A World without Oil?
Reading time: 7 min
Oil is part and parcel of so much that revolves around us – from fuels to petrochemical products, which themselves form the basis for mobile phones, cables, creams and even clothing. And so the question is not without merit: is a world without oil even conceivable in the future?
What could the CEOs of an oil & gas company and a petrochemical company, a former German chancellor, a minister for sustainability and tourism and a Greenpeace campaigner possibly be discussing? You guessed it – they're talking about energy, more specifically oil as one of the world’s major energy sources. Rainer Seele, Alfred Stern, Gerhard Schröder, Elisabeth Köstinger, Adam Pawloff, and Andreas Wagner, PhD student at the University of Cambridge, participated in a panel during the so-called 4gamechangers festival in Vienna in mid-April 2019. They were all asked the intriguing question: “A World without Oil?”.
The oil and gas companies of the future will most likely be chemicals companies
Andreas Wagner poetically termed the tackling of challenges related to climate change as “our generation’s moon landing”, saying that we need “enormous efforts globally to build a future beyond fossil fuels and prevent a climate change disaster”. Yet, the picture we are confronted with is different: demand for fossil fuels keeps growing. Nevertheless, he is certain, “solar and wind will be two major sources that will provide us with sustainable energy in the future.” Both technologies have been developed in full and are being rolled out more and more. In his keynote, Wagner mentioned that “with the current efforts and commitments, we are on track to 3°C warming with tremendous effects on all of us. So we need to step up our game.” He briefly touched on how sustainable carbon recycling will be needed in future. Furthermore, Wagner suggested that more research and investment into the development of cost-competitive technologies is necessary – both rather medium to long-term endeavors. We were curious as to whether he saw potential in anything that could already be done now?
“Changing the complete fossil fuel system as we have it today is where the biggest impact lies and where business and politics are key to deliver. This is not an easy task, but necessary – I believe that oil and gas companies need to strategically evaluate how their business model will develop in the next years and make large investments now towards sustainable innovations for the future. Because one of the advantages compared to new players on the market is the financial power of oil and gas companies”, says Wagner. The oil and gas companies of the future will most likely be energy and chemicals companies. “Some of the new technologies and markets will ask for a different set of expertise than what a current oil and gas company has to offer, so a drastic change will likely be necessary. But change also always means a chance to redefine where the journey of the future will go,” grins Wagner. “While the energy market was a steady and conservative market in the past, a faster pace of change will propel innovation to become a key asset of an energy company; so in order to secure competitiveness, investments into in-house and external R&D as well as future technologies will be important to remain at the forefront of innovation.” Nevertheless, Wagner acknowledges that “we will likely not abandon fossil fuels in the short term, since such major changes unfortunately take time. I can only hope that climate change allows us the time we need.”
Realistic targets are key, talking in extremes is not productive
Rainer Seele agrees that “climate change is real and experienced by everybody on a daily basis, there is also a general consensus that we have to do something here”. However, it is important to not just talk about goals, but the fact that we already have a reasonable way of achieving them. “Just defining targets that cannot be reached realistically simply results in disappointment”, says Seele, “we at OMV have the clear strategy to burn less oil and to refine it instead. I believe in future we will see oil as a raw material and feedstock rather than a pure energy source”. He concludes, “I do not believe we should move away from oil entirely, I do not see a world without oil. I also do not believe that it is productive to talk in extremes. Rather, my point of view is let’s not discuss entirely ridding ourselves of a product, but let’s try to minimize its application to where it makes economic and ecological sense.”
I do not believe we should move away from oil entirely, I do not see a world without oil. I also do not believe that it is productive to talk in extremes. Rather, my point of view is let’s not discuss entirely ridding ourselves of a product, but let’s try to minimize its application to where it makes economic and ecological sense.
Rainer Seele, OMV CEO
Everybody needs to be on board
Although Germany's former chancellor Gerhard Schröder believes it is important to get out of fossil fuels as soon as possible, it is a totally different question as to whether the targets that have been set are realistic. “I think we can all agree that the climate targets are already defined – through Paris, through Katowice, through science – but what is at least equally important is to define how we will reach the targets, considering our social and economic requirements. In democratic societies such as the ones we live in, with all the different interests, desires and needs, I believe we will need a double strategy”. While pressure has to come from a society that in turn needs to understand that it will also have to take care of future generations, we also require an understanding that everyone is on board. A social movement is necessary to encourage policymakers, but also to support policymakers in enforcing the right demands. “We need people working for organizations such as Greenpeace or other organizations concerned with climate topics to understand that democratic politicians and democratic politics need to balance the aspects and interests of entire societies and various stakeholders”, emphasizes Schröder.
Likewise, Elisabeth Köstinger agrees that the task of politicians is to bring together the demands of industry as well as climate-change organizations. “I believe in Austria we already did a great job in defining ambitious targets with our mission 2030, our climate and energy strategy – which was a holistic process with society, all political parties in Austria, the economy as well as industry. The most important target we have is to produce 100% of power from renewable energy by 2030 – which is ambitious but definitely doable”, says Köstinger proudly.
A transformation is needed
Greenpeace campaigner Adam Pawloff admits that when it comes to setting realistic climate targets, there are economic pressures and economic needs within which we need to define what is realistic. “But we also need to be aware that if we do not introduce the transformation away from gas, away from oil and mostly away from coal, the economic and societal framework under which we operate will be a completely different one”, he says. “Hence we argue that a world without oil is not a question about how realistic or realizable it is, rather it is unthinkable not to have a world without oil – ecologically speaking as well as from a societal point of view.”
Borealis CEO Alfred Stern notes that “it is important to consider that nowadays all cost reductions when it comes to producing power from wind would not be possible without plastics. Photovoltaic modules have to be built, have to be isolated, have to be coated, energy needs to be distributed, cables need to be coated in order to deliver the energy people need and our industry has an important contribution to make all of this affordable.” If we want to move away from a linear economy to a circular economy we need a fundamental rethink of economic processes. “Although this sounds drastic, I also believe this bears a great chance for companies as well as for society as a whole”, concludes Stern.
The interests of politics, the economy, industry players, non-governmental organizations and consumers might seem conflicted. And yet there is a general consensus that “a world without oil” is not a realistic scenario in the near to medium-term future. Instead a realistic, step-by-step process involving all stakeholders needs to be put in motion, keeping in mind the interests of all parties involved. The key lies in finding the right balance!