Actions taken by industrialized nations to lessen global warming by curtailing the use of fossil fuels gained momentum in June 2015.

The leaders of the G7 industrialized nations issued a communiqué calling for the phasing out of petroleum-based energy by the end of the century. Six months later, nearly 200 nations at the COP21 summit in Paris agreed to a goal of limiting global temperature increases to less than two degrees Celsius above pre-industrial levels and to reach net-zero greenhouse gas emissions in the second half of the century.

This deal appears to represent a collective commitment by nations large and small to move away from fossil fuel production and consumption. This anticipated outcome of the meeting did not deter the CEOs of 10 of the world’s largest O&G companies (BG Group, BP, Eni, Pemex, Reliance Industries, Repsol, Saudi Aramco, Shell, Statoil, and Total) from declaring their support for what became the COP21 targets a month before the Paris meeting.

Given the reality of diminished fossil fuel use in the future — and the gradual acceptance of that reality in the energy industry — a slew of questions immediately arise. Will upstream oil companies end up with stockpiles of “unburnable” petroleum reserves? If so, should they abandon all exploration activity? Will downstream refiners need to rejigger their configurations to accommodate more biofuels and emission abatement technologies? Will natural gas–focused companies be better positioned to manage the transition to a low-carbon economy? Let’s aim to answer a few of these questions.

1. Oil is necessary for our global energy supply.

Though there are many environmental agencies that are pushing sustainable energy, oil still accounts for a third of the energy usage throughout the entire world. Because of this, a lack of oil would significantly destabilize many countries. Though sustainable energy may be an option for the future, it is not currently available enough to be relied upon. A lack of oil would be disastrous throughout the globe. This is true not only because of the energy market but also because of local and global economies.

2. OPEC still controls much of the oil supply and cost.

Oil and natural gas is as much political as it is economic. OPEC is a conglomerate of oil producing countries which have traditionally controlled the oil market, thereby “fixing” the price and controlling other national economies.

The United States is presently fighting against OPEC in order to achieve full energy independence and to reduce reliance upon foreign oil. Without the domestic oil market, OPEC would be free to control a much greater share of the entire world’s energy. As noted, oil is necessary for our global energy supply. Without domestic sources of oil, OPEC becomes incredibly dangerous.

3. Oil production reduces gasoline costs.

This is more important than it might at first seem. Traditionally, reduced gasoline costs are directly related to improved economies. The cheaper gasoline is, the cheaper everything is; shipping, travel, and transportation all become far more affordable. Because of this, we can see that as the oil and gas market builds, local economies and the national economy also recover. If oil production wanes (and prices increase), we may likewise see a slowdown in the economy.

4. Oil is an incredibly efficient energy source.

The problem with renewable energy isn’t just about volume, it’s also about power. Solar energy is much weaker than oil power. Even advances within solar technology have not been able to make it a viable contender. Because of this, many companies are now focusing on improving upon their uses of oil and natural gas, rather than trying to eliminate them entirely. Switching to alternative methods of power such as solar and wind power simply is not feasible for the majority of the world.

5. Oil availability is constantly growing.

Oil has long been known as a non-renewable resource, but that doesn’t mean that the supply is dwindling. On the contrary, the availability and supply of oil has been steadily growing. Methods such as hydraulic fracturing have made supplies of oil that were previously unable to be claimed available to be produced. Moreover, advances in technology have made it easier to claim oil from previously depleted wells. Because of this, the actual amount of oil we are able to produce and use is increasing rather than decreasing.

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