Energy Intelligence Forum
Formerly known as the ‘Oil and Money Conference’ this annual, three day event in London is shifting every so subtly its focus to reflect our changing times. There is absolutely no doubt that huge amounts of money continue to be made thanks to our oil addicted global economy but the big challenge is estimating how long this will continue. Many speakers mentioned how the investment case for oil and gas remained strong and, in a nod to the challenges of climate change, spoke positively of future carbon capture and storage and hydrogen solutions.
I was invited to speak in the final slot, on the final day, on the subject of electrification of transport. Given that this trend represents the single greatest disruption to oil markets imaginable it might have been given more prominence in the agenda but no matter. As a panel of four we violently agreed that the era of electric transport was now well underway and there were few real impediments to its exponential growth.
Though policies in the US and Europe have helped kick start the market for electric passenger vehicles it is the nature of the transition in Asia and Africa that’s especially interesting - there two and three wheeler vehicles dominate the transport market and these segments are proving even easier to disrupt, with innovative battery swopping business models allowing helping to side step concerns about range and grid stability. Any oil analysts using models which predict unending growth in demand for oil in emerging economies should view developments in these regions carefully.
The growing realisation that the oil addiction era may be coming to an end may account for both the name change of this conference and also the huge sums being spent on share buy-backs and shareholder dividends rather than long term investments - as other players eat into the energy market faster and more effectively than the existing companies can keep pace with, they may find themselves cash rich now but revenue constrained in the not too distant future.
