternative transport scheme experiment.

Also, the state of California in the USA is banning the sale of petrol-only vehicles from 2035. This move is set to help the country at large to fully transition into electric car use in order to achieve the target of reducing greenhouse gas emissions and pollution. The state targets that by 2026, 35 percent of new vehicles used across the state must be fully electric, hybrid or hydrogen-powered.

Read also: The diminishing relevance of oil in global energy markets (I)

France is reported to commit to paying car drivers in low-income communities up to 4,000 euros to switch to electric bikes in order to reduce greenhouse emissions and pollution due to carbon-driven vehicles. The country hopes that by 2024, up to 9 percent of the country will use electric bikes for their daily trips. In South Africa, a boost in the solar panel industry is gradually driving down the need for carbon-driven energy sources. For a country that is reputed to be Africa’s biggest emitter of CO2 who generates up to 86 percent of their energy from coal, South Africa hopes that the increasing adoption of solar-generated energy sources by homes and businesses will help the country achieve a net-zero status by 2050.

Certainly, renewable energy sources are now being eyed as the new energy messiah. They are more affordable, healthier and growth-enhancing. The World Health Organization (WHO) reports that about 99 percent of people in the world breathe bad air, causing over 13 million deaths per year. Consequently, the health and economic costs of air pollution have been rising. In 2018 alone, WHO reported that health expenses owing to air pollution cost up to $2.9 trillion in total. Meanwhile, renewable energy alternatives have been cost-effective with the price of various renewable energy sources declining as the years roll by.

As a job-enhancer, renewable energy has been able to provide triple times more opportunities than non-renewable sources can as each dollar of investment in clean energy returns with a multiplier of output-friendly outcomes. With more focus tending towards better energy alternatives, it is predicted that about 5 million job losses in the fossil fuel industry will be felt by 2030. However, this loss will be replaced by an estimated 14 million job opportunities in the renewable energy industry, resulting in a net gain of about 9 million jobs.

Non-oil energy exploration will also throw the hydrocarbon oil industry into less relevance since unnecessary and wasteful subsidy costs will be non-existent. Also, environmental, health and economic damages due to oil production will be absent with renewable energy use and a system that is less prone to market shocks and energy insecurity will be enhanced with the provision of more diversified power supply options through renewable energy channels across the globe.

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