The coal and OG industries are experiencing a period of disturbance. Demand for cleaner, low-carbon electricity drives a switch away from coal and oil to natural gas and renewable energy. As global energy demand increases and the energy mix emerges, the coal and OG industries must adapt or face the risk that their assets may be stranded as fossil fuels are phased out.
FREMONT, CA: For many decades, the electricity that powers the lives, from phones to homes to the factories, was initially produced by burning coal and oil. As the demand for energy enhanced, extractive industries like coal and OG increased. Below given are some of the challenges faced by the energy industry.
Failures and Supply worries
As renewable have flourished market share at the expense of fossil fuels, the total market has shown a rapid enough to increase the demand for oil, gas, and coal. Some industry analysts recently raised alarms about the availability of supply to meet the expanded market. In the wake of the financial crisis, investment in the coal and OG industries fell, and discoveries declined. In many areas, investment has not recovered to pre-crisis levels, suggesting supply growth will be limited.
Coal and OG organizations face multiple strategic challenges. Over the long-term, the world is shifting from fossil fuels to renewable. At the same time, medium-term demand means that significant investment is needed to maintain supply. It raises the specter of stranded assets. The OG firm that owns the asset may find that it no longer produces fuel but requires further investment to decommission or clean it.
In recent decades, growing concern about the impact of carbon emissions on the climate has led to a shift in the energy mix. It has swiftly replaced coal as the fuel of choice. The switch has hit the coal industry hard and put pressure on OG firms to produce more natural gas. As renewables continue to grow, and climate concerns become more prominent. Coal and OG firms will come under increasing pressure to adapt to the changing energy mix.
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