Has the plunge in demand for oil caused by the pandemic fixed the climate crisis? Definitely not. But it has accelerated the oil industry’s plans to shift away from fossil fuels and carve out a future in clean energy.
Bernard Looney, CEO of BP, summarized the changing environment well when he said, “What the world wants from energy is changing, and so we need to change, quite frankly, what we offer the world.”
Just this year, the oil giants, especially in Europe, have accelerated their production of cleaner energy. They are to begin a more robust transition from oil and coal to renewables.
Just since January,
- Royal Dutch Shell won a deal to build a vast wind farm off the coast of the Netherlands.
- France’s Total, which owns a battery maker, agreed to make several large investments in solar power in Spain and a wind farm off Scotland.
- Total bought an electric and natural gas utility in Spain. It will join Shell and BP in expanding its electric vehicle charging business.
- Shell will delay new fields in the Gulf of Mexico and in the North Sea.
- BP has promised not to hunt for oil in any new countries.
Electricity and hydrogen are most likely the key to these strategies.
There is opportunity for change. Will these companies follow through on their pledges and use this transition point to actually transition their business models?
Only time will tell.