Big Oil Needs to Adjust to Non-fuel Long-term Business Model

The converging crises of carbon-induced climate destabilization and unsustainable transport-related costs and land-use are pushing global society toward a moment of major change, in which “fuel” as we know it will be less a matter of resourced-fuel combustion and more a matter of renewable clean electric power storage and delivery. The petroleum industry needs to adjust its business model to operate in a world where burning its prime resource is not the goal.

Until now, and even in the midst of the current ongoing energy debate, we are accustomed to viewing the onset of renewable energy sources and the interests of petroleum companies as diametrically opposed and politically incompatible. That idea is now easily seen as what it is: an ideological assumption based on a world-view informed by too few facts and too little understanding of complex interrelationships among resources, natural systems, and economic activity.

Petroleum derivatives are a necessary part of human society, as we have adapted to having plastics and other derivatives serve fundamental needs (medicine is just one example) that go far beyond the luxury use of automotive fueling. And so, we need to consider as a matter of public policy and of the long-term viability of petroleum-based businesses, that this resource cannot be allowed to be exhausted by burning, whether or not there are environmental considerations.

We need to get beyond the unjustified and adolescent way of thinking that tells us that the most profitable companies on the planet need a helping hand via taxes, or kid-glove regulatory treatment, in order to find a way to operate. They are vital for society’s functioning as we now know it, but so are the public transit systems, the postal services, the social programs, the educational facilities and the civil engineering projects that we routinely starve of funds out of a misplaced sense of imposed responsibility.

The oil companies are fully grown and can take care of themselves. They are vulnerable, yes, to severe swings in markets that set prices for a very volatile commodity, but they are also insulated from this by their unique right to adjust prices at all times, accordingly, with very little risk of investigation into the motives for the price changes or fines for overcharging. In short, the oil industry is highly profitable, highly privileged, and is engaged in plenty of activities that are not so destructive to the environment as combustible fuels.

As such, they need to —as a matter of corporate responsibility to future planning— adjust the energy segment of their business to clean fuels, turning the market for clean fuels into a high-value, low-cost, profitable economic engine, and resign themselves to the fact that for purposes of economic, environmental and social sustainability, petroleum resources must be dedicated to uses other than combustible fuels.

Once that adjustment is made, we will be able to look at the market for hydrocarbon resources more intelligently, with a better idea of what is and what is not appropriate, sustainable, and justifiable, as market activity. We may be able to curb some of the volatility, reduce the risk of hydrocarbon-related political and military conflicts, and speed society’s adaptation to a greener, more sustainable economic footing. It is not a question of whether, but of whether or not it is done too late.

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