I don't think there's an actual shortage of production capacity; just a short term misalignment with some countries having agreed earlier to produce less so prices could go up. Oil companies in the US in particular seem sensitive to low prices as their cost is high. E.g. a lot of fracking activity stops being profitable around a 30-40$ oil price. Current prices are of course great for such companies and they probably will end up having a great year.
But lets not get carried away, these might just be short term effects and once the Saudi's and whomever else picks up the slack, prices might drop just as rapidly as they've risen. Also, the Russians might re-appear on the market if they manage to come to some diplomatic resolution. Either way, the current shortage might only be temporary and could easily turn into a surplus.
And of course a long term effect of the current high prices is an acceleration of the move to renewable energy. If you are still burning oil or gas, you are at the mercy of market prices. And that looks to be like an expensive thing right now. The long term effect of people needing less oil and gas is fierce competition among oil and gas producers for a shrinking market. So, adding more production is not really necessary if demand starts dropping instead of increasing (which it has historically done). That might be sooner rather than later.
EV production is currently millions of vehicles per year and will soon hit tens of millions of vehicles per year and eventually ICE vehicle production is going to be less than half of the market a few years later. That's a lot of petrol and diesel that won't be needed any more.
> If you are still burning oil or gas, you are at the mercy of market prices.
industrial uses of oil and gas, not just as an energy source, but as feedstock, is not easily abated with renewables.
I think that residential and may be some commercial heating with gas could be replaced in the short and medium term with electricity, which then makes renewables possible for these use cases. But a factory making steel beams or something would require gas heating because it is built into their production process, and changing that over would basically mean re-designing and re-engineering the factory! I dont think that can be done in the short to medium term at all, even if they start planning today.
There's still a good half-century of life left in oil and gas imho, and that's not including the emerging economies' needs in the future as they develop.
Steel manufacturing emissions are indeed enormous, but can be significantly curtailed, especially if you're willing to accept higher steel prices as a result (or of course regardless, if you have carbon pricing so that existing techniques are expensive)
High prices also incentivize re-use and re-cycling. If it's cheaper to buy brand new steel beams and drop the ones from the old building into a landfill, that's what people will do, but if that costs twice as much, the new building will have old (or at least recycled) beams, same way England is full of houses that are say 150 years old but have 200 year old timber because timber was expensive then and so they re-used it.
Ultimately, even if our society insists on ignoring the crisis, Mother Nature isn't fooled, our borders will be overwhelmed by people fleeing the destruction of their homes, in many places summer temperatures will be unbearably hot, and all this acts as a permanent reminder that we fucked up, which can't help but spur (even if belated) policy change.
But lets not get carried away, these might just be short term effects and once the Saudi's and whomever else picks up the slack, prices might drop just as rapidly as they've risen. Also, the Russians might re-appear on the market if they manage to come to some diplomatic resolution. Either way, the current shortage might only be temporary and could easily turn into a surplus.
And of course a long term effect of the current high prices is an acceleration of the move to renewable energy. If you are still burning oil or gas, you are at the mercy of market prices. And that looks to be like an expensive thing right now. The long term effect of people needing less oil and gas is fierce competition among oil and gas producers for a shrinking market. So, adding more production is not really necessary if demand starts dropping instead of increasing (which it has historically done). That might be sooner rather than later.
EV production is currently millions of vehicles per year and will soon hit tens of millions of vehicles per year and eventually ICE vehicle production is going to be less than half of the market a few years later. That's a lot of petrol and diesel that won't be needed any more.