The oil crisis triggered by the Iran war has changed the fossil fuel industry for ever, turning countries away from fossil fuels to secure energy supplies, the world’s leading energy economist said.
Fatih Birol, the executive director of the International Energy Agency (IEA), also said that, despite pressure, the UK should forgo much of its potential North Sea expansion.
Speaking exclusively to the Guardian, Birol said a key effect of the US-Israel war on Iran was that countries would lose trust in fossil fuels and demand for them would reduce.
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This will have permanent consequences for the global energy markets for years to come.”
On exploring new oil fields in the North Sea:
Birol said: “It is up to the government, but these fields would not change much for the UK’s energy security, nor would they change the price of oil and gas. They would not make any significant difference to this crisis.”
I think the same will be true for fracking, what the German goverment is considering.
Birol also said:
Continuing high fossil-fuel prices could tempt developing countries to turn to coal, but solar was competitive with coal on cost and was growing faster.
Renewables offerred a no-regrets alternative and nuclear power was also likely to be increased. Building renewables was an option “I never heard that anybody ever regretted”, he said. “I don’t see any downsides for renewable energy.”
Experts and campaigners said the views of the IEA chief should be heeded. Ed Matthew, the UK director of the thinktank E3G, said: “Birol is simply reflecting what every sane, independent energy analyst can see. The UK’s fossil fuel reserves have been depleted by 90% and will do nothing to bring down bills.
He added: “The only effective path to energy and economic security is homegrown clean energy. All political parties should now be uniting around that mission. Their failure to do so tells you a lot about whose interests they truly represent.”
This is likely now.
Here is an article about earlier estimates when the oil production was going to peak, due to resource depletion and rising costs:
https://en.wikipedia.org/wiki/Predicting_the_timing_of_peak_oil
We are or were anyway very close to that point. One central fact for what follows is that the large and cheaply to exploit oil fields were discovered first, exploited first, and also last much longer. New oil fields are much smaller, more remote or deep under the sea, need higher costs for development, have a much smaller ratio of energy-invested-on-energy-returned, and have a shorter life time. This already creates a kind of economic cliff.
Now, there are several new factors which all will accelerate the decline of oil:
Another factor that might happen by the way is that the reduction of shipping as a result of lacking oil in South Asian waters - and of reduced economic activity, will likely lower the albedo over this sea regions, which could make the effects of global heating there much more acute. (This nexus is not yet 100% scientifically assured but the most likely explanation for the rise of extreme weather in the Mediterranean). And specifically South Asia which has not only very hot but regionally also extremely humid weather is very vulnerable to heat waves. Adding to that that some electricity there is still produced by oil generators, and failure of electric grids during heat waves is a catastrophic danger. If that happens, this is likely to change the way many people there think about climate change, and will put more pressure on governments to do something about it.
Oil will of course still be used in the future, but in much less quantity, and more as an expensive, environmentally highly damaging, special chemical product that is a necessary evil for some purposes.