All things energy forum

The world is facing an unprecedented situation, unlike anything after WWII. The key characteristics are Uncertainty and the convergence of six mega phenomena:

1. A Sustained Pandemic: Covid does not seem to abate, 3rd wave, British variant, problematic availability of vaccines
2. Economics: Huge stimulus sums are being spent but still a bleak forecast for a recovery, outside China
3. Energy trade: an oil price plunge, to even negative territories, is now followed by uncertainty in demand and volatility in oil/gas prices
4. International politics: US/China trade war, Russian political frictions with EU, seeking a balance between energy security, economic and environmental goals in times of energy transition
5. Energy/Environment policies: EU–Green Deal proceeding at full speed, but at the same time China/Asia are ordering new coal plants
6. Disruptive technologies and emerging challenges: cybersecurity issues arise from increasing digitalization (hacking, terrorism & insurance coverage)

As a result,  some energy subsectors are favored by low-emissions policies: Renewable Energy Sources, Hydrogen of the ‘green’ variety. Nuclear should be favored, due to no carbon emissions, but safety and cost problems exist. Other energy subsectors are challenged: coal, tar sands, oil especially upstream, shale oil. Natural gas is a borderline energy subsector — a transition fuel.

When the Covid-19 factor is superposed, even the subsectors that are  theoretically favored are faced with problems of low demand and supply chain, as well as administrative delays and obstacles to Foreign Direct Investments from specific countries.

Indirectly but increasingly strongly, the energy sector is also affected by the changing attitudes of banks and other financial institutions, insurance companies, hedge funds, NGOs etc that are becoming more active in the direction of decarbonization.

In this framework, the decisions of energy producing or consuming companies, are hugely affected. Such decisions Include health and safety, sales, operations, finance/cashflow, risk management/communications, CSR, planning/strategy/energy transition.