While it is tempting to think of the traditional players in the oil industry as dinosaurs that will soon be extinct (perhaps creating oil supplies for generations in millennia to come), it is interesting that they often also seem to be the leaders at the cutting edge of new energy technology. They have the technical expertise to understand the energy business and, at $100+ per barrel, the resources to explore new frontiers, such as those in renewable and decentralized energy, with the same zeal and efficiency with which they scour the globe for hydrocarbons.
While fossil fuels will continue to be the dominant component of our immediate energy future, ultimately M. King Hubbert will prove to have been correct à‚— we will see peaks in global oil and gas production (assuming we are not already there). After all, he accurately predicted in the 1950s that US oil production would peak in 1970, and even today’s triple-digit prices will not bring us anywhere near those record levels.
However, several interesting developments drive home a high-level commitment to an energy future vastly different from the past. Realizing that its oil reserves, while vast, are finite, Abu Dhabi launched its Masdar initiative and recently sponsored the first World Future Energy Summit. WADE was in attendance to witness this impressive public display of affection for renewable and sustainable energy.
What is most encouraging is that this effort appears to go well beyond merely green labelling the oil business and is truly a major investment in cutting-edge technology and research. Furthermore, and most critically, the ultimate goal of this effort, once we go beyond the initial hype and fanfare, is the same as the oil business à‚— profit. For this technology to be sustainable, it must ultimately meet investors’ ROI criteria as well as environmentalists’ aspirations.
It doesn’t hurt that, in addition to being blessed with enormous oil fields, Abu Dhabi, along with the entire Gulf, has an abundance of sunshine that could, one day, prove more valuable than its oil. While many talk about moving the world beyond petroleum, it takes someone who literally has the keys to a kingdom to create a long-term future vision for the world, and be willing to invest today without concern for merely the next quarterly earnings report. For this, we owe Masdar a great deal of gratitude and our sincere hope for success.
We see a similar May to September romance between the old and the new unfolding in other bastions of the oil industry such as Aberdeen, Scotland and the fields of Texas. The oil boomtown of Aberdeen is host to the All-Energy Conference, the largest renewable energy event in the UK. Throughout the west Texas landscape more than 2000 wind turbines are overshadowing pumpjacks, making Texas now the leading wind power producing state in the US, surpassing even California.
I’m not sure if black is the new green or green is the new black, but there does seem to be a trend in wind and solar wildcatting. Those barrels of oil are slowly starting to fill with wind and sunshine. The industry is not moving beyond petroleum, but with petroleum à‚— as it should.
Director of WADE and Consulting Editor of COSPP