26

NOV

Sources of coal, gas and oil

Posted in: Blog

Crude oil prices are at a four-year low and the Overseas Development Institute has accused world governments of failing to live up to promises to reduce subsidies for fossil fuels, with G20 nations spending a whopping £56 billion finding new sources of coal, gas and oil.

Here in the UK, a major new coal find has been reported in the Firth of Forth, with plans to extract gas and sway public opinion towards shale gas extraction laid out in the form of a proposed sovereign wealth fund.

While renewable sources of energy are unquestionably on a significant upward curve, it’s also clear that the downward line of fossil fuels is not curving at nearly the same speed. Writing about energy efficiency, community projects and renewables can almost make you forget that this is still a world dominated by the traditional, dirty forms of energy. Proponents of sustainability like Jeremy Leggett  point to the high costs of companies chasing a short-term solution:

The oil-and-gas industry has been losing cash by the tens of billions, because high drilling costs mean most companies are spending more than they are earning from low-price fracked gas, even when high-price fracked oil is added to the equation.”

Meanwhile The Economist accepts that extracting Britain’s remaining oil reserves is likely to be a technically tough prospect. In terms of international crude oil prices, those in the renewable industry apparently no longer feel threatened. A piece from US energy journalist Garrett Hering reinforces the idea that a number of industry sources think along similar lines. Financial advisor Pavel Molchanov says:

As far as solar and wind go, the [impact] from lower oil prices is zero in North America and Europe, where power prices do not have any link to oil.”

Mark van Gerven from photovoltaics manufacturer First Solar adds:

Fluctuations in oil prices have little impact on solar or many other renewable energy sources. This is partly why the economic proposition of solar is so compelling, unique and valuable. For example, up to 50 per cent of the cost of a fossil plant is the expense of the fuel over the life of the plant, while sunlight is essentially free.”

Renewable energy and finding ways to use less in homes and businesses will be living side-by-side with fossil fuels for a while yet – but it’s clear that it’s a far closer competition than it’s ever been before which means the stage is still set for a ‘tipping point’ towards a cleaner future

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