The use of renewable energy began to gain momentum in the last decade as a reaction to high oil prices from 2008 through 2014. The price of crude oil remained high partly because of production limits imposed by the Organization of Petroleum Exporting Countries (OPEC). During this time, renewable energy sources continued to be developed as a less expensive alternative. Once OPEC began to produce more oil for the world market, the price per barrel was cut almost in half.
The use of oil and gas has made it possible for large-scale industrial development in our country. These fossil fuels are primarily used in factory production and transportation, and coal-fired plants are more often used to meet the demand for electricity. Along with this dependence on fossil fuels, there has been a rise in pollution from industrial emissions. Scientists have identified the combustion of oil and gas as a primary source of increased greenhouse gasses and accelerated climate change; even Pope Francis has sounded the alarm against fossil fuel emissions.
In the past, oil and gas production were favored over renewable energy sources like solar power. Government subsidies and legislation beneficial to oil companies helped keep the fossil fuel industry in business. Now that the oil market is glutted, driving prices down, it could be an optimum time to increase the tax on fossil fuels in order to fund research into clean energy, as President Obama has suggested.
When oil prices were at their highest, there was a lot of interest in alternative energy sources like hydroelectric, solar, wind and geothermal energy. Even though oil prices have plummeted, there is still progress in the technology behind renewable energy resources. It is also considered to be an economically stable resource, while oil and gas production is seen as more volatile in the market. Estimating which areas are rich in fossil fuels is not an exact science, and those reserves will one day run dry.
Another threat to the demand for oil is the development of biofuels that do not pollute the environment. There have also been breakthroughs in creating clean energy from waste products. New technological breakthroughs and lower production costs will continue to make renewable energy more cost-effective. Solar and wind energy are expected to triple their market share in the next twenty years.
As renewable energy has continued to gain a foothold, with about 13 percent of the United State’s energy coming from renewables (more info here), some of the largest fossil fuel industries have tried to fight the inevitable. Although oil production has benefited greatly from favorable legislation and government subsidies, the pressure is on from the fossil fuel industry to deny these benefits to clean energy producers. One tactic is to deny solar power users the right to sell excess power to utility companies.
Breakthroughs like the electric car will diminish the need for fossil fuels in the future. Plans are underway for solar-powered refueling stations to be installed across the country to meet the demand as more drivers go electric. Self-driving solar powered cars will reduce not only carbon emissions but traffic accidents as well.
Coal and gas already have more of a market share than oil. Clean energy sources are also eroding the market for petroleum. The challenge for today’s fossil fuel suppliers is to adapt to what is coming. We can no longer afford to pollute the environment, and global warming is a clear and present threat. Going forward, the only profitable business model will be divesting from fossil fuels and investing in clean energy technology, an idea that has already begun to be implemented in other countries.