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A report for BNP Paribas investors says the growing efficiency of renewable energy means the oil industry is doomed to an irreversible decline.
According to the report, the oil industry has never faced a threat such as that posed by the double whammy of renewable energy and electric vehicles, which will soon make cars with internal combustion engines obsolete. Sales of the new Tesla Model 3 in a declining European market are proof that the oil industry will soon lose its best customer, despite its long-running misinformation campaign about electric vehicles.
The first scientific evidence about our impending climate emergency was published forty years ago, and largely ignored. We now know that, despite the efforts of the oil lobby to ridicule and deny them, it was all true. Just under five years ago, an article in Nature recommended leaving 80% of existing oil reserves in the ground, warning of the consequences of not doing so, but again the oil lobby blocked politicians from reaching any agreement on measures to reduce carbon emissions.
The oil industry is the most profitable enterprise in the history of the world and intends to continue being so for as long as we allow it, despite being fully aware of the consequences. Therefore, although we are beginning to see its fall from grace, that process will still be too slow. UN efforts to achieve zero emissions by 2050 ignores the fact that by 2050 it will be, according to all reports, too late.
The oil industry knows it is following the four stages of disruption, but this won’t prevent it from trying to resist that process in a bid to adapt and survive. The largest oil company and the most profitable company in the world, Saudi Aramco, has announced a $75 billion investment in an Indian petrochemical company, a supposed alternative to using fossil fuels for burning. Shell acquired Greenlots, a Californian energy management and electric vehicle charging technologies company, six months ago, to begin transitioning its network of petrol stations. The technologies for manufacturing electric boats or electric airplanes are advancing rapidly and more and more countries are rethinking their generation infrastructure around renewables.
Energy generation through renewable sources is improving exponentially and is something that is no longer simply better for the planet but also for investors. Nevertheless, the oil industry has no intention of voting itself out of office and will continue extracting and exploiting the planet’s oil reserves. We don’t have time to wait for investors to tire of these companies. The much-needed end of the oil industry should be brought about not by its profitability or otherwise, because it could linger on for decades, but instead through political decisions guided by scientific evidence, links to which can be found throughout this article. The writing is on the wall, and has been for years; when will we bother to read it?
