By Asitha Jayawardena
For the first time, Monday 20 April 2020 saw the US oil prices becoming negative in 25 years. In other words, the unwanted oil should be removed by the buyers and, for this, producers pay $40 a barrel to pay the buyers, not the other way round.
When the coronavirus started to appear in China in December 2019, oil producers continued to pump oil. When the transport – traffic and air travel – and economies of almost all countries ground to a halt, the demand for oil went down significantly.
Although the US price drop is expected to recover quite quickly, the price of oil remains $20 a barrel in the UK.
Why not green energy instead?
Oil is heavily subsided because it requires inputs such as infrastructure and technology to name a few. With long term coronavirus crisis (although we believe there will not be subsequent waves), oil will go down in demand and the subsidies will do, too.
So why cannot we turn to green energy – solar, wind, hydro, biomass, waves and so on.
According to a report, if we speed up the transition of green energy from now (due to coronavirus) to 2050, we will grow a global GDP of $100tn (£80tn).
While this approach will clean our energy, which we would like to have in next 30 years or so, it will have an effect on global climate emergency as well. If countries will start renewable energy projects, we can get things going while the injection for the coronavirus is found.
Whether the US will take this opportunity will decide on the elections in November 2020. But Europe will take this prospect as the current President of the European Commission, Ursula von der Leyen, believes that Europe should be carbon neutral by 2050.
Finally, when we come out of the lockdown, the way we make the decisions will guide the earth in a green way or not.
Over a barrel: how oil prices dropped below zero https://www.theguardian.com/business/2020/apr/20/over-a-barrel-how-oil-prices-dropped-below-zero
Green energy could drive Covid-19 recovery with $100tn boost https://www.theguardian.com/environment/2020/apr/20/green-energy-could-drive-covid-19-recovery-international-renewable-energy-agency