Low Oil Price and the Renewable Industry

Maybe we are just all living in denial of our impending doom, or possibly we will wake up in the year 2100 and wonder what all the fuss was about.

[Robin Limb | Oped Column Syndication]


The major oil companies are currently looking forward to the increase in oil prices — but how long will it last?

In a total volte face [read reversal] on the global energy markets, and with the cartel of OPEC reduced to impotency by the desire of countries such as Saudi Arabia to go it alone (to see who is prepared to blink first in the race to the bottom on price) with unfettered production, the fossil fuel industry versus renewable industry has been turned on its head.

The oil giants have never truly engaged with the concept of renewable energy, mainly because it is tiresome, high cost, and fraught with issues surrounding government support and legislation. To this day, it remains more expeditious and economic to simply keep pumping the ‘black stuff‘ [read oil] out of the ground. The whole oil supply chain is geared to fossil fuels, and although it is technically possible to include bio-fuels such as ethanol and diesel at low levels, the economics are unexciting and uncertain.

The prices of bio-ethanol and bio-diesel have never yet tracked the price trend for fossil fuels, mainly due to the foot-dragging of the energy companies. They will of course make token gestures to the pursuit of renewable energy sources; but when the chips are down, they will just keep on doing what they have always done — even more so now that volume output is the only option.

Caught up in the quarrel of ‘Climate Change’ and environmental concerns following some major pollution catastrophes, you could be forgiven for wondering what the boardroom conversations at BP, Shell, Amoco, Texaco, and the rest of the ‘rat pack’ are all about. The renewable sector – and its bolstering by imposed statutory inclusion levels of their products – has spectacularly stalled as a result of the price collapse in fossil fuel alternatives.

The US is now much less reliant on gas imports due to the advent of fracking, which has proved to be another negative driver for demand.

UK petrol prices are currently 25% lower than four years ago (though prices are set to increase), prompting the average motorist to drive further and more frequently than he would otherwise have considered. Gas prices are being increased for consumers in the face of rising demand during a cold winter.

The issue of carbon emissions and so-called ‘global warming’ has been placed on hold, amid countless challenges to the facts and figures behind anthropological climate change, and what better way to upset the renewable nirvana than to visit fossil fuel prices on hapless manufacturers and consumers.

Maybe we are just all living in denial of our impending doom, or possibly we will wake up in the year 2100 and wonder what all the fuss was about. Many of us will certainly not be here to know the outcome.

In the meantime, it is just business as usual, as we continue to pump it up.


Robin Limb is an independent agricultural consultant from Hunstanton, Norfolk, United Kingdom.


 

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