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Picture Courtesy: https://www.forbes.com/sites/sarwantsingh/2024/10/14/what-data-reveals-about-peak-oil-scenarios/
Peak oil has the potential to accelerate the transition to renewable energy.
"Peak oil" refers to the point at which global oil production reaches its peak and then begins to decline.
Initially, it was expected to occur when oil reserves were depleted. However, the definition has shifted over time to emphasize "peak extraction," which refers to the point at which oil extraction rates fall due to declining demand, rising costs, and other factors.
In 1956, US geoscientist M. King Hubbert predicted that global oil production would peak around the year 2000. His prediction was based on statistical modeling of the available oil reserves at the time.
While production from easily accessible reserves peaked in the early twenty-first century, new technologies such as fracking have allowed oil production to rise, reaching 96.4 million barrels per day by 2023.
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Fracking involves injecting water and chemicals into rock to create cracks that allow oil and gas to escape. |
"Peak extraction" refers to the point at which oil extraction rates stabilize or begin to decline due to factors such as reduced demand and higher extraction costs. It differs from the term "peak oil," which previously referred to the depletion of oil reserves.
In 2023, the global increase in renewable energy capacity set a new record, representing the fastest growth in two decades and surpassing fossil fuel power generation.
According to the International Energy Agency (IEA), renewable energy now accounts for more than 30% of global electricity generation, with solar and wind energy playing significant roles.
According to the IEA's 2024 World Energy Investment report, funding for clean technologies surpassed fossil fuel investment for the first time in 2023, and is expected to reach $2 trillion this year.
The IEA predicts that global demand for fossil fuels will peak by 2030. After 2030, justifying new fossil fuel projects may become more difficult due to economic and environmental considerations.
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Why do some oil companies continue to invest in fossil fuel projects? Many oil companies continue to invest in fossil fuel projects despite the rise of renewable energy options because they depend on continuous oil profitability, mainly in developing economies where fossil fuels are still a significant source of revenue. However, as renewable energy costs fall, these investments may become stuck assets. |
The transition from fossil fuels to renewable energy is complicated because some industries, such as shipping, aviation, and cement production, are difficult to decarbonize.
Renewable energy sources such as wind and solar are unreliable, requiring effective storage and transportation solutions before fossil fuels can be completely phased out.
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PRACTICE QUESTION Q.Critically analyze the potential environmental and economic consequences of continuing fossil fuel extraction. (150 words) |
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