Almost a year ago, in the middle of the corona virus pandemic, oil price on the American market became briefly negative. In reality, it was a quotation on future markets but that was showing the gap between the too much abundant supply and a weak demand. Stocking capacities were saturated and so buyers were ready to pay in order they were allowed to renouncing to take the deliveries of the black gold they acquired some months before at the agreed date. That unprecedented situation was frequently interpreted as the first signal of the decline of that raw material until then considered as essential and the result of a turnaround caused by the taking into account of the dangers generated by the climate warming, mainly generated by fossil fuels consumption. The theory of the “demand peak” thought to find there its validation.
Half a century before, experts of the “Roma club” had, them, considered that it will not be possible, due to the oil growing scarcity, to produce more than 85 million barrels per day. They concluded that we will be soon confronted with a “supply peak”. Facts proved they were wrong since consumption in 2019 was near 99 million barrels per day. Companies have continued to explore undergrounds, to find new oilfields and to exploit them. But the main factor was the emergence of new extraction techniques. It was, from 2010, the oil and natural gas shale revolution, concentrated first in the U.S. but which China has now started to use that technology.
So it is not surprising that the strong rise of American production, when it has been confronted to recession caused by the pandemic, has lead to the sharp oil prices fall. But it is not frequently enough mentioned that the increase of the natural gas production through that technique has allowed the high reduction of coal utilization in power production and the equivalent diminution of American CO2 emissions these last five years. So, it is quite also logic that the current economic rebound in the U.S. and the strong China growth, which is the most important oil importer in the world, have generated prices rise because these ones reflect the balance, at a given moment, between supply and demand and not the anticipations we can make about the realization, or not, of the long term objectives regarding the planned end of fossil fuels. Brent price has reached, on February 5th, 59.40$ on the European market.
Weather conditions, with the severe cold wave which is hurting Northern States in the U.S., have amplified the turnaround of economic anticipations and so contributed to the strong rebound of oil prices on every markets. The announcements of the new American president, with the adoption of restrictive measures regarding oil production (abandon of the Keystone pipe-line, prohibition of new drills in federal territories) are giving evidence of his commitment in favor of climate. But recent events show that this policy doesn’t influence fossil fuels demand. It only remains connected with economic activity and weather circumstances.
American people, no more that other countries inhabitants, cannot afford having no energy when they have the necessary revenues to get it. To drive their choices in order to meet climate objectives can have two forms. To proceed to the investments or to the replacement of the goods they use in order, with an equal quality, to consume less energy and to emit less greenhouse gas. But the result is slow to produce effects because we act on the number of homes. When, in France, it is promised to proceed to hundreds of thousands of homes thermal renovation every year when there are more than 30 millions houses or apartments, that means it will take a century to renovate them and that the accomplished progress regarding energy savings is about 1 or 2% per year. This reasoning can be applied on the same manner to private vehicles and the efforts in favor of electric cars are having no effect if power production remains dependant of polluting techniques.
The second option, which is quite also present in public declarations and in political decisions, is about the development of renewable. But it is facing a major obstacle: these power sources are intermittent. They are not able to produce when we need them, during the night or when there is no wind. The only renewable power source which is not subject to that constraint is the hydraulic one. But in France, as in many other countries, most of the sites are equipped. To build new ones will meet strong oppositions from concerned populations and ecological movements, which is not the least paradox. It is sufficient to remember what happened at Notre-Dame-des-Landes when it was proposed to build a new airport. The current heavy rains which are affecting France now are yet carrying a positive aspect, which is rarely mentioned: power produced by the dams which are abundantly filled will allow to reducing the production of thermal power, and so CO2 emissions, in the coming months.
The fossil fuel global rejection is counter-productive. These ones will remain during still a long period of time an indispensable source for producing activities as for consumers needs. So energy transition must take that into account and integrate a deep evolution of the respective shares of each fossil fuel, with a reduction as quick as possible of the diesel share in thermal vehicles and of the coal in power production. In the first case, it is also a public health requirement: for decades, fine particles are creating as worry as past and present pandemics. The coal case is even more exemplary. Not only its transport and its combustion are generating much more emissions than any other energy sources, but coal power plants are heavily contributing to the air quality degradation.
Poland and Germany are, in this domain, the Europe bad pupils. The closure of Fessenheim nuclear power plant resulted from the pressure of German ecologists who have found strong supporters in France. That has allowed, at a time when French neighbor decided, which is its right to do so, to close its nuclear power plants, and it is another paradox and not the least one, to keeping into activity several coal power plants in the other side of the Rhine.
The oil market prices rise show that the reduction of its consumption and even less its abandon, are not for tomorrow. In order that energy transition will be a success, it is also necessary to put into practice new rules among fossil fuels. As they are going to stay indispensable for a long time, the better is to favor these which have the less negative consequences on health and which contribute to the slowing of CO2 emissions. To build dams will always arouse oppositions. To build new nuclear power plants will take a lot of time, between eight and ten years in the best cases. To invest in renewable cannot totally provide an answer to the supply safety exigencies. The recourses to the least polluting fuels energies and emitting few CO2 as natural gas must be included in energy transition and constitute a transitory but indispensable step to reach the objectives included in the Paris Agreement.