A number of oil and gas producers are stepping up their game when faced with the potential risks that shifting demand present.
Energy demand or consumption is set to increase, but the diversification of energy supply and demand is altering investment horizons.
My sustainability outlook includes both traditional oil and gas producers plus green plays.
After an extremely hot summer in Texas and some heat-related issues while traveling in the UK, the challenges of climate change - warming oceans, floods, excessive heat, erratic weather patterns - are part of daily life. If there were a tipping point, it seems to be approaching or even reached. This affects the many interconnected systems obviously and importantly, food and energy systems. A number of oil and gas producers are stepping up their game when faced with the potential risks that shifting demand could present as well as institutional investors requiring their answers to potential changes in the business environment. Whether you believe it or not, it's happening. And no amount of belief will change the energy transition underway.
The challenge for the investor is knowing what the pace of change will be and the causes for the changes. Many models exist, and they vary. Energy consumption or demand is still set to grow. According to BP, in the even faster transition (EFT), the power sector would be largely de-carbonized - energy efficiency is heightened; and carbon capture tech is utilized. However, oil and gas still account for 40% of the world's energy supply.
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