Over the last few days, oil prices worldwide have plunged dramatically, at one point even falling into the negatives. A global lack of demand for oil, driven by the coronavirus pandemic, has caused oil markets to struggle with plummeting prices. Though it may seem complicated at first glance, the issue is relatively simple: given the lack of transport worldwide, oil use has gone down.
This means the companies holding the oil have more and more of it to hold, to the point where they’re beginning to run out of holding space. With this, shipments are being turned back, and the asking price for a barrel of oil reached around negative $40 a barrel. Oil and gas companies are taking major hits, with some filing for bankruptcy amid a worldwide crisis that has the potential to bring major change to the energy industry.
Renewable energy companies, on the other hand, have actually seen financial growth during these troubling times, and many analysts seem to think that this pandemic could be a key step in a slow but sure global transition to more reliable and cleaner green energy. Total, a French oil company, has increased cuts in spending by 20% and put a freeze on stock buybacks. But even with these troubling signs of impending financial doom, Total has promised one thing: there will be no cuts to the company’s investments in wind, water and solar energy.
While experts originally forecasted the peak of worldwide fossil fuel demands to occur in 2022, some analysts now theorize that the peak may have actually occurred in 2019 given the changes brought on by the pandemic. The coronavirus pandemic and subsequent global quarantines have advanced peak worldwide fossil fuel demands from 2022 to last year, meaning this could mark the beginning of an international transition to green energy.
With the possibility of airlines failing to recover after the pandemic, this theory seems even more plausible. International flights, a massive fossil fuel consumer, have already received billions of dollars in government bailouts. If the airlines struggle to make a comeback, this enormous carbon source could see a marked drop, and the death of fossil fuels could be bumped up just a little earlier. Given the industry has seen a 95% reduction in passengers and profits 55% lower than last year, the golden age of commercial aviation seems to be coming to an end, and carbon emissions hopefully will die with it.
On the other hand, the U.S. COVID-19 bailout package has offered trillions of dollars along with low-interest loans to fossil fuel companies. This enormous financial shot in the arm comes without any requirements to continue taking steps towards stemming carbon emissions and essentially gives permission to these companies to pollute as much as they need to in order to stay in business. With the laissez-faire attitude of the federal government to carbon emissions in times like these, the message has never been clearer: the time to begin making the change to greener energy sources is now. Cities all over the world have shown the benefits of cutting emissions back.: cl Clear skies in Beijing and clear water in Venice are testaments to the scarring effects the oil and gas industries have had on this planet. It’s time to seize this chance we’ve been given and leave fossil fuels in the past.