Our previous blog mentioned ways energy plays a part in our lives. Now, we’ll go more in depth about the oil industry & COVID-19’s impact. As a result, it is becoming more obvious that we don’t need oil as much as we thought so. We will always use it, but maybe it’s time for petroleum to step out of the spotlight. However, the presidential election will have a say on oil’s future. Here’s what major oil companies have to say about the state of their industry.
Oil’s Current Situation
COVID-19, heightened environmental awareness, and hurricanes have not been kind to the fossil fuel industry. In March, many refineries closed, drastically slowing oil production. July and August brought in a mass amount of hurricanes, destroying rig set-ups. Environmentalists are becoming increasingly concerned about marine oil spills and fracking. CNBC states, “Due to the ongoing impacts of Covid-19, the IEA expects global energy demand to fall by 5% in 2020, with oil and coal consumption falling 8% and 7%, respectively.”
One of Texas’ biggest oil companies, EOG Resources, is determined to make a comeback as they know how crucial oil is for Texas economy. Their stocks are slowly creeping back up, indicating a slow recovery. The Permian Basin is attracting oil business. Right now, oil’s biggest purpose is for vehicles, heating, and producing electricity. So, while oil has dropped drastically, the oil industry is using this time to re-structure business to prepare for less overall production.
Oil Industry Possible Future
It’s quite possible that oil will be replaced by the much more sustainable solar energy. This is due to environmentalism conservative movement and production costs. With that in mind, companies are working towards more safe practices. Drilling is triggering more earthquakes (in Oklahoma) and refineries pollute the air with smoke. Energy experts predict that oil will be replaced by wind & solar energy for electricity production. Meaning, in a few years, oil’s main purpose will just be fueling vehicles and engines. On the other hand, it’s hard to tell. Oil could go right back to pre-March success. After all, oil will always be essential to the energy industry. Here’s more data and statistics explaining petroleum’s projected path to 2050.
Oil’s future also depends on the presidential election outcome. Joe Biden is calling for a major decrease in production, as much as cutting it in half. Contrastingly, Donald Trump wants the economy stimulated in any way he can and will encourage oil to continue on. Will oil be able to conquer the election, environmental activism, and the pandemic? Only time will tell, but we do know that oil will likely never go back to the height it was at pre-March, but it will never completely phase out either.
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