Climate activism has gone mainstream. From 16-year-old Greta Thunberg's tongue-lashing of world leaders at the U.N. for "stealing" her dreams and childhood to the rash of disruptive protests by the Extinction Rebellion activist group across the U.S. and Europe in recent weeks, activists have been banging the drums louder than ever.
In boardrooms, the world's largest hedge funds and pension funds are withdrawing from fossil fuel companies. It is not just businesses involved in the "dirty" coal industry they are divesting from -- oil and gas producers and refiners are also becoming anathema for many investors.
Yet much of the energy behind environmental awareness is being frittered away in negativity and angry rhetoric. At its worst, climate activism betrays a woeful or willful ignorance of the world's energy needs and how they are met.
Renewable power is growing fast. Total renewable generation capacity across the globe jumped by nearly 8% from a year ago in 2018, led by solar and wind projects, according to the International Renewable Energy Agency. It was double the installed capacity in 2009.
However, at 2,356 gigawatts, renewables accounted for only a third of the world's total electricity generation capacity at the end of last year. Though lowered costs from technological advancements and a wave of funding are boosting investment, wider penetration faces geographical and land constraints, intermittence of power production and inadequate transmission infrastructure.
It is now widely accepted that renewable power alone will not help the world achieve the Paris Agreement's goal of limiting the rise in global temperature to below two degrees Celsius.
Natural gas is an obvious choice to accelerate the decarbonization of the power sector and act as a transition fuel till a cleaner alternative is found. It emits 50% less carbon than coal when burned for power.
However, this energy source is also being swept up in the anti-fossil fuel movement, BP Chief Executive Bob Dudley lamented recently. Gas is being "vilified and demonized," in Dudley's words, because of the accidental release of methane, a greenhouse gas, during its production and transportation. Dudley advocated that governments should regulate methane emissions.
There are several factors which will lead to oil consumption leveling off: efforts to boost the share of renewables and natural gas in the world's energy basket; moves toward a circular economy; deploying energy-efficient technologies along the fossil fuels value chain; and energy conservation measures. But that pivot point is more than a decade away.
Projections on the pace and timing of a decline in global oil consumption show a massive divergence, sometimes within the same forecaster's alternative scenarios. Forecasts for global oil consumption in 2040 vary between 80 million barrels and 120 million barrels a day, a range of 40% around current demand.
The uncertainty, combined with a consensus view that oil prices will languish around or below current levels for years to come, has already put a big crimp on companies' upstream spending -- investment in finding and exploiting new oil reserves -- for the past five years.
Several conventional oil and gas production projects were deemed uneconomical and put on ice after the oil price crash of 2014, molecules that may remain in the ground forever.
For every six barrels equivalent of oil and gas that the world consumes, only one barrel equivalent of resource was discovered year-to-date, according to industry consultancy Rystad Energy. That is the lowest reserve replacement ratio in two decades, according to the company.
Shareholder pressure is driving Big Oil's pivot into new energy sectors such as renewable power, battery storage and electric vehicles. Investment is also flowing into researching and developing new zero-carbon energy sources such as hydrogen, though it is still in its infancy.
Business diversification is welcome, but the current wave risks giving the impression that oil companies need to transform themselves into power and mobility companies to future-proof themselves. It ignores the danger of the world suffering a supply crunch in oil -- and possibly even gas -- before replacement fuels are available on the right scale and at the right cost.
Without doubt, Big Oil and other international oil companies share the blame for landing the world in its current quandary. They were reactive rather than proactive on climate change, and some dragged their feet even after it was clear what was happening.
But being battered and buffeted now will not create the right policy and business environment for them either. Environmental activism needs to mature beyond spewing vitriol at easy targets. It needs to become constructive, collaborative and solutions-oriented.
Shareholders need to help oil and gas companies drive down emissions and raise energy efficiency not only in the supply and distribution chain, but also at the consumer's end.
It is time to stop pointing fingers. The companies, their shareholders, policymakers, think tanks and climate activists need to come together for a unified strategy for cleaner oil and gas.
Vandana Hari is founder of Singapore-based Vanda Insights, which tracks energy markets. She has two decades of experience providing intelligence on the energy sector.