The energy sector is extremely important for any country. From gas to electricity, the modern global economy runs on energy and its uninterrupted supply. Throughout the past century, many countries made enormous fortunes out of the energy sector, particularly fossil fuels. The entire region of the middle east achieved its undeniable success thanks to the massive oil resources that can be found within the area. However, things are changing and it is affecting investor confidence in the sector.
Many people do not realize that even some of the most progressive and developed countries today achieved where they stand today through the exploitation of fossil fuels and natural resources. The United States is one of the best examples. The world’s most powerful economic and military power made its fortune with the vast use of fossil fuels. As the US fuel reserves started fading away, the country began importing crude oil from numerous Middle Eastern and African nations. As a result, many countries, particularly in Africa depend on the US export value almost entirely. This is the reason why the US crude oil price plummeting earlier this year had a major impact on numerous nations all over the world.
Oil remains an important part of the global economy. With billions of cars, factories, and individual or corporate systems to drive, this resource truly fuels the growth in all aspects. However, this dominance of oil is coming to an end. The new millennium brought in some never-seen-before challenges to the table. Climate change is already affecting millions of individuals, especially those residing in coastal communities. According to numerous scientific papers, communities near waters, including some major cities such as Amsterdam or Venice are at great risk of simply disappearing if climate change continues.
The youth movement started by Gretha Thunberg revolutionized the world. School strikes that the young global activist started in her native Stockholm spread all across the world with tens of millions of active participants. The youth demand climate justice and they are achieving a lot by pressuring governments, companies, and influential individuals.
The change is coming and it is quite visible
Climate change is not an issue that can be tackled overnight. Winning over this major problem requires a complex approach and joint efforts from the governments, businesses, and individuals. Fossil fuel companies are under enormous pressure now. Being in the sector is extremely unpopular and the stock values reflect on the current situation perfectly. The first important step forward in creating a greener, renewable source of energy that will be efficient and cheap. This is exactly what numerous companies all around the world are doing, including the Italy-based Enel. the latter has always been a renewable energy-oriented company but in recent years, along the waves of protests against fossil fuels, the Enel Group has almost completely abandoned natural gas. Instead, this major corporation with revenues exceeding 73 billion euros is investing heavily in renewable sources of energy. Most notably, Enel is currently working on a number of major solar farm projects all around the world, including one in India.
The example of Enel shows how companies within the fossil fuel industry can transform into green businesses. The enormous wealth that oil corporations own ensures the possibility of investments in the green energy sector. Surprisingly, this is what some of the biggest state-controlled corporations have been doing in the Middle East and Asia.
Oil exporting countries are trying to diversify their economies
Everything with this topic is interconnected. The changed attitudes towards fossil fuels have forced many countries and companies to shift from oil production to investing in green, renewable energy. Middle Eastern countries like Saudi Arabia and the United Arab Emirates skyrocketed their wealth over the past few decades through oil production and exports. Those nations managed to become some of the richest over the course of 30 years while beforehand, the vast majority of them fell under the umbrella of the third world. Dubai, which used to be a fishing village is now one of the richest, thriving metropolises in the world, attracting millions of people annually. The proportion of migrants is also growing in those nations amid attractive job opportunities and dynamically developing economies.
However, the governments of Middle Eastern oil magnate nations have realized that the fossil fuel industry will not support their growth for much longer. Innovations from Tesla and other companies show that the future without oil is closer than we might have expected. Additionally, the global social attitude towards oil companies has become quite bold, putting extra pressure on companies and economies. This is the very reason why countries like the United Arab Emirates are investing in green projects, such as solar energy plants, electric public transport networks, and sustainable buildings. The diversification of those economies goes beyond the energy sector, pushing for fostering industries like tourism and services. All in all, the entire energy sector is striving towards a greener future and the investors are responding positively to it.