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WHAT we need is either clean energy or renewable energy that will not harm us and protect it from the evil of fossil fuels, which leads to warmer air temperatures and causes all sorts of global disaster in terms of overflowing of rivers and seas and harming human lives. However, today, with the invasion of Ukraine and boycott of Russian oil and gas by Europe and the G7 group, the world is going to face tightness in the traditional oil and gas markets.
This could lead to an explosion in energy prices, especially with the winter season in the USA and Europe, and the tight supply. It will cause major consumers globally to switch back to the enemies of the environment, mainly coal and nuclear power without any hesitation, especially countries like China, USA and India. They are increasing imports from Colombia, Indonesia, and South Africa. France is increasing its dependence on nuclear energy.
Britain has been depending on wind energy by almost 50%, making it the top country to do so, while planning to build a new nuclear plant. In short, going back to fossil fuels and non-renewable energy is the name of the game, as long as it stops at burning tires, in our today’s environment with lack of energy supply from Russia. Banks and financial houses are forced to reduce their investments in oil and gas companies, as they are not doing much due to many reasons such as the time span possibly. Europe, for instance, is in need of energy now and not tomorrow. This will of course lead to going back to the use of coal, nuclear, and fossil fuels.
The same USA administration that is pushing for renewable energy has taken office, and is now demanding more investments in fossil fuels and promising companies with more federal lands. The world is not able to meet the global demand for next year, with demand getting close to 102 million barrels per day. Oil producing and exporting countries are openly stating that there are no more new oil discoveries, and they are not prepared for further investments.
Shareholders of international oil companies are making monies, but are reluctant to pour more money, leaving it to the oil producing countries. The Russian war opened our eyes to the new and hard challenge of replacing Russian supply of more than 11 million barrels per day or 7 million going to the free markets, with no replacement for it. Europe is in a dilemma in terms of tackling the supply of Russian energy of 700,000 barrels per day through the pipeline, and figuring out how to price it.
This is still a mystery. Renewable energy in all its forms must take a break until reaching equilibrium and achieving confidence of not being of any harm to human beings. Even extracting hydrogen from water needs time, ensuring its safety all the time. Clean energy will come and will have its time, but for now, it is hard to see it coming within the next few years. Now all of us are busy with the adequate supply of any form of energy, be it coal, nuclear, or oil and gas, and to invest in the same.
By Kamel Al-Harami
Independent Oil Analyst
Email: [email protected]