Oil is the world’s most important fuel sources, accounting for a big percentage of the world’s energy consumption: global production stands at 97 million barrels every day (Langwith, 2009). With time, its use has seen the world’s economy rise. Oil has also fueled the rapid global industrialization of the 20th century, and it has led to modernization in terms of locomotion, which makes it crucial in global transportation. Refined oil produces fuels that are used in transport and heating purposes such as gasoline, diesel, jet fuel and kerosene (Nye, Kaplan, Disney Educational Productions & Underwriters’ Laboratories, 2012). Its production is also accompanied with side products that are important for the manufacturing of plastics, chemicals, waxes lubricants, tars, and asphalts among others. The majority of all pesticides and fertilizers are made from oil or its by-products. This paper will show that advance in renewable energy will ultimately be the most significant challenge for the oil industry. The paper will also demonstrate how renewable energy gains more acceptability as the result of being more environmentally friendly and promising to be more economically sustainable in the future. Three reasons as to why renewable energy will be the major challenge to oil are its environmental sustainability, being economical and being available in many forms in many parts of the world as well as being inexhaustible. These three aspects will be discussed throughout the paper. Politically, various national governments and global organizations such as the UN are in the support of continued use and research into renewable energy, which will also be described in the paper.
Oil production and refinery has occurred since the 1850s, with its exploration being a major milestone in the prosperity of many a nations. Oil formation takes place through decomposition of organic matter over a long period of time. Oil industry involves the processes of exploration, extraction, refinery, transportation, and marketing of oil products. Technological advancements have been made to improve efficiency throughout these processes. For instance, during the compression of fuels, ease of flow has been enabled through pipelines, leaks have been detected in pipelines as well as automation of communications in monitoring pipelines and equipment has been made.
I agree with the statement that renewable energy is a challenge to the oil industry because there have been many challenges accompanying the oil industry. These challenges include water pollution during refinery and in cases of oil spillage, emission of volatile organic compounds (VOCs), emission of greenhouse gases and pollutants during combustion of fossil fuel such as acidic and toxic oxides of nitrogen and sulfur as well as heavy metals. Many nations, including Canada, spearhead for the adoption of a more environment safe energy sources. Politically, with increased climate changes and global warming, many nations reduce the use of oil and its products and embrace renewable energy as an alternative source. The US President Barack Obama is a big supporter of renewable energy. Another supporter of green energy revolution is the UN Secretary General, Ban Ki Moon. Many a nations are in support of renewable energy as an alternative source of energy. Since oil is a non-renewable natural resource, it is prone to depletion in terms of world supply. This renders sustainability of oil production non-viable, leading to the diminishing of economic sectors and the consequent failure of markets. Research has been done on biofuels to supplement petroleum with a lower output level, proving that biofuels cannot displace local oil production. Due to fossil fuel reserves deeming exhaustible, there has been an urge for generation of renewable energy also for sustainable development purposes.
In addition, due to current climate conditions, suitable geographical location of some places and increased economic potential are just but some of the reasons that favor the adoption of renewable energy. Adoption of renewable energy will help in improving ecological status, sustainable socio-economic development, and implementation of green technologies as well as energy security. The adoption of green technologies has led to the improvement in overall economic status. Therefore, in some places, energy efficiency has been reached through sustainable development, reducing reliability on fossil fuels. Use of renewable energy has also resulted in reduced environmental problems caused by fossil fuels and the use. The foremost precedence in the espousal of renewable energy is to speed up the transition from reliance on fossil fuel energy sources. Renewable energy and its use depend on the needs of the geographical location, which further enhances future sustainable development effects. Relevant legislation and state programs have been embraced, legislative frameworks formed and appropriate governmental structures have been established to the effect of success of renewable energy (Bigerna, Bollino, & Micheli, 2015).
Renewable energy has also stood the test of time unlike fossil fuels that were invented years back and that are prone to depletion in the next few years. Renewable energy has been used for a long time. For instance, the Europeans have used harnessed kinetic energy using vertical water wheels for grinding grain and processing leather among other uses since 200 B.C. (Bryce, 2011). Other commonly used sources of traditional renewable energy were man power, animal power and wind in grain crushing windmills. Traditional biomass use is the oldest recognized exploit of renewable energy in the modern history. It was used to stimulate fires and generate power to locomotive trains (Bryce, 2011).
Renewable energy describes a form of energy that originates from replenishable resources on a human timescale such as sunlight, wind, tides, waves, rain, and geothermal heat. It has been used in many instances to replace fossil fuel for the generation of electricity, heating/cooling of air and water, providing fuels for vehicles, and being used in rural energy supplies. Renewable energy has contributed about 19% of energy consumption globally in 2014 and about 22% electrical generation in 2012 and 2013 (ICREET & In Sun, 2014). The renewal energy exists over wide geographical areas unlike the other energy sources that are limited to specific regions/countries. For this reason, a country’s energy security is guaranteed plus its use is another measure in mitigation of climate change. With such factors held, constant economic development is guaranteed as well as the enablement of lifting poor/developing countries to prosperity (Bryce, 2011). For this reason, one can see how renewable energy has become a challenge to the oil industries.
My second reason as to why renewable energy is seen as a challenge to oil industry is because pollution, climate change and global warming have hiked prices of oil, making renewable energy the cheapest and most reliable option. These and increasing governmental concerns have been some of the backbone reasons and driving force behind the legislation supporting current and future use of renewable energy. Solar power energy, for instance, is potent enough to produce the world’s electricity in /within 50years, hence reducing emissions of greenhouse gases (Singh, Pant, & Olsen, 2013). In addition, biogas has been used in many households for lighting and cooking purposes. Many European countries have increased their renewable energy generation for 2013 and 2014 (Meier, Vagliasindi, & Imran 2015). Among the countries that have made the biggest strides are Belgium, the UK, Poland, and Germany. On the other hand, the administration of Dubai has made great strides with the generation of solar energy, a flagship of which is the Masdar carbon neutral city scheduled to be completed in 2020 (Meier et al., 2015). China has also made significant progress in the generation of both solar and green energy for sustainable development. In Australia, wind power has proven to be better than coal: likewise, in Texas, it has become widely exploited. About 30 nations worldwide have been able to produce renewable energy, contributing to more than 20% of the global energy supply (Meier et al., 2015). There has also been a projected growth in renewable energy and its supply from 1,700 gigawatts in 2014 to 4,550 of the same in 2040 (Meier et al., 2015). Renewable energy has been foreseen to become cheaper with increasing technological progression. This effect will create mass production and distribution, making it compete effectively with oil as a source of energy in terms of prices. Since renewable energy has lower maintenance cost than that of continuously extracting oil, people and governments will shift to the use of the former (Jakab, 2011). The general effect will be the reduction in costs of energy sources as well as its production. Reduced costs will ultimately lead to a higher scope for economically viable applications.
The third reason for renewable energy be a challenge to oil industry is that fossil fuel, hence the oil industry, is an expensive adventure as time goes by, leading to the adoption of the alternative sources of energy. Since 2014, production and supply of fossil fuels has been seen to be more than the demand, which has reduced prices by close to 50% (Meier et al., 2015). Production of the same has experienced many challenges, including trying to lower the cost of extraction while the depths of oil wells have been increasing. There is an advantage in using renewable power as its costs continue to drop with technological improvements. Renewable energy is a viable source of energy in some locations, especially in the developing countries where transmission and distribution of energy from fossil fuels becomes complicated and costly. As seen earlier, it also has a strategic advantage over fossil fuel in that it can be produced in any country. Fossil fuel production is limited to certain countries rich in the resource such as the countries of the Middle East, making its viability as a source of energy biased. International Renewable Energy Agency (IRENA) has promoted adoption of renewable energy worldwide, facilitating capacity building and energy transfer (Hester & Harrison, 2010). Against all odds, many research works are underway to improve on renewable energy for future purposes (Meier et al., 2015). This has increased the potential of the industry. In addition, because of these research works, it is expected that there will be improved efficiency and increased renewable energy yields in the medium and long run. Some critics argue that renewable energy is variable and intermittent. However, this statement is false since concentrated solar power, geothermal and biofuels are continuous. They produce varied sources of electricity; therefore, they are rendered flexible and resistant to control shocks. Some sources also claim that renewable energy lacks support of the public and community consent. This information is contrary to the fact that there has been an increased market growth of renewable energy owing to reasons such as climate changes, increase of green jobs, high oil prices, oil wars, and oil spillages among others. For the reasons mentioned above, it is quite clear that renewable energy and related projects have surpassed the test of evaluation in terms of merits, that is, environmental soundness, safety, and economic impact (Bigerna et al., 2015).
On the other hand, oil/fossil fuel production has accrued risks and disadvantages ranging from containing lead to being carcinogenic. In cases of oil spillage, marine animals are endangered. Oil distillates also cause birth defects. Benzene is a component of gasoline that causes leukemia and low count in white blood cells in the body, rendering one susceptible to infections (Jakab, 2011). Exhausts from fossil fuel combustion may lead to heart conditions and consequent death. Oil combustion also leads to rise in temperatures, which oxidizes nitrogen, and when oxides of nitrogen combine with sulfur dioxide from oil and water, acid rain is formed. The effects of acid rain are death of trees, fish, and coral reefs. Acid rain corrodes machines, archaeological structures such as marble ruins of Greece and Rome and even modern buildings. Oil production and its use result in climate change and global warming, especially when heat in the earth’s atmosphere is trapped by increase atmospheric carbon dioxide caused by combustion of oil. Volatile organic compounds emitted during production of oil and its by-products have adverse effects on human health and environment (Bigerna et al., 2015).
Therefore, there is unfavorable effect of oil industries to health, environment and economic growth in governments. Due to these effects, environmental activists and the general members of public have shown their will to replace extraction and consumption of oil over time (Bigerna et al., 2015). In the meantime, oil should be used more efficiently through advanced technology; however, this will render its production costly. Reducing the risks of spills is cumbersome, adding to the fact that cleaning up oil spills is expensive and time consuming. The only safe and economical option would be to substitute oil energy over time with the use of biomass, solar, wind, hydro, and geothermal energy (renewable energy). In 2000-2010, the United States devoted a fifth of its investments in renewable energy: this was a significant and cost effective climate action (Meier et al., 2015). Economic tides are turning in favor of renewable energy over fossil fuels in many other countries as seen earlier.
Investments in renewable energy will eventually reduce funding for oil development, especially with current climate conscious society and decision makers. On the other hand, large financial associates of oil and gas sector may not readily accept this change; however, they may invest in the more environmental friendly and economically sustainable renewable energy with time. Current project evaluation regulations require the developers to demonstrate contemplation to adopt the most energy efficient alternative and adopt maximum reduction greenhouse gases for their projects to be approved. For these reasons and others discussed earlier, it is shown that advance in renewable energy will ultimately be the most significant challenge for the oil industry, hence is my complete support of the topic.