Both BP and Exxon Mobil recently released reports revealing that they believe oil demand will peak in the next two decades.
This is because the demand for renewable energies is also expected to skyrocket in the coming years, with more consumers looking for alternative and eco-friendly power solutions such as solar power and electric cars.
What is surprising is that the major oil companies are admitting to this effect after a long and storied history trying to combat climate change science. As one Time piece pointed out, these companies have previously attempted to “murky the science underpinning the need for action on global warming.”
Exxon Mobil’s 2018 Outlook on Energy: A View to 2040 predicts that electricity from wind and solar power will increase 400 percent. BP, according to Time, made similar projections, suggesting renewable energy will consist of 40 percent of new energy production in the future.
Even though it’s been proven over over that greenhouse gas emissions from fossil fuels are a major contribution to climate change, oil companies and many policymakers in support of oil and coal were less than willing to concede to this fact until now.
“The recognition of the energy transition has grown over the past year with the oil and gas players,” Marie-Helene Ben Samoun, managing director of the Boston Consulting Group’s oil and gas practice told Time. “They are not only acknowledging global warming, but they are also acknowledging the energy transition and the impact on their own portfolio.”
While this news may seem like a boon to environmentalists and future climate change policy, the move may be more of a strategic one in order to protect assets rather than protect the environment.
In an effort to secure their position in a rapidly changing market, BP and Exxon Mobil are remodeling their business plans to emphasize natural gas and shifting away from gasoline in favor of other necessary petroleum products.
The news that two major oil companies are openly discussing the impact that climate change and the shift to renewables will have on their businesses is a huge deal. It just may not be nearly enough to push US policymakers to implement the necessary steps to mitigate climate change and reduce emissions.