EnergyIndustry

Low-Carbon Future: What’s in Store for the Oil and Gas Industry?

Low-Carbon Future: What’s in Store for the Oil and Gas Industry

The world is changing fast. As awareness of the future negative impacts of climate change continues to rise, many countries and individual corporations are looking to decarbonize with the goal of creating a carbon-free future that contributes less to man-made climate change. This trend begs an obvious question: what’s in store for the major players in the current oil and gas industry?

The Current State of Oil and Gas

While most nations are aiming for carbon-free energy production by mid-century, in 2021, there’s still a huge need for reliable oil and gas production. The fact that the transition to renewable energy is likely to be slow offers plenty of opportunities to oil and gas companies currently operating under traditional business models. One of the best things these industry experts can do now to prepare for the future is to hire an oil and gas recruiter denver companies can trust to find them not just workers, but innovators who can help with navigating the many changes to come.

Building Greater Resilience

The oil and gas sector’s traditional business model is not appropriate for modern times. In fact, it hasn’t been for some years. For the past 15 years, oil and gas company annual total returns have lagged the S&P 500 by a disappointing seven percent. Building financial resilience in today’s challenging market requires taking some new approaches.

First, stakeholders need to focus on projects within the industry that feature lower emissions intensities and break-even prices. Second, oil and gas producers must consider retiring their least productive wells to expand their profitability and improve their emissions performances. These steps should be integrated into an effective decarbonization roadmap.

Changing With the Times

Many of today’s key oil and gas industry players are also starting to explore growth options in low-carbon energy production sectors. Low-carbon energy sources are becoming more economically viable all the time, and in 2021, they represent a rapidly growing investment opportunity.

The good news is, oil and gas industry experts can position themselves so that they have a role to play in the adoption of low-carbon alternatives. They can act as:

  • Resource specialists
  • Integrated energy providers
  • Low-carbon energy providers in their own right

The market for low-carbon energy production is already growing, and experts believe it will continue to do so well into the future. To meet the goals set forth in the Paris Agreement, billions of dollars of investment capital will be needed for everything from EV infrastructure to increasing hydrogen-production capacity. Solar, wind, and other renewable energy sources also present a wealth of investment opportunities.

Maintaining a Competitive Edge

It will take decades to make the switch to a low-carbon energy economy. In the meantime, oil and gas companies will need to do everything they can to maintain a competitive edge. In many cases, that means making changes to business models that will accelerate the transition to a low-carbon future. Think creating markets, scaling up supply chains, and developing new approaches to attracting funding.

It’s Time to Prepare for the Long Road Ahead

Key players in the oil and gas industry can no longer continue with business-as-usual operations. Although the traditional energy sector remains quite profitable today, it’s essential that companies start making plans for an increasingly decarbonized future. Although the exact path the world will take to get to zero-carbon remains unknown, it’s becoming increasingly clear that this endpoint is no longer up for debate.

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