Wind, Solar Power Gain While Oil Suffers
This week, we talk about gains for renewable energy and woes for oil even as some Americans are seeing higher prices at the pump.
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Hi, Maitane. Wind and solar power grew at their fastest pace this century last year, the International Energy Agency said. The sunny news for renewables comes as U.S. oil companies are facing a not-so-bright outlook.
The IEA said renewables were the only source of energy that drew higher demand world-wide in 2020 after the pandemic-related shutdowns hit consumption for all other fuels. Governments and companies working to slash their carbon-dioxide emissions have also helped the growth and outlook for cleaner energy.
One example is the U.S.’s first large-scale offshore wind farm: The $2.8 billion Vineyard Wind project off the coast of Massachusetts won final approval from the Biden administration this week. It would provide enough energy to power 400,000 homes and could signal a turning point for offshore wind in the U.S., which has faced more than a decade of resistance.
This is all happening while American oil production is expected to fall again this year. A closely-watched monthly market report from the Organization of the Petroleum Exporting Countries cut its forecast for oil production growth. Shale oil drilled through fracking has also shown few signs of recovery.
Fossil fuels remain however the world’s dominant source of energy. Before the pandemic, oil, natural gas and coal made up 81% of the world’s energy consumption in 2019. The IEA expects that number to drop to 76% by 2030. Still, carbon-dioxide emissions have already snapped back from their 2020 pandemic plunge.
Meanwhile, some drivers along the East Coast of the U.S. are struggling to find gasoline at the pump and are paying higher prices because of a cyberattack that shut down a 5,500-mile conduit run by Colonial Pipeline Co. last week. Colonial said it hoped to substantially restore service by the end of the week. Oil demand is also up because more people are driving since lockdowns have eased and vaccinations have risen.
That reminds me of how U.S. consumers are generally starting to see sharply higher prices for goods and services. Price tags on things like meat and soap have risen by double-digit percentages from a year ago. The U.S. Labor Department says consumer prices jumped 2.6% in the year ended in March.
A big reason companies are charging more is because costs for oil, crops and other commodities have gone up. Investors and economists are watching whether these higher prices will drive up inflation measures, which have been subdued for years. (Inflation is essentially a rise in prices overall in an economy, which leads to lower purchasing power.) We will see how shoppers deal with this trend.
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Elevate the Conversation is produced by the editorial teams of The Wall Street Journal and Dow Jones Newswires. Here's a little bit more about us, along with our contact information. We'd love to hear from you.
Dieter Holger, Reporter: I have a knack for uncovering values-based investing trends and I’m obsessed with spreadsheets and charts. I really enjoy ‘80s music and skateboarding (but I suck). dieter.holger@wsj.com @dieterholger
Maitane Sardon, Reporter: I have a passion for amplifying the voices of those at the center of stories. I love running on Barcelona’s beaches and binging on chocolate ice-cream to compensate (it’s all about balance). maitane.sardon@wsj.com @sardonmaitane
Catherine Lindsay, Editor: I like breaking down complex ideas and explaining them. On the weekend, you’ll find me wandering the city with my film camera at the ready. catherine.lindsay@wsj.com @CathsLindsay
Tammy Lian, Designer: As a visual producer, I'm always excited by the challenge of creative problem solving. In my spare time, you can usually find me taking care of my ever-growing collection of plants and drinking tea. tammy.lian@wsj.com @violian.tammy