• Oil slump not necessarily bad news for climate

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    PARIS: Since the 1970s, the renewable energy sector has usually trembled each time oil goes through the “bust” phase of the commodity cycle.

    When crude was dear, users became interested in wind, solar and hydro.

    But when oil became cheap, they gorged on it once more, turning their backs on novel, cleaner but costlier alternatives.

    Today, oil is again in the doldrums. It plunged by 60 percent in price between June 2014 and January, falling to just over $40 a barrel, before pulling back to around $60 today.

    So does this herald another crisis for green energy, further complicating the fight against carbon pollution?

    Not necessarily, say observers.

    Lower oil prices may indeed lead to more emissions in the transport sector, where electric vehicles have struggled to penetrate even at times of high pump prices, they say.

    Transport accounts for around 14 percent of the world’s annually tally of greenhouse-gas emissions.

    As the cost of petrol (gasoline) falls, “people drive more, and tend to buy thirstier cars,” said Pascal Canfin, a climate expert at the World Resources Institute (WRI) think-tank.

    Fossils vs. renewables
    But the picture is different when it comes to energy production, which contributes to 35 percent of world emissions.

    “In most [electricity]markets, renewables are not competing with oil, they’re competing with natural gas and coal,” said Alden Meyer, an analyst at a US NGO, the Union of Concerned Scientists (UCS).

    The question whether gas and coal will track oil in its extreme movements is unresolved for now, said Canfin.

    But already, more and more high-end oil projects — deeper-water and marginal fields and tar sands, for instance — are being shelved.

    Oil investment around the world is likely to fall this year between 10 percent and 15 percent, the specialist bank Evercore IS forecasts.

    Advocates of wind say unit costs of their technology are falling, which makes turbines better able to withstand a fall in fossil energy.

    In 2014, 51,477 megawatts of wind-generated capacity were added, a record increase of 44 percent over the previous year, according to the Global Wind Energy Council (GWEC), the industry’s lobby.

    AFP

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