Maybe in better times, the staggering population of the millennial demographic would be a hurdle over which Big Oil could easily leap. But times are tough, and that isn't our today.
Today, we have Saudi Arabia, Iran, and OPEC officials swaying the oil market with each strategic utterance. We have uber-low prices that have caused many to go under. Big Oil debt is soaring, and lenders are growing skittish. We have record production in Saudi Arabia, and Iran is again pumping at near-sanction levels. We have U.S. shale that is still producing at high rates, albeit with far fewer rigs in action, and with far fewer employees. U.S. shale survivors are leaner and meaner, and Saudi Arabia is desperately trying to keep its head above water, refusing to relinquish market share, no matter what the cost. It's been a taxing time.
And now, enter the tax to the oil industry-the millennials.
Big Oil should take a note from other markets that have already had to address the impact millennials will have: ignoring this market segment-although a tricky to define market segment-would be a costly ignorance indeed.
From where does this power come?
In size, this generation-aged between their late teens and mid-30s-has overtaken the baby boomers in size in some countries and comes close in others. By 2020, according to a Brookings Institution analysis, 1 in 3 U.S. adults will be a millennial. The shifting of demographic ratios in the U.S. is not just due to the increase in number of millennials-spurred on by immigration-but also by the simultaneous decline of the Baby Boomer generation-what used to be the largest demographic group in the U.S.
Divestment Crusades - Divesting from Big Oil in a big way
We've already started to see some pushback on Big Oil with U.S. college campuses engaging in what many are calling a divestment crusade. The idea is that with investors pulling out, Big Oil will be forced to close up shop or change tactics. Although the organizations involved may not be comprised entirely of millennials, it would be nothing without the millennial generation's support through signatures and 70s'-style sit-ins. Related: Is Nord Stream 2 Still A Good Deal For Europe?
The total divestments, including Syracuse's $1.18 billion removal of its endowment in coal, oil and gas, remain a mystery, but is probably shy of the $3.4 trillion that 350.org's Bill McKibben claimed last December-but it's still probably a pretty big figure.
What Do They Want, Anyway?
Not all Millennials are flat-out anti-oil, but it's important to understand where this generation is coming from.
Millennials want options. Millennials are on track to be the most educated generation to date. Although education is no substitute for wisdom, educated (and technically savvy) millennials are willing to research products before they buy. They're also the most diverse demographic, so they want different things. The time is ripe for new niche markets within the energy industry to form. This may include cars that use different kinds of energy, or cars capable of using several different kinds of fuel. It's not just low-prices that are forcing the industry to rethink its strategies-soon it will be the Millennials. It may be wise for the industry to change their entire way of thinking now, based on who'll be buying-and investing.
Millennials need to be passionate about where they work. Clearly this is bad news for the oil industry. Although oil companies are cutting jobs right now, the industry has found it difficult to attract young professionals over the last 15 years, says Pavel Molchanov, an analyst with Raymond James. "If students in college are thinking about engineering, many have gone into civil, computer or biomedical engineering but not petroleum engineering," he says. "It's regarded as a dirty industry and there are some safety concerns, and it's just not seen as very sexy."
The vast majority of Millennials would prefer to work in "greener" companies. For now, the dollars are just not there, but as Millennials age and most of the dollars become theirs, this may shift, and the industry could face an even greater recruitment challenge. Companies also need to be transparent for millennials to stay onboard, and even with this transparency, millennials are well-known for their job-hopping tendencies. The very notion of a lifelong job is being called into question, making it more and more difficult for the industry to recruit skilled workers. This is exacerbated when oil majors go for long periods without hiring, causing the gap between the company's oldest and newest workers to widen. Oil companies who don't have specific plans in place to transfer knowledge from older to younger workers may suffer, and companies should work to find new ways to recruit and promote the industry. Related: Why Is Rio Tinto Giving Diamonds Away For Free?
Millennials vote with their dollar. If voting were conducted online, they might be encouraged to vote this way as well. This dollar vote probably doesn't apply to oil, aside from the fact that millennials buy gas directly. Still, major DOJ investigations, such as those regarding Exxon, could affect the way Millennials accept or reject a car or gas companies as whole, be it for employment, purchasing, or investing. It may even spill (pun intended) over into companies that invest in oil and gas, so the industry would be wise to work on cleaning up its namesake. Millennials are largely brand loyal, so a spill, repeated spills, emissions frauds, and legislative frauds that are met with apathy today may very well be a death blow tomorrow.
Millennials are online. Millennials don't watch television ads for the most part. While Generation Y had DVR to fast forward through commercials, Millennials have Apple TV, Netflix, and Hulu. Marketing campaigns about green efforts (smart) and recruitment promotions (smarter) should incorporate social media-which is ever changing. The best thing the oil industry can do to reach out to Millennials in this regard is to employ Millennials to reach their own generation. Because social media is fluid, social media trends are quickly outdated.
Millennials are political, conditionally. Millennials show up in the polls when they are passionate about something or someone. Voting isn't considered very tech savvy, which may hurt voter turnout within this group, and we already know that targeting this group is tricky. So reaching out to get Millennials to the polls may be unsuccessful for now. That is, unless they are passionate about a cause. What this means for the industry is that players interested in sticking around should take care to not be on the wrong end of a cause.
It's unlikely that Millennials will bring oil to its knees in the short-term, because without a viable alternative, the world as we know it would come crashing to a halt. But the old way of doing things, as oil companies found out during the price pinch, may not work for much longer, and those companies will have to change to survive. Although the narrative could spell doom for major players, it doesn't have to be that way-it just has to strap on the idea that there will be a new set of demands from Millennials.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More
Comments
Electric cars have to be recharged which means burning fossil fuels to generate electricity to charge them so indirectly the electric car burns oil/coal.
Are Millenials in fields where alternatives energy sources are being researched?
Now if we had not killed nuclear power development 30+ years ago and had been working all this time to make it safer, we'd be onto something that would support all this rush to Electrify everything under the oversimplified and foolish notion that "Green" is the answer. Take a deep breath, have an original thought from time to time and work through the problem step-by-step. You'll start to find some answers that have value outside of being just nice soundbites.
I will bet you that almost all Millennials think that the only thing oil and fossil fuels are used for is gasoline and cooking/heating oil. Most have no idea how almost all of the products they use daily have materials (plastics, etc...) derived from oil. They have also been fed the Climate Change BS their entire lives and ignore the fact that the Earth's climate has changed constantly since the planet was formed. What is the ideal temp/climate for the Earth? Climate Change is nothing but the latest scam to try and get people to voluntarily give up freedom, money and sovereignty. Notice, all the solutions end in higher taxation, fees or money transfers...not actual working solutions. Add in the faked data and leaked emails proving the 'scientists' involved were manipulating data to match their predictions (very science like) and you have enough evidence that the whole thing is based on false science. But...Millennials buy it hook, like and sinker because it has been crammed into their heads since Kindergarten.
The only viable replacement for Oil and Coal based Electric generation is Nuclear. Nothing else has the cost and scale efficiency to meet demand. Wind, solar and other exotic solutions don't even come close. Add the need for high energy storage for vehicles and nothing comes close to gasoline and diesel. Fossil fuels are here to stay for a long time. Eventually technology will come up with other solutions, but without a sudden breakthrough, it won't be happening for decades. Until then, the Millennials will continue to drive their gas powered cars. A few will drive electric cars, never quite understanding that that electricity is still coming from oil/coal fired plants that are more polluting per unit of power than during gasoline...but it feels good. Millennials favor feeling over logic and actual real-world experience. Just look at Nunya's comment above. Lots of bravado and claims of greatness with no successes, qualification or reality. Millennials need to realize that being smart, educated and wise don't come until you understand just how much you don't understand.
Personally don't think the 'oil industry' is in trouble as the world consumption of oil is almost 100 million barrels per day! Therefore this amount needs to be discovered and reserves replaced. Tesla will have a 'green' car when they can paint it with PV point, to charge the batteries while it's parked, and NOT have to plug in to pull energy from a remote power plant, that burns coal or natural gas to generate electricity! Do hope we get there some day, but not there yet. Seems all autos could be improved with a 360 degree sensors that alert drivers of autos around without having to continually scan 3 different mirrors! Talk about old technology, but don't see anyone offering a head-up display, projected on the front windshield, that shows your auto and the others around it!
Lastly, if you aren't in favor of the oil companies and their products, do not buy them! Simple as that. But it's rather stupid to complain about oil companies, then get on a private jet to fly somewhere to protect what just allowed you to travel!
That’s the idea – to bring the world as we know it (treating the atmosphere as a dumping ground) to a crashing halt. Viable alternatives already exist, but oil majors are doing their best to prevent their profit stream from coming to a crashing halt.
Though I’m forty years too old to qualify as a millennial, I’m finding more and more in common with them every day.
The fact they have never experienced a shortage of anything is only an indication they have taken full advantage of the flexibility our economic system offers. Cheap, abundant, and readily available goods and energy to support the same consumption-driven lifestyle they condemn (provided by previous generations that built the industries they now condemn as exploiters of ....everything "good"). They are not that different from previous generations in spite of how they may perceive themselves.
When the day comes (and it will come) that the energy they consume doubles or triples in price, they pay their full burden in ever-increasing taxes for the government programs they support, and the environmental impacts of "green energy" on the landscape is better appreciated (and no longer ignored), they have to make the difficult decisions others have previously made for "them". Trust me, they show their true colors. It will not be pretty. Until then, it's good to be altruistic. Reality will soon dictate otherwise.
Generally speaking, I will say with cautious confidence that:
-first, most people don't fully understand the breadth to which oil touches our world, millennial or not;
-second, most of us-in the industry or not-do not debate the science behind oil and emissions as it relates to global warming-it is widely accepted; call it education, call it "feeling"-we see the exhaust entering the air and we read about the metals found in products and believe with great conviction that the world is warming, in part, due to emissions; furthermore, it is quite frustrating and unproductive to us that people would rather spend their time debating or ignoring the issue instead of looking for solutions or alternative measures;
-third, and this is a distinction not captured in this list-is that although there is plenty of existing hypocrisy (ie hating the idea of oil and still using the highways, plastics, etc), what we care about is the environment, our bodies, and the sustainability behind the products we use. None of us care or have any loyalty to the aforementioned products-this drives us to explore improvements or reductions in waste as it relates to, say, water bottles. I don't think anyone's aim is to rid the world of water bottles but to instead influence behavior around drinking methods and come up with a way to reduce some of the waste.
Oil isn't going anywhere short term. But can we make improvements to the way it is produced and consumed and depended upon? I'd put my money on that.
http://www.c3headlines.com/sunsolarcosmicoscillationorbital-cycles/
BEST Temperature Record Proves Solar Activity Changes Better Explain Global Warming Than CO2
http://c3headlines.typepad.com/.a/6a010536b58035970c01b7c7a6e3af970b-pi
http://c3headlines.typepad.com/.a/6a010536b58035970c017d3bcfd7ec970c-pi
http://appinsys.com/GlobalWarming/GW_4CE_Glaciers.htm
Scroll down till you hit fig. 9- Glacier Retreat in Glacier Bay [from Akasofu] http://people.iarc.uaf.edu/~sakasofu/pdf/two_natural_components_recent_climate_change.pdf
People get this false impression that just because the fuel that renewables use is apparently green that the technology is also green but all things considered it is not. Fossil is actually greener then renewables when you consider infrastructure costs and the only thing really greener would be 4th or 5th gen nuclear. Even 3rd gen nuclear is greener although not really desirable.
http://oilprice.com/Energy/Energy-General/How-Intermittent-Renewables-Are-Harming-The-Electricity-Grid.html
How Intermittent Renewables are Harming the Electricity Grid
Millennials have been propagandized about the causes of climate change and alleged AGW impacts for special interest reasons, namely NWO agendas and the grubmint tax reaper.
A lot of the other comments on this article are truly heart-braking. There was a time when the older generations would hope for a brighter future for the younger generation and assist them in making a better world for all of us. It's unfortunate that many older people in this un-moving, un-changing industry are so quick to bash against millennials the moment they're asked to step-up and start redirecting resources towards smarter energy choices.
IMHO, kids leaving engineering school these days are less educated than their parents' cohort. They don't understand the constraints imposed by the Laws of Thermodynamics and they don't understand the underpinnings of modern society. Witness the limited criticism of the so-called "Climate Change" phenomenon. They are afraid to break ranks and to do their own analysis. They leave the "discussion" to those who studied law, environment and politics.