Everyone agrees that 2020 will be a critical year for energy transition, but how will things really play out? In the run-up to Christmas, Calash and Candour put their heads together over a glass or two of crude and have come up with 12 ‘golden’ moments for the energy market in 2020, some of which are extremely long shots.
Would you take a punt on the odds they are offering? Do you think their Crystal Ball is in focus, or does it need a good scrubbing?
Scenario | Odds | |
1 |
COP26 is a Cop Out
A proposed global carbon trading agreement would allow richer economies to essentially greenwash emissions by procuring carbon offset certificates from poorer countries – one of the most realistic ways to reach climate goals. But a failure to gain consensus at COP26 with the world’s largest emitters, alongside the USA’s withdrawal from the Paris Climate Agreement make reaching an agreement impossible.
|
2/1
|
2 |
Oil Majors Abandon the North Sea
Marginal returns as well as climate change scrutiny from the public cause the oil majors to direct their capital to regions where returns are better, and they are under less public scrutiny.
|
30/1
|
3 |
ICT Takes a Hit
The ICT industry (including data centres) shoots past 2% of all C02 emissions – the same as global air travel[1]– and doesn’t look back. Frivolous consumption of fossil fuels (think of the impact of saving a few thousand images to the cloud) finally comes under the spotlight and starts getting reflected in charges.
|
7/2
|
4 |
Carbon Gets a Foot in the Procurement Door
Operators and service companies start to include carbon footprint and other ESG targets in their procurement strategy, shaping industry buying drivers and fuelling positive environmental messaging for the operators.
|
2/1
|
5 |
Someone Builds a Carbon Footprint App that Works
Despite the complexity and inaccuracy involved in measuring the true carbon footprint of a product or service, the next unicorn is a carbon footprint measuring app that really works! This creates a passive-aggressive community that allows hipsters to showcase their negative carbon footprint credentials.
|
10/1
|
6 |
OPEC+ remains perfectly stable and supports a $70bbl oil price throughout 2020
An extremely long shot.
|
50/1
|
7 |
Wind Cleans up its Act
Sulphur hexafluoride – a synthetic gas used as an insulating material in wind turbines, has the highest global warming potential of any known substance (according to the BBC 23,500 times more warming than C02[2]). In fact, SF6 leaks in the EU in 2017 were the equivalent of putting an extra 1.3m cars on the road.
|
15/1
|
8 |
Finally, The Hydrogen Market Does Something
Green hydrogen – the answer to the environmentalist’s prayers – starts to be taken seriously. Around 95% of hydrogen is currently produced from fossil fuels, but a wave of investment in other renewable energy projects (like offshore wind), makes the production of green hydrogen viable on a major scale. Hydrogen fuel cells become a viable alternative to batteries.
|
50/1
|
9 |
Another Automotive Mega-Merger
The cost of creating new EV production lines along with extremely slow ROIs create an existential threat causing two of the big German car manufacturers merge.
|
Even
|
10 |
The US Onshore Oilfield Service Market Contracts by 20%
The shale bubble deflates significantly with US oilfield services companies being the main casualties.
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1/7
|
11 |
Batteries Take a Battering
The environmental and social impact of battery manufacturing is extremely high. The mining industry is rife with problems like child labour and minerals are often extracted in the most polluting ways possible. According to UNICEF 40,000 children are working in cobalt mines across the DRC. EV manufacturers vertically integrate and diversify into batteries to control their supply chain.
|
4/1
|
12 |
We All Stop Holidaying Abroad and Investors Abandon Fossil Fuel Projects
No more glamorous holidays overseas, and let’s not even mention the returns on renewable projects; but that’s the price we pay to be green. Isn’t it?
|
5000/1
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[1] https://ec.europa.eu/jrc/en/publication/trends-data-centre-energy-consumption-under-european-code-conduct-data-centre-energy-efficiency
[2] https://www.bbc.co.uk/news/science-environment-49567197