This is the decade oil and gas must begin their decline. To avoid warming above 1.5 degrees Celsius without overly relying on unproven technology, world oil and gas use must drop 37% and 25%, respectively, by 2030 before declining even further in the following decades. End of story.
The industry took a sharp jolt in 2020, both from the economic crash driven by the pandemic and the increasing pressure from climate activists. Donald Trump has left the White House, and the Biden administration is set to put more pressure on the industry. On day one, the U.S. president pulled the plug on Keystone XL pipeline permits and set the U.S. on track to rejoin the Paris Agreement. But other global forces are also conspiring that could constrict the flow of oil and gas in 2021. Their success and the fate of millions of lives are intimately tied together.
Even amidst the politics of what has been, oil and gas have had an increasingly rough go. After decades of sinking its tentacles ever-deeper into the world economy, Big Oil’s grip has loosened over the past decade. Stock prices for major oil companies have seen diminishing returns for investors.
“Will we see permanent declines in oil demand resulting from (say) cheaper and more abundant renewables and electric car mandates across the globe?” Clark Williams-Derry, a financial analyst at the Institute for Energy Economics and Financial Analysis, said in an email. “My own hunch is that we won’t see demand recover the way it did after the 2007-2009 recession — but the world always has a way of surprising (and disappointing) me.”