Upon initial investigation, some might say that the oil crisis has negatively impacted the energy market as a whole, making alternative sources of energy such as renewable energy look far less appealing.
The Different Worlds of the Oil Industry and the Renewable Energy Industry
However, advances in energy have rendered different market segments with varying energy sources that no longer compete directly against one another. For example, the primary function of oil is related to transportation — while renewable energy is mainly used for electricity. Therefore, the uptake in renewable energy hasn’t contributed to the dwindling value of oil.
Oil is seemingly unaffected by the market success of other energy sources. To counteract decreasing oil prices, firms are manipulating supply in hopes of raising prices — yet this short term plan will not be enough for the oil industry to bounce back. Despite the decline of crude oil price, firms such as oil and gas services company UnaOil continue to expand operations in oil rich fields, however the company’s strategic base in North Rumaila may not make a difference in the prediction that oil’s next crash will be permanent.
Unrelated to Renewable Energy: The ‘Beginning of the End’ for the Oil Age
Though the impending final collapse of oil are based on educated guesses, the rate of value decrease illustrates the oil industry’s recovery from the next crisis may be difficult. The ultimate proof of oil’s ill fated future according to Seeking Alpha is in the prices; what was once $120 per barrel is now just under $50. A devaluation by more than half, must surely confirm the oil industry’s concerns.
What does this mean for alternative and green energy sources?
Those currently working with renewable energy claim that the oil catastrophe is motivating people to go green. Compared to the volatility of oil value, renewable energy appears to be more stable and with fewer price spikes. But the current situation makes it clear that a switch to greener energies is not a solution for oil depletion, rather, it serves as a reminder about our treatment of the environment.
Robin Mills, author of The Myth of the Oil Crisis suggests the fundamental need to reduce greenhouse gas emissions is an issue more pressing than ever.
The problem with renewable energy is its need for greater funding — thus in order for them to draw investors, renewable energy developers need to lower costs and expand into providing heat for homes and industrial processes. Considering that aircraft (for one example) don’t have any alternative to oil, much of our global transportation system is still dependent on oil, which is why renewable energy must do more than merely supply electricity to stay competitive in the new energy paradigm.