Alternatives of Global Energy: Transformational Trends and Risks

The article contributes to the literature in three main areas. First, new tendencies and challenges of development of world economy and energy caused by the crisis induced by the COVID19 pandemic are revealed, including: the regionalization of markets that creates additional basis for development of multipolar world; the aggravating instability of the alternative energy; the rising risks of disruption of long-term stability of oil supplies due to the underinvestment and risks of sharp oil and gas shortage; the tendency to the consolidation and enlargement of producers in oil and gas sectors, what is also increasingly possible in the Russian oil and gas industry. Second, perspectives of “green” energy to become a basis for development of world economy are analyzed. Obstacles to continuing development of “green” energy are stressed, including: the necessity of extraordinary large investments in development of economically feasible technologies; the expected acute deficit of materials for energy transition, including lithium, nickel, cobalt and other metals as well as low economic efficiency of low carbon solutions placing additional burden on consumers. The thesis of urgent importance of balanced energy development and inadmissibility of relying exclusively on alternative electricity generation is advanced. Third, shifts in strategies of global investors who presently pay the increasing attention to ecological programs, investing into carbon neutrality, green rebranding and shares buyback schemes at the expense of the fundamental financial and operational indicators. Combined with cases of court interventions in corporate decision making that exerts pressure on public companies who are forced to abandon oil and gas projects. The article argues that such an optimization doesn’t solve the task of global reduction of greenhouse gases emissions and achieving carbon neutrality. A tendency for issuing of new instruments and emergence of new models of investment behavior which distort the share prices is discovered. Meantime companies with state participation and private companies are less dependent on the volatile expectations in the stock market. The article also considers the issue of ecological purity of oil and concludes that introduction of transparent system of evaluation and certification of goods and services, recognized by the whole world community is expedient.