Energy in a Post-Pandemic World
Energy analysts have long assumed that, given time, growing international concern over climate change would result in a vast restructuring of the global energy enterprise. The result: a greener, less climate-degrading system. In this future, fossil fuels would be overtaken by renewables, while oil, gas, and coal would be relegated to an increasingly marginal role in the global energy equation. In its World Energy Outlook 2019, for example, the International Energy Agency (IEA) predicted that, by 2040, renewables would finally supersede petroleum as the planet’s number one source of energy and coal would largely disappear from the fuel mix. As a result of Covid-19, however, we may no longer have to wait another 20 years for such a cosmic transition to occur — it’s happening right now.
So take a breath and, amid all the bad news pouring in about a deadly global pandemic, consider this: when it comes to energy, what was expected to take at least two decades in the IEA’s most optimistic scenario may now occur in just a few years. It turns out that the impact of Covid-19 is reshaping the world energy equation, along with so much else, in unexpected ways.
That energy would be strongly affected by the pandemic should come as no surprise. After all, fuel use is closely aligned with economic activity and Covid-19 has shut down much of the world economy. With factories, offices, and other businesses closed or barely functioning, there’s naturally less demand for energy of all types. But the impacts of the pandemic go far beyond that, as our principal coping mechanisms — social distancing and stay-at-home requirements — have particular implications for energy consumption.