Refllection on Dr Pappa's recent seminar - Junelle Ayettey, intern at UNCLC
Have you ever thought about how Covid-19 relates to energy transition and oil? Have you ever questioned the ways in which the oil sector will have to be resilient due to the challenges brought by the pandemic? Well, Dr Pappa’s presentation outlined the correlation between Covid-19, energy transition and the petroleum industry.
The petroleum industry has been hit hard by the effects of the pandemic and the increasing focus on the energy transition. The energy transition is a move towards renewable energy or becoming climate neutral. This initiative is supported by the global action against climate change. As the energy transition is a noticeable global concern, it seems like oil companies are losing its social licence to operate. Namely, stakeholders are beginning to turn their backs on oil. The North Face, a popular outdoor fashion company publicly announced that they are no longer affiliated with an oil company.
Those who campaign against climate change would argue that the current restrictions have given us a preview of a world with a lower-emission energy system, especially with the decline in pollution world-wide. For example, in a world where travel is restricted for necessity reasons only maybe such pandemic restrictions should remain in the ‘new normal’. This has further pushed oil companies to ‘survival mode’ whereby a more resilient approach has to be taken.
The question raised was ‘should oil companies stop being oil companies in order to survive?’. Dr Pappa’s answer was both yes and no but this does not equate to the oil sector ceasing to exist in the future. This is because the energy transition can take place without the petroleum industry, but it will be costly and time consuming without the use of oil companies. Such that, oil companies have the technical expertise and the capital to facilitate the transition towards a lower carbon system. In addition, Dr Pappa proposed both internal and external actions that oil companies should take. For example, the use of a new energy mix and the review of realistic targets regarding the energy transition after the pandemic. It would be interesting to know other perspectives that students have on this topic!
Another insightful comment about the energy transition was highlighted by the attendees. This involved the impact of the global south in regard to the renewable energy industry. Namely, there has been a push for the use of renewable energy in Africa however there are concerns relating to its longevity. Emerging economies such as those in Africa and Asia rely on hydrocarbons. That being said, a rapid switch to renewable energy will deprive such economies of their incomes and jobs. This shows how the energy transition is more complicated than what is presented face value.
Personally, I do agree that the oil sector is certainly in decline however I believe this is a great opportunity for oil companies to diversify and subsequently become resilient through the use of new energy mixes. This is important as noted within Dr Pappa’s seminar, the energy transition would be a challenge without the know-how of the oil sector. Therefore, the demise of the oil sector would not aid the process of the energy transition.
Arguing whether the oil sector should cease to exist does not aid to the overall argument but rather focusing on what the sector can do to make it more resilient. The oil sector is definitely in decline, but can it survive?
Posted on Thursday 25th February 2021