E Does The Low Oil Price Mean The End Of Renewable Energy?

Does the current low oil price environment mean the end of alternative energy? Some investors are afraid that consumers and companies will turn away from clean energy.

Low oil prices are good for our wallet, but the real costs of oil are the damage that is done to our climate and health.

The fact that oil production projects are cancelled or on hold is great from an environmental perspective. However, the biggest risk of low prices is that governments, companies, but also ordinary people will pay more attention to the impact of the low oil price for their own sake.

We all need to focus on improving our climate by driving a cleaner car, using cleaner fuels or other ways to improve the world we live in. Energy companies, also have to take their responsibility and help to ensure that major new oil projects that harm the environment are never initiated going forward. Those companies should instead, invest in alternative energy.

Even Royal Dutch's (RDS-A, RDS-B) chief Ben van Beurden acknowledged the fact that they have to take their responsibility. In their own quarterly magazine the following was said.

In the interview the CEO of Royal Dutch Shell is saying that his company can develop new cleaner fuels. Also, he mentions that his company is developing hydrogen as a fuel. He acknowledges that there are enormous opportunities in the development of big, integrated sun and gas systems.

The Paris climate agreement is a great step to a healthier and safer world, because it discourages in some way investments in dirty energy, because of climate commitments.

Low oil prices will discourage new investments in high-cost oil extraction (tar sands), but could also reduce fracking and shale oil projects.

Until now clean energy is driven primarily by policy and not by price. Low oil prices do not make a difference for most renewable energy alternatives because they compete against gas and coal.

To transition to a cleaner and healthier world, we need more investments in renewable energy. The more effective we are, the less we are exposed to the next uptick in oil prices (or gas prices).

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Dutch Trader doesn't have any position in Royal Dutch Shell. Please do your own research before ...

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