Oil, Gas Sector in Terminal Decline? OilPrice.com

The rise of renewable energies and reduced energy consumption due to the Covid-19 pandemic may push fossil fuels into terminal decline, reports Robert Rapier. Global consumption of coal, while still growing, peaked in the developed world after being replaced by natural gas. Price pressure has accompanied intense production for oil and natural gas in recent years while consumers increasingly prefer renewable energies. The Covid-19 pandemic and subsequent shutdowns abruptly reduced demand for fossil fuels. Renewables could suffer in the short term, too, but some analysts expect demand for sustainable energy sources to gain momentum. Rapier describes how liquefied natural gas terminals encounter high costs while running at a fraction of capacity. “The fact remains that the world could find itself with an energy shortfall if the crisis is long-lasting and fossil fuels disappear faster than originally expected,” he writes. “That could hit the power sector because of falling coal and natural gas production, at a time that global demand for electric vehicles is growing…. The current glut of energy supply may turn into a series of severe intermittent shortages when sun doesn’t shine, and wind doesn’t blow.” Nuclear energy is another option, but consumers express concerns on safety. – YaleGlobal