The world today is faced with one question, and that is of survivability, which though seemingly very precarious, has a lot many layers beneath the sheen that are hidden and more vicious, one of them being our carbon and greenhouse emissions. We are hogging on energy as if there is no tomorrow, and thus the suppliers who are trying to reign in the demand curve and having understandably pretty less time to does that opt for the cheapest resource available to them for energy production, the fossil fuel. Fossil fuel-based energy production contains not only oil and gas powered power plants but also coal and goal gas-powered power plants, which are the highest CO2 and greenhouse gas emitters in the world.
A report recently published here in Paris went ahead to say that if the world has even to try to reach it's sustainable development goals (SDG's) of 2030 and net-zero emissions target for 2050 which was ambitiously set by the EU and put in the clauses of the Paris Agreement, the major oil companies will have to drop their production to a third of their current levels.
Comprehending the data, one must feel that why would oil manufacturing companies do such a thing, and what is their share to gain from such a move? Well, for starters, in order to mitigate long-term costs and operational credits, there are certain expenditures borne by the company, which is a fixed cost, and the extraction, license, and other costs are floating costs. Now since the cost of renewable energy had plummeted to it's lowest and is expected to drop further in the future with the rise in technology sharing its preference with the renewables, oil will have to be in the range of $10-20 to still stay competitive with the renewables which is almost equivalent to the fixed costs that a company incurs to facilitate a plant's functional operations.
It will be interesting to see how big oil corporations spin this number for their investment modules and what is it that they supply to their investors in a future plan, but one thing is for sure that if we have to survive tomorrow, we must start today or there will actually have been too late.
Tags : SDG's, oil manufacturing,