Paris (AFP)

Paradoxical, but only at first glance: oil, which is always cheaper, and which at times is literally worth less than nothing on the market, should not jeopardize the development of renewable energies, experts believe.

With the Covid-19 pandemic that nailed planes to the ground and shut down factories, demand for black gold collapsed, while at the same time Saudi Arabia launched into a violent price war, increasing its production.

The producing countries ended up agreeing to limit their production a little. Too late: oil remains overabundant, stocks are filling up and prices have collapsed.

Brent from the North Sea was worth less than $ 20 a barrel Tuesday morning: its value was divided by three in three months. In the United States, prices were even temporarily negative: producers or traders were ready to pay to get rid of their barrels.

"Changes in the oil market have repercussions on the entire energy sector," said the International Energy Agency (IEA), which advises developed countries on their energy policy.

"A sustainable period of low prices would affect the prospects for transitions to cleaner energies," she feared.

Very cheap oil in the long term could thus hamper efforts to save energy or develop the electric vehicle.

"If crude oil prices are depressed for a long time, which is entirely possible, electric vehicles will have more difficulty entering the market," said Ryan Kellogg, professor at the University of Chicago.

However, the expert does not see cheap oil fundamentally destabilizing the transition to renewables, "certainly not in the short to medium term".

- Risky oil -

In fact, first of all, "this situation is destabilizing the petroleum industry" itself, adds François Chartier, campaign manager at Greenpeace.

In the United States, the Texan group Diamond Offshore, specialized in deep water drilling, filed for bankruptcy on Sunday.

According to Mr. Chartier, the depressed prices raise the question of the viability of the production of hydrocarbons, the profitability of which sometimes rests on price hypotheses at 50 dollars, on operating scenarios for decades.

However, these prices are less and less guaranteed, not to mention the political pressure for the use of hydrocarbons to decline in the face of the climate emergency.

The risk for oil companies and their shareholders is therefore to end up with assets that have lost all value.

"For an institutional investor, a bank, today new oil projects are super risky," observes François Chartier. Conversely, "investing for the long term, on projects with 30 or 40 years of renewable energy is more of a secure investment".

Renewable energies have become competitive, with falling costs for wind and solar in recent years. And their income is often guaranteed by public authorities (even if there are fewer and fewer subsidies) or by long-term purchase contracts by large companies or institutions.

- Stability against volatility -

The oil and gas giants, which have started to diversify by investing in electricity from renewable sources, do not return to these expenses, despite the sector's historic crisis.

Eni (Italy) will decrease its investments by 30% in 2020, the British BP - which announced Tuesday a heavy quarterly loss of more than 4 billion dollars - by 25%, the French Total by 20% and the American ExxonMobil by 30%.

But "we have secured the budget" for renewables, recently assured the CEO of Total, Patrick Pouyanné, who wants to invest 1.5 to 2 billion dollars in this area this year.

According to him, long-term contracts to supply electricity from renewable sources appear "as a stabilizing factor in our economic model".

"Oil and gas (investment) returns are now in line with what investors can expect from low-risk solar and wind projects," said Valentina Kretzschmar of Wood Mackenzie.

"The energy transition is here to stay," predicts the expert.

© 2020 AFP