In the last couple of months, the global energy industry has been flipped on its head. As the novel coronavirus pandemic ravaged economies around the world, the energy industry took a particularly brutal hit, made infinitely worse by an oil price war between the leading OPEC+ countries of Saudi Arabia and Russia. In the severe global crude oil glut that ensued, oil supply soon threatened to overtake available worldwide storage capacity, plunging the West Texas Intermediate crude price well below zero, in a historic upset that sent serious shockwaves through global markets.
The severity of this oil price crash and pandemic panic means that ‘business as usual’ is no longer an option. The global energy sector is at a historic crossroads in which some big, world-altering decisions will have to be made and unprecedented international collaboration will be essential in order to stabilize markets. Until now, there has never been a disruption to the status quo large enough to enable any serious re-thinking of the way we power our world, but coronavirus has given us that unthinkable pause.
A report this week from the World Economic Forum highlights this unique opportunity, positing that “the crisis offers an opportunity to consider a new energy order to enable the energy transition in a sustainable way.” Critics of fossil fuels and Big Oil have been overpowered and drowned out by the momentum of the machine and the unshakable inertia of business-as-usual. Maybe an apocalyptic global pandemic is what it takes to truly divest from fossil fuels and redirect the sector.
“Though this is the worst possible way to begin a decade, the coronavirus pandemic and the collapse of oil prices also offer an opportunity to consider unorthodox intervention in the energy markets and global collaboration to support the recovery phase once the acute crisis subsides,” states the World Economic Forum. “This giant reset grants us the option to launch aggressive, forward-thinking and long-term strategies leading to a diversified, secure and reliable energy system that will ultimately support the future growth of the world economy in a sustainable and equitable way.”