The coal, oil, and gas industries are in a slump. For the past decade, increased pressure from advocates and experts alike has resulted in a shift in focus from energy consumers. Instead of relying on fossil fuels, people are more likely to favour the renewable energy sector. So, it would make sense for large oil and gas corporations to transition to renewables. Right?
Well, try explaining that to the fossil fuels industry. Many oil and gas companies have spent billions in advertising and years lobbying political organizations for the continued use of fossil fuels. This all has occurred while the fossil fuel industry is in one of the largest recessions in its history.
So, in order to move ahead in the fight against climate change and decrease the usage of finite energy sources, we need to analyze our capability to completely transform the operations of the energy sector. Can we fully transition to renewables? And how?
Before looking at our ability to transition to renewables, let’s take a look at the fossil fuel industry and why change just makes sense.
For years, fossil fuel companies have underreported and even flat out denied that energy sources like coal, oil, and gas can have a terrible effect on the climate, and the environment as a whole. Lobby groups and trade associations for the promotion of the oil and gas industry, such as the American Petroleum Institute (API), have repeatedly funnelled billions of dollars into advocacy against green energy. For example, they threaten Americans with the loss of millions of jobs and higher energy costs if bans on fracking or natural gas procurement are instituted. They also routinely run smear campaigns against green advocates, like this one on Facebook.
A startling report by the Guardian shows that companies like Exxon Mobil, Chevron, and Royal Dutch Shell have spent up to $3.6 billion (yes, with a b) on advertisements for the promotion of oil, gas, and coal. Although spending has decreased in recent years, it still signals a wider hesitation to accept green energy, at least from the side of the oil and gas industry.
However, companies are finally opening up to the possibility of the transformation of power generation, and the lessening dependence on finite resources. Why? Mainly because of the economic consequences. For years, consumers have moved away from oil and gas in favour of the more popular renewable energy sector. In 2019, the energy sector was the worst performing area of the S&P 500, a famed American stock index.
But, putting the opposition by the oil and gas industry to one side, let’s get to the bigger question: can we actually transition to renewables?
So, Can We?
The short answer is this: yes. However, it will require constant attention, care, and input to fully transition our energy dependency from finite resources to green alternatives. It will not happen overnight, and it most definitely will not happen quickly. But, it’s the best chance we’ve got.
First, as the International Energy Agency (IEA) said in 2021, there can be no new investments into the coal, gas, or oil industries. This includes the immediate halting in the development of new hydrocarbon(gasoline fuels) technology. As well, there can be no more construction or promotion of fossil fuels. Instead, advocates, experts, and government officials need to convince big oil and gas conglomerates to transform their energy platforms. Essentially, the entire coal, oil, and gas industry needs to be scrapped in order to pave the way towards renewables.
Second, demand for gasoline and coal must decrease, and fast. That being said, carbon pricing may not be enough on its own to force the transition to renewables. While it may produce a small change and seem appealing, carbon taxes by themselves will not be able to decrease global gasoline demands, as some economists have demonstrated. For example, in the United States, a 50% tax would only result in a reduction of 3.4 million tonnes of CO2 – this is an insignificant proportion of the approximately 1.4 billion tonnes the nation emits every year.
Instead, to counter the demand of fossil fuels, there should be more investments into green technologies to lower prices. As this survey shows, a majority of Canadians support this alternative. And, the continued investment into green technologies could not only create a cleaner environment, but also support scientific development.
After all this, jobs in the fossil fuel industry need to be replaced with comfortable jobs in the renewable energy sector. While jobs in the fossil fuel industry tend to be quite high-paying, especially in newly industrialized countries such as India, it is necessary to convince workers with higher-paying jobs in the green energy sector.
But, the government cannot leave these workers on their own during the transition: since energy jobs tend to be very specialized, government programs need to be instituted to help train, relocate, and care for workers during the transition. Doing so will help avoid an economic disaster.
Certainly, a major focus of the transition will be the accessibility and comfort of energy workers. If we simply switch our methods of energy generation overnight, the results will be catasphrophic, not in the least for workers. Some professors and experts argue that subsidies should be instituted for workers undergoing the change. Also, the input of workers should definitely be heard and recognized; the inability to do so will not only spell an economic disaster, but also a political and social one.
The Response of Fossil Fuel Companies
As we’ve reviewed, the fossil fuel industry is not doing too hot (no pun intended). Therefore, a significant shift in the response and strategies of fossil fuel corporations has been seen over the past few years, especially as external scrutiny has increased. In fact, on all of the websites of the companies listed below, the first notice that appears are their plans to advance environmental sustainability.
Some petroleum conglomerates like Royal Dutch Shell, owners of gas stations you’ve probably visited many times, have already made plans to transform their power generation methods. Although most of their profits came by filling the energy needs of consumers around the world, recently, major players like Ben van Beurden – the CEO of Shell – have openly admitted that “the energy industry must evolve”.
Under his leadership, Shell revealed plans for a new environmentally-focused strategy, which includes diversifying into electrical power generation, and thereby cutting down on total emissions by 50% by 2050. While garnering approval from some advocates, the company has also been criticized for its plans to expand their plastic programs, and because it might not be enough in light of a looming climate disaster.
Other energy corporations have followed suit. ExxonMobil stated in 2020 that they will be looking to “invest in low emission energy technologies”, and to reduce company emissions by 15-20% in the next 5 years. Chevron has unveiled plans to create new energy facilities, with designs showing a 90% reduction in overall carbon intensity. It also has pinpointed their commitment to more innovative and environmentally friendly development. Aramco, another major energy supplier based in the Kingdom of Saudi Arabia, has detailed its approach to a sustainable circular carbon economy.
While the commitment of these companies remains to be seen throughout the next few years, one thing is clear: never has support for a transition to renewable energy sources been greater, not only in Canada, but also around the world. Climate education has increased, and for that, we should give ourselves a pat on the back. But we’re not quite done: the arduous transition to an economy based on green energy still has to be implemented. With that in place, we can move another step closer to achieving a sustainable economy.