Perhaps it was tongue-in-cheek, or a way for the leader of the world’s fifth-largest international oil company to emphasize a relationship with consumers. But it’s clear Looney and other oil bosses are struggling to sell their plans for a future in which the world wants more green energy. Last year, for the first time in history, solar and wind made up most of the world’s new power sources, according to BloombergNEF. If the margins on cappuccinos look good right now, that’s an indication of how hard it will be for Big Oil to rapidly ditch its winning formula of drilling, pumping, and refining while spending its way into renewables.
What is the future of Big Oil without oil?
Industry executives insist their legacy business is resilient even as they shift away from oil and natural gas, but their actions suggest otherwise. BP and Royal Dutch Shell Plc have already slashed their dividends—for Shell it was the first time in nearly 80 years. Returning profits to shareholders has long been a pillar of oil’s strength on financial markets. And those like Exxon who are keeping their shareholder payments untouched are taking on far more debt to do so.
The fossil fuel industry as a whole has taken billions of dollars in writedowns, in part linked to the rise of U.S. shale production and the impact of the coronavirus pandemic. If demand peaks earlier than expected, as some in the industry now fear, the most expensive and polluting oil fields such as tar sands in Canada may never be developed. The term of art for these uneconomic oil resources is stranded assets. The consultants at Rystad Energy AS estimate that 10% of the world’s recoverable oil resources—some 125 billion barrels—could become obsolete.
Source: Big Oil goes looking for a career change – JWN Energy
The Slow Painful Death of Fossil Fuel
An article on this site “Freeland, Carney May Be Canada’s Last, Best Chance for a Green Recovery” asks the question for Finance Minister Chrystia Freeland as she settles into her new cabinet portfolio is whether that statement still rings true in the context of a global health emergency, an accelerating climate crisis, a mounting wave of fossil fuel divestment and stranded assets, and the meteoric rise of clean energy alternatives.
Meanwhile, the rest of the world is moving on. The love Canada feels for fossil fuels isn’t shared by other countries and its taking its toll on them. They have to switch gears or die — maybe a little bit of both. See my forum post about the slow painful death of fossil fuels.