What Is the Future of Gas and Oil Companies?
We are reader-supported. When you buy through links on our site, we may earn affiliate commission.
The future of gas and oil companies seems to have drastically altered in the past few years. It’s shaped economies and political landscapes. We use oil and gas to get much of our energy and the heat for our homes. We use gasoline to fuel our vehicles.
Oil and gas companies, however, typically don’t have the best reputation. Many people consider them money-hungry and get lots of press coverage for oil spills and other accidents. This, as well as the emissions they release, makes them less than popular with environmentally minded folks. While more eco-friendly than coal, they aren’t as green as renewables like hydro, solar and wind, which have no emissions, so what does this mean for the future of gas and oil companies?
Changes in the Market
Oil and natural gas changed the electricity market dramatically, and it’s still going through changes. In a recent Department of Energy report, which Energy Secretary Rick Perry ordered, researchers cited the economic advantages of natural gas as the main reason for the closure of a number of coal and nuclear plants. They also named the increasing popularity of renewables as a secondary reason for the shutdowns. Over the last decade, the percentage of energy demand met by renewables in the U.S. almost doubled, driven by solar and wind.
People have been increasingly installing solar panels on their rooftops and opting for electric cars as well. In response to these changes, oil and gas companies have been either continuing with their usual practices or starting, perhaps hesitantly, to make their businesses a little bit greener. Oil companies have in the past funded research into new energy resources or low-carbon technologies.
Exxon Mobil, for example, funded algae biofuel research in 2009 to the tune of $100 billion. It canceled the project due to a lack of economic feasibility. Some activists claimed the project was a scam meant to show that alternatives to oil aren’t viable. Other oil companies, too, have started and then stopped green initiatives.
Cleaner Oil and Gas?
New technologies aimed at making oil and gas — as well as other emissions-heavy technologies — cleaner are also now making their way to the forefront of energy industry discussions. Carbon capture and storage (CCS) have the potential to capture up to 90 percent of carbon emissions before they’re released into the atmosphere.
Those captured emissions may then be stored underground or used for other purposes. These technologies are currently being researched and developed, but if they make it to implementation, they may make natural gas and oil greener resources.
Investing in Renewables
The renewable energy market is still much smaller than that of the oil and gas industry, but it’s growing at a rate that makes it impossible for oil and gas companies to ignore. They’ve shown some interest in investing in renewables, but it’s difficult to say how exactly that will transpire. Oil companies have invested in renewables before but eventually backed off.
Oil companies have realized that renewables are a potential threat to their business. Shell even released a report that found solar could become the dominant energy source by the end of this century. Because of the growth of renewable resources and the technological momentum behind that growth, oil and gas companies are starting to invest in solar, wind, battery technologies and more.
Oil companies in Europe especially are getting in on the renewables market to protect the future of their business. The energy market is undergoing significant shifts due to technological, regulatory, economic and other changes. While the oil and gas industry is still strong now, things may change in the future. What the future of gas and oil companies looks like depends on how they adapt to market demands.
Like what you read? Join other Environment.co readers!
Get the latest updates on our planet by subscribing to the Environment.co newsletter!
About the author
Starting from an early age, Jane Marsh loved all animals and became a budding environmentalist. Now, Jane works as the Editor-in-Chief of Environment.co where she covers topics related to climate policy, renewable energy, the food industry, and more.