Will the rise of solar and other renewables torpedo the oil and gas industry?


The world has come a long way since Faraday produced an electric current from a magnetic field and invented what we now know as electricity. This ‘electricity’ has gone on to permeate every sphere of human life and ushered in an era of increasingly sophisticated devices and appliances. Every major industry requires electricity to function and according to the Economist, current global consumption is around 15 terawatts of power.
At the outset, electricity was primarily generated from fossil fuels- coal, oil and natural gas. These sources however, are available in limited supplies and take a long time to replenish. Furthermore, burning fossil fuel emits carbon dioxide (CO2) which slows down the production of ozone and indirectly enhances the greenhouse effect, a precursor of climate change.
Solely continuing along this path would not only be detrimental to the earth’s condition, but eventually the world wouldn’t be able to cope with the overwhelming energy demand.
Soon enough, nuclear energy emerged as a viable alternative to fossil fuels. Not only was this method cleaner, it produced far higher yields than oil or coal. However, all enthusiasm was swept away with the Chernobyl and Fukushima disasters and public opinion soon turned.
The world had to come up with cleaner, safer sources of electricity whose supply was unlimited and that were naturally replenished. This conundrum birthed what we now know as renewable energy.
Comprising solar, wind, geothermal, biomass and hydro sources, the renewable energy industry currently generates over 20 percent of the world’s electricity. Fuelled by massive investment, public and regulatory support, the industry continues to make giant strides in growth. In the United States for instance, companies purchased 6.43 gigawatts (GW) of renewable power in 2018. And, as of December that year, 100 U.S. cities and over 155 companies globally had committed to 100 per cent renewable energy goals.
Moreover, the costs of renewables continue to fall.  In many countries, it is now the cheapest option for generating electricity. This cost-competitiveness, Elena Giannakopoulou- head of energy economics at BloombergNEF- has attributed to technology innovation, economies of scale, stiff price competition and manufacturing experience.
Solar in particular, has attracted around half the total investments in renewables over the last decade. Spurred on by an increasing environmental awareness among Governments and individuals, it has grown from a global output of 25GW to over 600GW. In the US, 10.6 gigawatts was added to the solar PV capacity in 2018 alone. 
After the price of crude oil slumped in 2014, analysts projected a stunt in the growth of renewable energy. Lower oil and gas prices, it was figured, would push countries to shift their generating efforts to oil and gas. These projections proved far-fetched. And, flawed.
Because, not only did renewables continue to grow, more technological advancement was made in the industry.
With this seemingly unstoppable surge in solar and other renewables, should executives in the oil and gas industry be worried? Maybe not.
It’s worth mentioning that despite the overwhelming benefits of renewable energy sources, there are considerable drawbacks to the technology. Firstly, there’s the ‘small matter’ of intermittence. The sun doesn’t always shine and the wind doesn’t always blow. Additionally, there are yet limitations in available transmission and storage technology.
These shortcomings make a supplementary, regular source of power necessary. In this, oil, and particularly natural gas (which accounts for 27% of power generation in the US) have a role to play. The US is the world’s leading producer of natural gas and based on geological surveys, global reserves in 2012 were estimated at over 180 trillion cubic metres. Natural gas is relatively cheap and more than ample enough to supplement renewables.
All the same, renewables are the future. And even oil and gas executives, it would seem, agree. Nowadays, Chevron is the world’s largest private producer of geothermal power and shell is the leading retailer of biofuels. In addition, renewable energy is taking an increasingly vital role in policy-making of oil and gas companies.
In reality, complete transition to renewables will take time. The energy industry is of such enormous significance that wholesale changes are not feasible, nor are they practicable.
And, until wind turbines are manufactured in wind powered factories and solar panels are assembled in sun powered workshops, the oil and gas industry will remain a part of the energy conversation. For better or for worse. 
Precious Marho is a freelance copywriter. He covers the safety, oil and gas and green energy industries.

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