The energy sector and C19

Question 1

What happened to FFs (oil and gas) during the height of the pandemic?

Give 4 points.

Answer 1

The oil market crashed:

• Lockdown measures meant supply massively outstripped demand
• This meant the price fell below zero: US crude oil fell to negative price for the first time in history
• Stockpiles overwhelmed storage facilities
• Producers had to pay to dispose of excess product

Question 2

What happened to renewables during the pandemic?

Give 4 points.

Answer 2

• Investment and installation of clean tech slowed
• However demand is still predicted to have grown this year
• Investment/installation predicted to recover rapidly (late 2020/early 2021)
• Although supportive government policies are needed (but this seems to be happening, especially in Europe)

Question 3

What effect has the pandemic had on investment in FFs vs. renewables?

Give 4 points.

Answer 3

• Highlighted the volatility of the FF market: FFs not resilient to global crises = risky investment
• Renewables resilient to global crises = safer investment
• Investors choosing to divest from FFs/invest in renewables

Question 4

What effect will the pandemic have on the FF industry?

Give 4 points.

Answer 4

• It may never recover to pre pandemic levels
• C19 has highlighted the FF market’s volatility in global crises
• Investors are pulling their support (divestment) or demanding Big Oil account for CC risks (engagement) (CC is an impending global crisis)
• Many Big Oil companies had already begun diversifying their product (e.g. BP, Shell) but this trend will increase after the events of C19

Question 5

How might air pollution affect public health?

Answer 5

It could exacerbate the current C19 pandemic

It could cause further health epidemics like respiratory disease or mental health crises (depression)