If you drive a vehicle that uses gasoline or diesel, you have noticed the recent price spike.
The war in Ukraine is having ripple effects on energy throughout the world. The price of crude oil worldwide has risen to levels not seen since 2008, which causes gas prices to rise.
The president has banned Russian oil imports in the United States. Energy independence is being discussed by countries all over the world. One would think that means that green energy solutions would be front and center, but as with everything else, it depends.
Produce More Oil?
In the short term, oil producers are being asked to ramp up production to meet the short-term energy needs of nations that can no longer rely on imported Russian oil. According to Secretary of Energy, Jennifer Granholm, “We are on war footing – an emergency – and we have to responsibly increase short-term supply where we can right now to stabilize the market and to minimize harm to American families.”
Oil producers are not immune from the factors that will make that difficult to do. Labor shortages make it difficult for them to hire the workers necessary to ramp up production, and many oil and gas workers are transitioning out of fossil fuels and into jobs with less volatility than the boom-bust oil industry. Materials and equipment are difficult to procure due to ongoing supply chain issues.
Drive Electric Vehicles?
Consumers may be moved to consider an electric vehicle the next time they are in the market for a car or truck. Gas prices of over $4 per gallon make driving a large, combustion engine vehicle much more expensive. The reasons for considering an EV vary from those who like to be early adopters, to a percentage that does it for climate change reasons. The vast majority of those who are now considering an EV are doing so because of rising fuel costs.
However, cars and trucks only account for about 20-25% of the world’s petroleum. EVs won’t make a sizeable dent in the demand for oil, although they are a solid choice.
Diversify
While it is true that ramping up oil production may ease the current shortage due to global events, real energy independence means moving away from fossil fuels. Power from the sun, wind, waves and other cleaner sources aren’t as easily politicized as oil. As the technologies become more mature and investments in upgrading the power grid are made, these energy sources will prove to be more reliable and resilient to global upheavals, as well as reducing the emissions of greenhouse gases.
We knew that the energy transition would include fossil fuels for the short term, but perhaps we should take a page from investment portfolios. We need to diversify. Then, when one source of energy is compromised, the other sources will step up and provide what is needed. If governments and major corporations step up to invest in diversifying our energy and storage portfolio, we can begin to meet the needs of consumers who need energy, companies who need to show a profit, and, perhaps most importantly, the planet which needs less greenhouse gas emissions to continue to support life.
