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Anthony Behar/SIPA USA via AP
This story was first published by the Guardian and is reproduced here as part of the Climate Desk collaboration.
Oil and gas companiesYou could be in for a huge surprise from the Ukraine war, though few in the industry want to admit it, and many are using soaring prices and the fear of fuel shortages to cement their position with governments in ways that could have disastrous impacts on the climate crisis.
“There is a huge opportunity for oil and gas companies, though I’m sure it is not one they would have chosen,” said Robert Buckley, head of relationship development at Cornwall Insight, an energy analysis company. “They have the opportunity to reposition themselves” as crucial to policymakers. “There is going to be a very high price for oil for a very long time, and even the prospect of physical shortages.”
Oil prices have soared dramaticallyThe price of gasoline in the UK rose to $7.68 per gallon after it was increased to $130 per barrel. [natural]Gas prices have also risen.
Luke Sussams, of Jefferies investment bank, said: “The high-price environment is likely to last a long time. Boris Johnson stated that the North Sea will see a greater amount of production in addition to the accelerated deployment renewables. There are growth opportunities and upside potential. [for fossil fuel producers].”
The US, UK and EU have all made announcements Russia has placed severe restrictions on the import of oil and natural gas.The EU will be most affected by this as 40 percent of EU’s gas comes from Russia. However, this will impact all countries as international prices are set. These governments are now They urgently need to find ways to secure their energy securityIncreasing renewables and searching for alternative sources of oil- and gas supply.
OPEC and Saudi Arabia are obvious destinations, but they have so far been reluctant about increasing production. This could change as the Financial Times reported that the United Arab Emirates’ ambassador to the US favored an increase, news which sent oil prices down about 11 percent from their peak.
The crisis gives western oil and energy companies like BP, Shell, Exxon, and Total leverage with governments. Boris Johnson, the UK prime minister, defended oil companies from Labour’s Wednesday calls for a windfall income tax. He said: “The net result of that would be to simply see the oil companies put their prices up yet higher and make it more difficult for them to do what we need them to do … divesting from dependence on Russian oil and gas.”
Robin Baillie, partner in the energy group at the international law firm Crowell and Moring, said: “Governments around the world are looking for Finding an alternative to Russian energy requires short-term solutions, and the North Sea is an obvious one for the UK, until such time as more renewables come online.”
New oil and natural gas fields can take years or even decades to reach production. This means that even if companies expand their exploration immediately, it will not lower current prices. The big oil and natural gas companies are now Cash aboundsThey could use this money to explore new fields and pump more into existing fields.
Green campaigners warned that oil companies were using Ukraine’s emergency to advance their own interests. They encouraged governments to prioritise oil and gas production and to make decisions now about investments that would have little effect on the current crisis, but will greatly increase fossil fuel consumption for many years to come.
Marc van Baal, of Follow This, a group of 8,000 green shareholders in oil and gas companies, said: “The leaders of oil and gas companies really have shown in the last years that they want to Keep the old business model.. This is what they understand—turning hydrocarbons into petrodollars. So I am afraid this is what they are telling governments they should do.”
Tessa Khan, director of Uplift, which campaigns to end North Sea fossil fuels, said: “It’s shameful that oil and gas companies, some of whom have profited from their Russian partnerships for years, now seek to use this humanitarian crisis to further their interests. The fact that they are still being listened to by governments, the UK’s included, is beyond belief.”
The International Energy Agency, which reported on Tuesday that greenhouse gas emissions had shown the highest ever annual increase in 2021. The global energy watchdog reported that energy-related CO2 emissions, which are the bulk of greenhouse gases have increased by 6 percent to 36.3 million metric tons in 2021. This is their highest-ever increase. This was due to the global economy recovering from the Covid-19 epidemic, which heavily relies on coal to power its growth. The global increase of CO2 emissions exceeded 2 billion metric tons. This was the largest increase in absolute terms in history, surpassing the 2020 lockdowns.
The UK, the EU and the US are also looking into renewable energy and energy efficiency as alternatives to oil and natural gas. However, if fossil fuel companies decide now to expand exploration or production, this will continue to cause high emissions for many years and decades.
Lori Lodes, executive director of Climate Power, a campaigning group in the US, said: “More drilling in more places isn’t a short-term fix, it’s a long-term problem that only makes oil and gas CEOs richer and locks us into more dependence on dirty, unreliable, expensive and volatile fossil fuels.”
