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The Fossil Fuel – Green Energy Dilemma Caused By Russia’s Invasion

As Russia’s invasion of Ukraine continues, the world is becoming increasingly motivated to switch to low-carbon energy sources. However, the near-term scramble for fossil fuels is causing billions of dollars of new investment.
There are plans for liquefied natural gas terminals in the U.S. and European countries that will be operational for many years. Coal demand is rapidly increasing globally and American shale suppliers may be needed to fill a potential supply shortage for countries transitioning away from Russian natural gas.
The challenge for the world will be transitioning to cleaner technologies while still meeting current energy demand, executives and investors said Tuesday at BloombergNEF’s annual summit in New York. The process will be bumpy, and it’s not going to happen quickly.
Fossil energy is still needed as we transition to renewable energy sources, according to Keo Lukefahr, head of energy derivatives and renewables trading at Motiva Enterprises LLC. This transition will not happen overnight, Lukefahr said, it will take time.
The gas market has been shaken up as countries look for alternatives to Russia, especially in Europe. However, the current global output won’t be enough and that will lead to investment in new production, particularly in the U.S. shale patch, Anastacia Davies, BNEF’s head of oil supply and U.S. oil, said at the conference.
Although unchecked growth in the U.S. is probably over, that doesn’t mean that shale’s part is finished.
Bertrand Millot of Caisse de Depot et Placement du Quebec believes that the war may also help speed up the transition to green energy. Canada’s second-largest pension fund manager, Millot argues that the war could act as a catalyst for change in the way we get our energy.
As energy security concerns rise, countries are turning to wind and solar farms as a more reliable source of energy. These farms don’t require regular deliveries of fuel, making them a more efficient and cost-effective option.

The Guyana Oil Plan

Guyana has a large amount of oil reserves and is trying to take advantage of the current crisis. One plan is to funnel resources into a national oil company to help meet the demand from developed countries, while also working towards climate goals.
According to Bharrat Jagdeo, Guyana’s vice president, the majority of the demand for their resources comes from developed countries. He believes that there is no betrayal of a net-zero goal if they develop these resources.
That view is not shared by everyone.
“Justin Guay, director of global climate strategy for the climate-justice organization Sunrise Project, said that some energy companies are cynically taking advantage of the current European energy crisis. They are planning costly infrastructure projects that will take years to complete and won’t address short-term needs.”
He said that it will take three to five years to build a new LNG terminal. However, Europe needs a new gas supply by the end of this year.
The Ukraine war has cast a spotlight on the world’s reliance on fossil fuels, but it is also identifying ways to move away from traditional energy sources.
According to Jon Moore, head of BNEF, it can be beneficial to think about the task at hand when everything around you is in chaos.
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