Ultimately, no one doubts the risks
surrounding an energy transition are formidable.
A multi-year transition with no clear end point
inherently presents a huge strategic challenge,
not least because the evolution of new
technologies could drive dramatic and disruptive
change. And any change in global warming
trends could alter either the economics or
politics of the energy sector. For an industry
committing substantial capital with a multi-year
view it is hard to think of a time when the
forward outlook has been as uncertain and as
challenging to predict.
Nevertheless, it is also possible to imagine
a situation in which having dealt with its own
cost structure, external downside risks and the
politics, the industry approximates the success
of the tobacco firms over the past two decades.
Just as facing up to one’s own mortality has
prompted many a person to reform and pursue
new opportunities, so too might the energy
revolution prove for big oil.