Nothing concentrates minds like a war, along with all the domino effects it precipitates. In a globalised world with (as it turned out) extravagantly overextended supply chains, the effect of 190,000 Russian soldiers occupying a relatively modest proportion of the territory of Ukraine, a country previously peripheral to geopolitical priorities, produced a disproportionate global outcome, nowhere more dramatically than in the field of energy supply and security. Overnight, it became a different world.
Now that the dust has partially settled and the immediate crisis has ebbed, we are beginning to see the new realism generated by this experience reflected in the thinking of key players in the global energy industry. Bernard Looney, chief executive of BP, has provoked consternation in the more dogmatically Green circles by reining back on his commitments to reinvent BP as one of the world’s biggest providers of green energy. Now he is said to be concerned about the returns from BP’s investment in renewables such as wind and solar.
BP shareholders clearly share that concern. With Exxon Mobil, the American oil giant, posting record profits of £56bn as a result of the surge in energy prices, the oil majors are realising how crucial to energy security fossil fuels are and intensifying their focus on what they do best: getting oil and gas out of the ground and into the world’s energy systems. That is eminently sensible and the only cost-effective long-term solution to providing energy security, until more sophisticated technologies release the full potential of renewable energy sources in an economically sustainable manner.
But BP is not withdrawing from renewables: market rumours suggest it has decided to finesse its investment, away from wind and solar, towards hydrogen, biogas, electric-vehicle partnerships and charging networks. But alongside this green transition, it is clear the company, along with the other oil and gas majors, has wakened up to the fact that the transition period from fossil fuels to green energy will last for decades and that hydrocarbons will continue to be profitable throughout that period.
For the full article, please click here or below that the link for the article in pdf:
Write to us with your comments to be considered for publication at letters@reaction.life
Credit: noomcpk via Shutterstock
Comments