The surge in crude oil prices past $100 a barrel has raised a big question: Will this latest spike in the notoriously volatile oil market help to speed the global transition from fossil fuels to cleaner energy sources to fight climate change?
On the one hand, energy analysts say, soaring prices for gasoline, diesel and other products made from crude oil will drive cost-conscious consumers more quickly into electric vehicles and boost investment in competing clean technologies like hydrogen.But at the same time, these high prices will also drive more drilling of oil and gas around the globe, as fossil fuel companies rush to cash in, sowing the seeds for the boom to turn to bust. That will make oil abundant and affordable again.
And the Paris-based International Energy Agency, the industrialized world's energy watchdog, has said rising oil prices could increase the pace of electrification of the transport sector and also accelerate the transition to renewable power sources like solar and wind, whose costs have dropped in recent years.
Analysts also point out that cars and trucks only burn about 20-25% of the world's petroleum, with other sectors such as manufacturing, marine transport, aviation and agriculture making very few gains in fuel efficiency. The governments of Saudi Arabia, Russia, Iran and Iraq all quickly get richer when oil prices rise because they are among the world's lowest cost producers of crude, a trend researchers say deepens commitments to the petro-economy.
There is some nuance, though: Saudi Arabia, for example, is leading an effort to generate hydrogen produced with green energy like wind and solar at its mega city of the future NEOM, a project that it is funding with petrodollars.
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