Is oil responding quickly enough?
Kane Davis Cooper ̶ At the moment, the world obtains most of its energy from fossil fuels but times are changing. Governments increasingly are introducing environmental legislation and customers are clamouring for greener sources of power such as wind and solar.
Established fossil fuel companies should act quickly before the demand for oil and coal finally peaks.
According to energy analysts, wind and solar are set to reshape the energy market and the Big Oil companies need to act now to maintain their market share. An estimate of some $350 billion needs to be invested over the next twenty years if Big Oil wants to maintain its share in the new renewable energy market (currently around 11%).
It is time for the oil and gas sector to rethink its future strategy say industry analysts as companies such as Chevron and ExxonMobil have been slow to invest seriously in the renewable energy market quoting high costs and non-permanent government subsidies as reasons to shy away.
That argument is fading fast.
As technology improves and more money is invested in research and development, renewable energy costs have been decreasing and demand increasing. Solar costs have been cut by around 50% over the last few years and the sector grew 16 times as much as the US economy last year.
All of this points to more reason why Big Oil should get on board fully, if only to protect their own future businesses, although the change from current demand patterns will take time. How long? Nobody really knows.
Oil prices are historically low at the moment and this has restricted investment in that sector.
Despite the US pulling out of the Paris Climate accord, most other countries in the world are committed to reducing emissions and providing their people with cleaner energy. Recent energy analysts are predicting oil peaking around 2030 and declining as carbon emission become even more acceptable.