Full Title: The Role of Oil and Gas Companies in the Energy Transition
Author(s): Robert J. Johnston, Reed Blakemore, and Randolph Bell
Publisher(s): Atlantic Council Global Energy Center
Publication Date: January 28, 2020
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As the third decade of 21st century begins, the oil and gas industry faces opposition from a public greatly concerned with the environmental impact of fossil fuels, ever-more skeptical shareholders, and challenges from policy makers seeking to simultaneously meet decarbonization goals and expected oil and gas demand. Amidst a global energy transition, the demand, financial, and social future of oil and gas companies is increasingly in question.
However, even with these obstacles, oil and gas remain an important part of the energy mix, especially in developing regions. The International Energy Agency’s Sustainable Development Scenario (SDS) and the Shell Sky Scenario—both aggressive decarbonization forecasts—show an ongoing, long-term role for oil and gas, even while demand levels are reduced from where they stand today. In the United States, India, and China—the three largest greenhouse gas emitters—natural gas in particular has the potential to remain an integral component of the low carbon energy transition for decades to come, depending on the policy mechanisms and technologies in place.
The challenge for the oil and gas industry is to both engage and adapt to a changing policy and investment landscape, but also to evolve in ways which don’t simply support but contribute and perhaps even lead efforts to decarbonize the energy system.