As energy markets and technologies rapidly change, international oil companies (IOCs) are facing a set of interconnected challenges that will fundamentally affect their business models. From changes in the supply and demand picture, to shifts in how energy is produced and consumed, to public pressure to decrease greenhouse gas footprints, companies have a wide range of issues to consider as they decide how to prepare for an unpredictable future. In a new issue brief, “Navigating the energy transition: International oil company diversification strategies,” Global Energy Center Senior Fellow David Koranyi provides a macro picture of select IOC’s strategic (re)thinking and explores some of the strategies IOCs have undertaken to diversify their portfolios and prepare for the unfolding energy transition.
IOCs have diverging views on many of the issues at hand and have chosen to address the energy transition in different ways, so which strategies will ultimately be successful? Only time will tell which companies will benefit from the current energy transition and which ones will struggle to cope with the disruptions to come, and to what extent the oil industry can play a constructive role in developing a new, more climate friendly energy system for the twenty-first century.
International oil companies (IOCs) are facing a set of interconnected challenges that will fundamentally affect their business models.
Energy markets and technologies are rapidly changing. The world economy will continue to need oil and gas in significant quantities, likely for a long time to come,1International Energy Agency, World Energy Outlook 2017, (Paris: OECD Publishing/IEA,
2017), https://doi.org/10.1787/weo-2017-en but the supply and demand picture is highly unpredictable due to the potential for major shifts in how energy will be produced and consumed in the coming decades.
Even as the demand for oil is unlikely to quickly diminish, low-carbon energy technologies represent new business opportunities and will take up a rapidly increasing percentage of the market. External competitors are also moving into the energy market to capitalize on these opportunities.
Oil and gas producers will likely face heightened public pressure to decrease their greenhouse gas footprints following the latest dire warning by the Intergovernmental Panel on Climate Change in October 2018 on the worse-than-expected consequences of even a limited change in average temperatures.2Intergovernmental Panel on Climate Change, Global Warming of 1.5 °C, an IPCC special
report on the impacts of Global Warming of 1.5 °C above preindustrial levels and related
global greenhouse gas emission pathways, in the context of strengthening the global
response to the threat of climate change, sustainable development, and efforts to eradicate
poverty, Summary for Policymakers, October 2018, http://report.ipcc.ch/sr15/pdf/sr15_spm_
This issue brief provides a macro picture of select IOC’s strategic (re)- thinking and explores some of the strategies IOCs have undertaken to diversify their portfolios and prepare for the unfolding energy transition. It is an initial attempt to survey the spectrum of strategies and, as such, it does not analyze and evaluate the strategies in detail, nor does it capture the full picture across the energy sector. This approach is valuable for providing a comparative overview and identifying topics for further research. The brief focuses on IOCs, mindful of the fact that national oil companies (NOCs), as well as smaller oil and gas sector players, are battling many of the same challenges.3It should be pointed out that Equinor ASA, which is majority owned by Norway but for all practical purposes operates as an IOC, will be covered in this
paper rather than the forthcoming work on NOCs
Pressures faced by the oil and gas industry
The world is in a transition between an era dominated by fossil fuels and one focused on a low-carbon economy. While the speed, timing, and details of the transition are highly uncertain, the direction should be clear: toward a low-carbon future, due to the imperative to reduce greenhouse gas emissions to mitigate the impacts of anthropogenic climate change.
Despite the pressures of climate action, the speed of the transition is hard to predict due to the complexity of the energy sector, differences in policies and incentive structures, and the diversity of actors affecting outcomes. Historically, energy transitions have unfolded over decades or centuries due to path dependency, the cost and long lead times associated with infrastructure development, inertia created by existing infrastructure, incumbent leveraging influence, and the lengthiness of innovation diffusion, among other factors.4Bassam Fattouh, Rahmatallah Poudineh, and Rob West, “The Rise of Renewables and Energy Transition: What Adaptation Strategy for Oil Companies
and Oil-Exporting Countries?” Oxford Institute for Energy Studies, Paper 19 (May 2018), https://www.oxfordenergy.org/wpcms/wp-content/
uploads/2018/05/The-rise-of-renewables-and-energy-transition-what-adaptation-strategy-for-oil-companies-and-oil-exporting-countries-MEP-19.pdf Full energy transitions, on average, have taken almost a century to unfold.5Roger Fouquet, “Historical Energy Transitions: Speed, Prices and System Transformation.” Energy Research & Social Science, 22 (2016), 7-12 Coal has maintained its centrality in power generation for more than two centuries, and oil has been dominating transport since the mid-twentieth century.6A US Strategy for Sustainable Energy Security, Atlantic Council Strategy Papers (with a foreword from former US Defense Secretary Chuck Hagel),
March 4, 2016, http://www.atlanticcouncil.org/images/publications/AC_SP_Energy.pdf The underlying complexity of shifting today’s enormous energy system has arguably become more complicated, thus the transition may take a long time to unfold.
However, today’s energy transition may happen much faster due to its fundamentally “managed,” policy-driven nature intended to mitigate the impacts of climate change and combat the environmental and health damages caused by fossil fuels. Transition in the energy sector is also affected by innovation in other sectors, such as material sciences, biology, and computing, which all have the potential to further accelerate shifts.7Benjamin K. Sovacool and Frank W. Geels, “Further Reflections on the Temporality of Energy Transitions: A Response to Critics,” (2016) sro.sussex.
ac.uk/72015/3/Sovacool%20Geels-Transitions-22-August-Final.pdf Historically, there are examples of sectoral energy transitions that took place at a much faster rate, e.g., in the case of the rapid buildup of French nuclear power or the Dutch gas industry, the shift to widescale use of biofuels in Brazil, and the transition from kerosene to liquefied petroleum gas cookstoves in Indonesia.8Sovacool and Geels, “Further Reflections on the Temporality of Energy Transitions.”
Past energy transitions had fundamental implications for incumbents, and in many instances led to their (typically slow) decay.9Fouquet, “Historical Energy Transitions.” The tumultuous and almost century-long waning of the British coal industry is one such example.10Ibid However, transitions can be delayed or slowed down by incumbent industries deploying their considerable political lobby and market power. For example, the charcoal industry fought against coal and coke to preserve its preeminence in ironmaking throughout the nineteenth century in France and Germany, with considerable success in delaying the transition.11Fouquet, “Historical Energy Transitions.”
A number of drivers impact the nature and speed of the current transition.
First among them is a technology shift, with new energy technologies maturing and costs dropping significantly, especially in the past five years. The rapid advancement in battery technology, for example, has created the possibility of affordable electric vehicles with substantial range and fast charging options. A Barclays study estimated a nine million barrels-perday drop in oil demand from today’s level if electric vehicles make up one-third of the car market by 2040.12“Electric Cars Will Wipe Out Oil Demand Equal to Iran’s Output by 2025, Barclays Says,” CNBC, October 5, 2017, https://www.cnbc.com/2017/10/05/
electric-cars-could-cut-oil-demand-roughly-equal-to-irans-output.html At the same time, while electric vehicles may spread rapidly in terms of light-duty or personal vehicles, major questions remain with respect to heavy-duty vehicles and trucking. Additionally, there is little indication that an electric future is in sight for long-distance aviation or the maritime space. Nonenergy use of petrochemicals will also likely remain a persistent driver of significant oil demand for decades to come.13International Energy Agency, The Future of Petrochemicals: Towards More Sustainable Plastics and Fertilisers, (Paris: OECD/IEA, 2018) https://webstore.
iea.org/the-future-of-petrochemicals Energy developments in Asia will be of critical importance, as Asia has been predicted to be the center of both oil demand growth and the adoption of clean and disruptive technologies in the transportation sector in the decades to come.14 Robert J. Johnston and Lily Ghebrai, “Asian Energy Transition: Moving the Oil Market One Step Closer to Peak Demand?” Atlantic Council Issue Brief,
January 2018, http://www.atlanticcouncil.org/images/Asian_Energy_Transition_web_0108.pdf As a result, prognosis on oil and gas demand, prices, and timelines for “peak demand” vary dramatically.
A second major driver is changing market fundamentals: the combined actual and potential effects of new energy-technology cost reductions on the supply side and shifting consumer preferences on the demand side, placing an increasing premium on low-carbon energy products in more market segments. The cleanenergy disruption has already arrived in the electricity sector, where the majority of investments15International Energy Agency, World Energy Investment Outlook 2018, (Paris: OECD Publishing/IEA, 2018), https://www.iea.org/wei2018 in the past three years went into renewables.16Pilita Clark, “The Big Green Bang: How Renewable Energy Became Unstoppable,” Financial Times, May 18, 2017, https://www.ft.com/content/44ed7e90-
3960-11e7-ac89-b01cc67cfeec Major procurers of energy such as Google, Amazon, Apple, and Walmart are shaping energy markets by prioritizing renewables in power-purchasing agreements. Oil companies are not immune to these trends, as most recently evidenced by ExxonMobil Corp.’s August 2018 request for proposals from solar or wind power suppliers in order to buy renewable energy to power its Texas facilities.17Brian Eckhouse and Kevin Crowley, “Exxon Seeks Wind, Solar Power Delivery in Texas,” Bloomberg, August 27, 2018, https://www.bloomberg.com/
Consumer preferences also affect government and international policies, the third major driver. Overall, government policy is already playing a much more important role than in past transitions. So far, most national governments have prioritized affordable energy usage and mobility for their citizens and have undertaken only cautious measures on curbing greenhouse gas emissions, with minimal impact on IOC business models. However, policy shifts are increasingly driven by growing societal concerns about issues such as air pollution and other environmental concerns, shifting priorities in urban planning, and, of course, climate change, even if greenhouse gas emission reduction considerations are not (yet) the primary driver of the energy transition. As the devastating impacts of climate change become clearer, governments may decide to adopt more assertive mitigation policies against fossil fuels, accelerating the shift. More than 1,200 pieces of legislation connected to climate action—compared to around sixty just two decades ago—were passed and are in effect around the world.
18Michal Nachmany et al., Global Trends in Climate Change Legislation and Litigation, 2017 Update, Grantham Research Institute on Climate Change and
the Environment, London School of Economics and Political Science, May 2017, http://www.lse.ac.uk/GranthamInstitute/publication/global-trends-inclimate-change-legislation-and-litigation-2017-update/ The United Kingdom, France, India, and China have announced plans to limit sales of cars with internal combustion engines (ICEs) within the next two decades, and much more forceful policy interventions may be in the offing. Policy shifts in a major market such as China can send a strong signal to the rest of the world, with significant implications for corporate value chains and business models.
International agreements also add to the pressures. Set by the United Nations General Assembly in 2015, Sustainable Development Goal 7 on ensuring access to affordable, reliable, sustainable and modern energy for all foresees a transition in the energy sector and advocates for the increased use of renewables. Though not binding, it provides an important blueprint for national policies and influences the thinking of governments and subnational units as well as companies within and outside the energy sector.
A fourth driver is investor and stakeholder pressure related to climate change. There is a growing campaign advocating for divestment from fossil fuels related to economic activities, and shareholders in many IOCs are making vocal demands for climate action. Investors pledging divestment range from Norway’s sovereign wealth fund and American university investment funds to major insurance companies and pension funds. Funds committed to divesting from fossil fuels now account for more than $6 trillion, with pledges by nearly 1,000 institutional investors. IOCs such as Royal Dutch Shell PLC referenced divestment as a “material risk” to its business,19Damian Carrington, “Fossil Fuel Divestment Funds Rise to $6tn,” Guardian, September 2018, https://www.theguardian.com/environment/2018/sep/10/
fossil-fuel-divestment-funds-rise-to-6tn while the Bank of England warned of systemic financial-sector risks and called for carbonfootprint disclosures.20Pilita Clark, “Mark Carney Warns Investors Face ‘Huge’ Climate Change Losses,” Financial Times, September 29, 2015, https://www.ft.com/
content/622de3da-66e6-11e5-97d0-1456a776a4f5 In some instances, investor pressure manifests itself in another way: due to the pessimistic assessment on future demand outlook, some investors are pushing companies to prioritize shortcycle investments, such as shale, due to the fear of longterm commercial viability and stranded assets. Many of the IOCs have also been the subject of lawsuits—none of which have been concluded to date21David Hasemyer, “Fossil Fuels on Trial: Where the Major Climate Change Lawsuits Stand Today,” Inside Climate News, September 10, 2018, https://
insideclimatenews.org/news/04042018/climate-change-fossil-fuel-company-lawsuits-timeline-exxon-children-california-cities-attorney-general—brought by state and local jurisdictions, as well as NGOs and private citizens, alleging liability of the producers for billions of dollars of damages caused by climate change.22Amy Harder, “Big Oil Teeters between Enemy and Ally in Climate Fight,” Axios, June 4, 2018, https://www.axios.com/big-oil-teeters-between-enemyand-ally-in-climate-fight-d78db1a3-775e-4185-a5ad-698a4d6dc85a.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_
Amid these changes and pressures, IOCs are evaluating their strategies and weighing options for positioning themselves in the energy transition.
The core challenge for oil companies is to anticipate energy-sector disruptions amid uncertainty and adjust their business models to decarbonize their existing assets and integrate low-carbon assets into their portfolios. Timing is a critical element and a major dilemma. Adaptation strategies that lack ambition or come too late could lead to lost market opportunities and weakened competitiveness on new energy markets as competitors pull ahead. Yet making investment and acquisition decisions early comes with risks in the form of wasted resources and asset write-offs.23Fattouh, Poudineh, and West, “The Rise of Renewables and Energy Transition.” BP PLC invested billions of pounds in low-carbon technology, energy efficiency research and development (R&D), and green energy in the 1980s and 1990s, but eventually decided to abandon their efforts and focus on their core oil and gas business. 24Terry Macalister, “BP Dropped Green Energy Projects Worth Billions to Focus on Fossil Fuels,” Guardian, April 16, 2015, https://www.theguardian.com/
environment/2018/sep/10/fossil-fuel-divestment-funds-rise-to-6tn BP and Shell tried to diversify into renewables in the mid-2000s, with Shell moving into offshore wind and BP attempting to define itself as “beyond petroleum” by investing in solar and biofuels. These strategies were short lived mainly due to the high costs of immature technologies and the renewable energy markets at the time. Chevron Corp. invested in geothermal capacity in Indonesia, only to sell its operations in late 2016 due to unprofitability.25Enrico De La Cruz, “Indonesia, Philippine Groups Acquire Chevron’s $3 Billion Geothermal Assets?” Reuters, December 23, 2016, https://www.reuters.
com/article/us-chevron-sale-geothermal-idUSKBN14C0OW Another challenge was the lack of necessary technical and managerial skills to operate in a dramatically different market and regulatory environment, compared to upstream oil and gas development.26Paul Stevens, International Oil Companies: The Death of the Old Business Model, Chatham House, May 2016, https://www.chathamhouse.org/sites/
Diversification strategies: A gradual approach
The majority of IOCs publicly acknowledge the challenges presented by the energy transition, though assessments of the severity of the changes and their imminence vary greatly. Some IOCs are cautiously preparing for potentially rapid changes in this energy transition and are experimenting with new technologies and forays into new sectors that could become new business models; others see any significant move beyond their core business competence as too risky, arguing that oil and gas demand will not collapse for a long time.
Most IOCs are taking a gradual approach. They continue focusing on their core business, but they leverage their core competencies and assets to cautiously diversify into low-carbon assets. The approach offers flexibility to ramp up diversification over time and to look into commercially viable ways to decarbonize their fossil-fuel assets.
However, there are differences in the extent to which companies are venturing into new energy technologies and innovation. The table below provides a cursory glance at what select IOCs are doing in the clean-energy space.
First, the scale of investments in low-carbon technologies varies greatly between IOCs, but this investment remains a fraction of overall investments for all IOCs. By and large, all IOCs are continuing to bank on sustained oil and gas demand and are proceeding cautiously when it comes to more ambitious diversification away from their core business. Even Shell, the most bullish of the IOCs on the speed of the low-carbon energy transition—CEO Ben van Beurden predicted peak oil demand could occur by 202527Tim Pearce, “Shell CEO Predicts Peak Oil Demand by 2025,” The Daily Caller, March 8, 2018, https://dailycaller.com/2018/03/08/shell-ceo-peak-oildemand-2025/—spends less than 10 percent of its annual investments on renewables. Other IOCs invest at even lower rates.
Second, there are major geographical differences in company strategies. IOCs headquartered in Europe, namely BP, Shell, Equinor, and Total, tend to be more bullish when it comes to new energy investment and diversification strategies, while US-based IOCs view clean energy market developments conservatively, adopting more of a wait-and-see approach to emerging technologies and recognizing the inherent risks involved in being relatively early movers.
Third, most IOCs have been on a major shift toward natural gas, which for some dates to the 1990s28Amy Harder, “Why Big Oil Is Slowly Turning Green,” Axios, December 11, 2017, https://www.axios.com/why-big-oil-is-slowly-turning-green-1513388514-
5b982f91-9e6f-4518-932a-b45dcf976818.html and for others began more recently. This is partly due to the recognition of the growing role of gas in electricity generation and its potential role as a bridge fuel to a low-carbon future, 29The IEA forecasts that the share of natural gas in the global energy mix will grow by 2% annually until 2020 and that liquefied natural gas (LNG) will
grow twice as fast as overall gas consumption, accounting for around half of all gas traded globally and partly due to the difficulty in gaining competitive and easy access to oil reserves. Shell, BP, and Eni have been very dynamic in their diversification strategy to build up a gas value chain, banking on growing global gas demand and building up a portfolio of electricity-generation assets powered by gas. BP is on track to overtake Shell and Total in terms of the share of gas in its overall output, which is anticipated to reach 60 percent by 2019. 30Robert Perkins, “Majors Trim Oil Exposure in Shift to Gas,” S&P Global Platts, March 9, 2018, https://www.spglobal.com/platts/en/market-insights/
latest-news/natural-gas/030918-analysis-majors-trim-oil-exposure-in-shift-to-gas American companies have also invested heavily in gas. Exxon purchased unconventional gas producer XTO in 2009 for $41 billion,31Exxon Mobil Corp. and XTO Energy Inc. Announce Agreement, ExxonMobil news release, December 14, 2009, https://news.exxonmobil.com/pressrelease/exxon-mobil-corporation-and-xto-energy-inc-announce-agreement and natural gas accounts for about 14 percent of Chevron’s value.32Trefis Team, “A Quick Snapshot of Chevron’s Natural Gas Business,” Forbes, June 25, 2018, https://www.forbes.com/sites/
As part of the diversification effort, most IOCs also focus on increasing the role and expanding the value chains of their chemical operations, banking on the increasing need for hydrocarbon products in the petrochemical sector. 33International Energy Agency, The Future of Petrochemicals: Towards More Sustainable Plastics and Fertilisers, (Paris: OECD/IEA, 2018) https://webstore.
iea.org/the-future-of-petrochemicals IOCs have also been emphasizing the rationalization of their downstream portfolios and consolidating refinery capacities in anticipation of more moderate demand growth or even decline.
Fourth, all IOCs emphasize cutting greenhouse gas emissions from their core hydrocarbon activities by increasing efficiency. Emissions-reduction pledges have become a standard feature in IOC corporate strategies and investor presentations, though the levels of ambition and timelines differ quite significantly. Several IOCs and NOCs (Exxon, Chevron, Eni, BP, Shell, Total, Equinor, Occidental Petroleum Corp., Repsol, Saudi Aramco, China National Petroleum Corp., Petrobras, and Pemex) joined together to support the Oil and Gas Climate Initiative (OGCI), a voluntary initiative aiming to take practical actions on climate change and reduce the carbon footprint of energy value chains.34OGCI, https://oilandgasclimateinitiative.com OGCI set up a $1 billion fund to support investments into reducing methane leakage; reducing CO2 emissions; and carbon capture, utilization, and storage (CCUS) projects.35OGCI, https://oilandgasclimateinitiative.com/climate-investments/
In anticipation of more ambitious government policies to reduce carbon emissions, all companies in this study apply an internal carbon price ranging between $30 and $50 per ton, though in some cases the exact methods of application are not transparent enough to evaluate their effectiveness and impact on business models. Some companies, such as Exxon, Shell, Total, and BP expressed their support for the introduction of a carbon tax in the United States and even committed resources to lobby in favor of legislation promoting a $40 carbon tax to be redistributed in the form of dividends, developed by the Climate Leadership Council.36Climate Leadership Council, https://www.clcouncil.org
Fifth, investment into renewables and low-carbon electricity-generation capacity is increasingly the norm among IOCs in Europe. Shell, BP, Total, and Equinor are at the forefront, and Equinor (formerly Statoil) even changed its name to reflect its shift in strategy and ambition, becoming a major player in offshore wind in particular. Offshore wind platforms require similar expertise to offshore oil and gas platforms, and the company is trying to leverage its advantage with managing complex manned or unmanned offshore projects in difficult marine settings.37Columbia Energy Exchange, “Eldar Saetre: Innovation and Transformation Across the Energy Landscape,” Columbia University, Center on Global Energy
Policy podcast host Jason Bordoff speaks with the president and CEO of Equinor, September 17, 2018, https://energypolicy.columbia.edu/eldar-saetreinnovation-and-transformation-across-energy-landscape?utm_source=Center+on+Global+Energy+Policy+Mailing+List&utm_campaign=bd26b5dde3-
EMAIL_CAMPAIGN_2018_09_17_01_41&utm_medium=email&utm_term=0_0773077aac-bd26b5dde3-102129405 Even if they have not changed their names,38In 1998, British Petroleum changed its name to BP. most IOCs have made considerable efforts to rebrand themselves as “energy companies” as opposed to oil and gas companies, in order to cast themselves in a more positive and progressive light from a climate perspective and retain the ability to attract and retain talent from younger generations interested in participating in the energy transition.39Columbia Energy Exchange, “Eldar Saetre.” Pressures to take a more progressive role in climate action increasingly come from the ranks of their own employees, particularly in the case of European IOCs.
Sixth, creating a corporate venture-capital fund to invest in start-ups in the new energy space has also become a widespread practice mostly in Europe, with Shell leading the charge by setting up its venture arm in 1996.40Karel Beckman, “Exclusive Interview: Mark Gainsborough, Head, Shell New Energies: ‘We are further along than people realize,’” energypost.eu, June 21,
2018, http://energypost.eu/interview-mark-gainsborough-head-shell-new-energies-we-are-further-along-than-people-realize/ BP, Total, Shell, and Equinor have been ramping up investments through their venture firms in the past few years.
Seventh, all European IOCs are bullish on e-mobility and electric vehicles, buying up or partnering with electriccharging providers and expanding charging facilities, leveraging their retail networks in Europe. In Shell’s case, this also stems from a more bullish outlook on the spread of electric vehicles (EVs),41Ron Bousso and Karolin Schaps, “Shell Sees Oil Demand Peaking by Late 2020s as Electric Car Sales Grow,” Reuters, July 2017, https://www.reuters.
com/article/us-oil-demand-shell-idUSKBN1AC1MG while in most cases, it appears to be part of a hedging strategy to capture an emerging, albeit perceived to be marginal, market segment. This approach is only beginning to take hold in the United States, with Chevron’s cautious investment into ChargePoint, and ExxonMobil’s active interest in e-mobility.
Eighth, the further development of battery technologies is widely considered to be the potentially most disruptive factor for IOCs, as cheaper and more efficient batteries can speed up the deployment of electric vehicles, fundamentally affecting oil demand. The grid-scale deployment of batteries could also threaten the role of natural gas in electricity generation.
42Mark Chediak, “The Battery Will Kill Fossil Fuels—It’s Only a Matter of Time,” Bloomberg, March 8, 2018, https://www.bloomberg.com/news/
articles/2018-03-08/the-battery-will-kill-fossil-fuels-it-s-only-a-matter-of-time IOCs are closely watching this space, and some, like Total, BP, and Shell, are making smaller-scale investments in storage companies.
This issue brief offers a snapshot of IOC adaptation strategies. IOCs have diverging views on future market developments, the pace of the energy transition, about if, when and to what extent the role of oil will diminish, the ability of renewables and electric cars to penetrate the market, and the potential impact of clean energy developments on their business models. Yet, beneath the divergence, there is an underlying consensus that the threat to their core business model is not imminent, and a gradual approach to diversification is preferred for the time being.
At the same time more and more IOCs are identifying upside business opportunities for companies investing in new low-carbon energy technologies. European IOCs with more ambitious—if risky and potentially costly— diversification and acquisition strategies may find themselves at a critical advantage later. American IOCs are more conservative in their assessment of the impact of market shifts, government policies, declining lowcarbon energy technology cost curves, and disruptive innovations in the energy space on their business models, but there are some recent signs that this approach may be changing.
The fundamentals of IOC business models and their ability to adjust to changing realities will be tested going forward.43Stevens, “International Oil Companies: The Death of the Old Business Model.” Many IOCs have successfully reinvented themselves multiple times in the past. Time will tell which companies will benefit from the current energy transition and which ones will struggle to cope with the disruptions to come, and to what extent the oil industry can play a constructive role in developing a new, more climatefriendly energy system for the twenty-first century.
David Koranyi is a senior fellow for energy diplomacy at the Atlantic Council’s Global Energy Center.