{"id":165726,"date":"2022-02-01T20:35:12","date_gmt":"2022-02-01T15:05:12","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=165726"},"modified":"2022-02-01T20:35:12","modified_gmt":"2022-02-01T15:05:12","slug":"how-surging-oil-prices-threaten-worlds-climate-goals","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/how-surging-oil-prices-threaten-worlds-climate-goals\/","title":{"rendered":"How surging oil prices threaten world\u2019s climate goals"},"content":{"rendered":"\n

News: <\/span><\/b>Oil prices globally have seen a massive surge due to<\/span> reduced supply and increased demand due to economies rebounding from the effects of the COVID-19 pandemic.\u00a0<\/span>The geopolitical tensions in Russia-Ukraine are also helping the price surge.<\/span>\u00a0<\/span><\/p>\n

What are the implications of the price rise?<\/span><\/b>\u00a0<\/span><\/h5>\n

Economic aspect:<\/span><\/b> Companies may be tempted to invest in oil and gas extraction. However, this will <\/span>not be profitable in the long term as oil demand will slow down<\/span><\/b> as governments around the globe have climate commitments and are planning to increase reliance on electric vehicles. <\/span>\u00a0<\/span><\/p>\n

This may lead to <\/span>oversupply and stranded assets,<\/span><\/b> and <\/span>Shareholders could face catastrophic levels of value destruction<\/span><\/b> as prices fall. <\/span>\u00a0<\/span><\/p>\n

Environmental aspect: <\/span><\/b>Not only this investment is unsound economically but has obvious negative implications for the environment. Around <\/span>53% of the 34.81 gigatonnes of carbon dioxide <\/span><\/b>emitted from the burning of fossil fuels in 2020 <\/span>came from oil and natural gas<\/span><\/b>.<\/span>\u00a0<\/span><\/p>\n

This is specially important as wealthy countries have not made commitments to limit oil and gas production.<\/span> Major producers like the United States, Canada and Norway have\u00a0<\/span>aggressive production plans in place for the next few years.<\/span>\u00a0<\/span><\/p>\n

Impact on India:<\/span><\/b> As India <\/span>imports 86% of its crude oil and 55% of gas<\/span><\/b>. It is thus <\/span>heavily exposed to global fluctuations<\/span><\/b> in the oil markets.<\/span> \u00a0<\/span><\/p>\n

What is the way forward?<\/span><\/b>\u00a0<\/span><\/h5>\n

Oil and gas industry is well aware of the energy transition underway\u2014 from fossil fuels to zero- carbon renewables and electrification.<\/span> So to effectively manage this transition, they must resist the temptation to invest heavily on short-term price signals <\/span><\/p>\n

Failure to acknowledge these change involves the <\/span>risk of wasting<\/span><\/b> huge amounts of <\/span>capital<\/span><\/b>, delivering <\/span>sub-par returns to investors<\/span><\/b> and locking-in <\/span>emissions that will make the world miss Paris goals<\/span><\/b>.<\/span><\/b>\u00a0<\/span><\/p>\n

Source: <\/span><\/b>This post is based on the article \u201c<\/span>How surging oil prices threaten world\u2019s climate goals<\/span><\/b>\u201d published in <\/span>Down to Earth <\/span><\/b>on 31st Jan 2022.\u00a0\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

News: Oil prices globally have seen a massive surge due to reduced supply and increased demand due to economies rebounding from the effects of the COVID-19 pandemic.\u00a0The geopolitical tensions in Russia-Ukraine are also helping the price surge.\u00a0 What are the implications of the price rise?\u00a0 Economic aspect: Companies may be tempted to invest in oil… Continue reading How surging oil prices threaten world\u2019s climate goals<\/span><\/a><\/p>\n","protected":false},"author":10328,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10504,10514,216],"class_list":["post-165726","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-down-to-earth","tag-dte","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704661239},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/165726","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10328"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=165726"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/165726\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=165726"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=165726"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=165726"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}