OPINION: The huge challenge facing a world trying to pivot away from fossil fuels has been in sharp relief over recent days.
Scientists recently attributed to global warming the ferocity of one of the most powerful US Gulf of Mexico hurricanes in 150 years, which temporarily shut in nearly all offshore oil and gas production there.
Similar climate-change links have been suggested for the “unprecedented” wildfires that rage around California on the US West Coast.
These events underline the urgency of climate action even at a time when PetroChina and others warn of looming fossil fuel supply shortages.
The price of crude on global markets is back up around $72 per barrel after a dip last month, and even the new pro-green US government under President Joe Biden has called for Opec+ to increase oil output.
Centrica, the owner of domestic energy supplier British Gas, has warned of soaring consumer prices and potential UK industrial shutdowns this winter due to a global gas supply crunch.
Some of these problems could be temporary, but the dilemma of wanting to increase short-term oil production while trying to phase it out over the longer term muddies the debate over how to enact an orderly and fair energy transition.
Western oil majors — in the firing line of popular protest — are told to wind down output even as the world demands more of their products.
Governments facing short-term electoral hurdles try to look after themselves by avoiding tough decisions on carbon pricing while pushing responsibility for energy transition as far as possible onto the private sector – or individuals.
But there are ministerial difficulties, too, as International Energy Agency executive director Fatih Birol noted with reference to countries such as Iraq.
He asked: How is a poor but oil-dependent country meant to switch to renewables without external financial help?
And even a relatively affluent nation such as the UK has its own difficulties as climate critics call for an immediate North Sea oil shutdown.
As industry body Oil & Gas UK points out, the country remains very dependent on oil and gas, with 70% of this primary energy demand met locally.
What is the point of chasing away planned new investment that creates jobs and opportunities at home, only to become dependent on foreign imports?
The wider picture facing the world was laid out by international consultancy DNV in its Energy Transition Outlook 2021.
It projected that fossil fuels will remain in the driving seat by the mid-century, supplying half of all primary energy, with far too little growth in carbon capture.
The major downside is that on this trajectory, the world is heading for 2.3 degrees Celsius — above pre-industrial levels — by 2050, DNV said.
That temperature would make the weather highly volatile, raise water levels due to more Arctic melting and put some nations under water.
So there are no easy answers to retaining energy security, providing cheaper prices and tackling global warming at speed.
Everyone from oil executives to government ministers to members of the public need to keep their heads and steadily plot a way through the thicket.
(This is an Upstream opinion article.)
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