In its second climate change report Chevron said its business is resilient to a number of scenarios the company has looked into, despite the push towards more renewable energy and less oil and gas.
The company notes that most forecasts for global energy demand agree that demand for fossil fuel-generated energy will continue to rise in the coming decades, which means Chevron’s main products will not be forced out of the market by renewables anytime soon.
The International Energy Agency’s (IEA) worst-case scenario for Big Oil, Chevron notes, sees fossil fuels’ share in the global energy mix falling from 54 percent to 48 percent by 2040. That’s not really a major fall, which is why Chevron is so confident that its business will not be affected by the climate change fight.
At the same time, Chevron said, it is investing in improving operational efficiencies to make them less energy-intensive, investing in methane emission control and in developing low-carbon technologies.
“Energy transitions can take decades, as the amount of time required to turn over the current consuming capital stock and redirect investment to meet global energy demand depends on the asset’s service life,” the report notes, adding that “Oil and gas have a diverse set of end uses. In some uses, like aviation, marine, freight and petrochemicals, there are few, if any, cost-effective and scalable alternatives to oil.” Related: U.S. Sanctions Could Be The Final Nail In The Coffin For Venezuelan Oil
This may change at some point, as alternatives to everything fossil fuel-related are being sought constantly. Then again, it will take time. Until that time, Chevron’s shareholders have no great reason to worry, the report’s message runs.
The supermajor is not even particularly concerned with lawsuits that several municipalities and cities in the U.S. have filed against Big Oil. Chevron is named in two lawsuits, one by San Francisco and one by Oakland. Its stance: if Chevron should answer for climate change, so should carmakers, car buyers, and users of every single piece of equipment that requires fuel to operate.
By Irina Slav for Oilprice.com
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