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In the mid-20th century, nuclear energy was seen as a promising new technology that could provide a limitless and clean source of power. The first nuclear power plant was built in Obninsk, Russia in 1954, followed by the UK in 1956 and the USA in 1957 and by the 1960s, nuclear energy had become an important part of the energy mix in many countries.
However, the 1970s saw the rise of the environmental movement, which brought attention to the potential environmental and health impacts of nuclear energy, such as the risk of accidents and the disposal of nuclear waste. This, combined with the high cost of building and maintaining nuclear power plants, led to a slowdown in the construction of new plants.
At the same time, the world was experiencing a boom in oil and natural gas production, particularly in the Middle East. These fossil fuels became more readily available and relatively cheap, leading to a shift in global energy consumption away from nuclear energy and towards oil and natural gas.
The ´70s oil crisis had a significant impact on the global energy market, leading to a shift away from oil and towards other energy sources such as coal and natural gas as alternatives to oil, and there was also a renewed interest in nuclear energy and renewable sources like solar and wind power. The crisis also led to a greater emphasis on energy conservation and efficiency.
After the oil crisis, of the ‘70s, Oil & Gas continued to be the main source of energy due to a number of reasons and one of them was that oil and natural gas were relatively cheap and widely available, especially in the Middle East, where a large portion of the world’s reserves was located. Adding to that, the infrastructure for producing, distributing, and consuming oil and natural gas was already well established, making it easy to continue relying on these energy sources.
Another reason was that the technology for extracting and producing oil and natural gas improved over time, making it more cost-effective to extract these fossil fuels. This led to an increase in production and a further decline in prices. Finally, the development of new technologies, such as hydraulic fracturing (fracking), made it possible to extract oil and natural gas from previously inaccessible reserves, further increasing the global supply of these energy sources and even changing the global scale of distribution of oil & gas producers.
As a result of these factors, oil and natural gas remained the primary sources of energy for much of the late 20th and early 21st centuries. It wasn’t until the late 2010s that renewable energy sources like solar and wind power began to become more competitive with fossil fuels, and there was a greater emphasis on reducing carbon emissions to address climate change. This has led to a shift towards clean energy sources in recent years.
Today, oil and natural gas continue to be the dominant sources of energy, accounting for more than 50 per cent of global energy consumption. However, the use of nuclear energy has seen a resurgence in recent years as countries look for ways to reduce their carbon emissions and transition to clean energy.
Albeit we are seeking the clean energy path we still need to tackle ways to reduce one of the biggest contributors to emissions which is coal as the usage has increased despite the fact that nations have been keen on diminishing it – as an example, the total amount of coal used by China surpasses that of every other country in the world combined in the last 10 years.
Energy security has also become an important concern in the past year due to global geopolitical issues. Even those who are strong advocates of the transition to clean energy, such as Elon Musk, recognize the need to approach this transition in a responsible way. This means finding ways to support the oil and gas industry in reducing its carbon footprint and curbing emissions, while also transitioning to cleaner sources of energy.
“Energy security has also become an important concern in the past year due to global geopolitical issues”
Oil and gas production also produce emissions, but transitioning to cleaner sources of energy will ultimately be necessary for the long term. It is important to find a balance between these competing priorities and move forward in a way that addresses both energy security and the need to reduce emissions. It must be clear that this is a requirement so that the concept of Energy Security is well established in all nations in order to avoid what we see today, especially in Europe due to choices made more than a decade ago by the governments.
This new energy security crisis has led to changes in the way Environmental, Social and Governance (ESG) financing is approached towards these projects. With the increasing need for energy security and diversification of energy sources, there is a growing emphasis on funding projects that promote sustainable energy production and consumption, such as renewable energy and energy efficiency projects. Additionally, there may be an increased focus on ESG factors related to energy security, such as the resilience and reliability of energy infrastructure. This could include investment in technologies that improve the security and stability of energy supply, such as smart grid systems and energy storage solutions and also oil & gas related, since Gas is always portrayed as the pillar of the energy transition, especially with the new way to tackle CO2 emissions with Carbon Capture projects.
So, the past history has shown us how we need to take a responsible approach to the Energy Transition and be clear about the goals but also be responsible and truthful to the target dates set so as not to create some unreachable goals.
Ultimately the message is about reaching our objectives but with a sensible approach, making use of all that is here NOW in order to be able to accomplish our TOMORROW goals as we have set relying not only on the new frontier of renewables – which takes time to develop – as well the ones already existent but done in an improved way.
