Low-carbon technologies could disrupt global oil demand in the not-too-distant future the way COVID-19 crushed demand during the lockdowns worldwide, Mark Little, chief executive of one of Canada’s largest oil producers, Suncor Energy, wrote in an opinion piece published on Monday.
“The temporary economic lockdown triggered by the 2020 pandemic is giving us a glimpse into a not-too-distant future where the transformation of our energy system could disrupt demand on a similar scale. Disruption breeds opportunity and forward-looking companies and countries will need to step up and lead,” Little and Laura Kilcrease, CEO of Alberta Innovates, wrote in an article in the Corporate Knights magazine.
According to Suncor’s chief executive, Canada’s oil sands industry is positioned to lead in some innovative low-carbon solutions, such as carbon fiber – a material increasingly important for producing lighter vehicles, including electric vehicles (EVs). Asphaltene makes up 15-20 percent of bitumen and is the feedstock for making carbon fibers, Suncor’s Little said.
“If we can figure out how to do this affordably at scale, it has the potential to quadruple the revenue from Alberta’s current bitumen output,’’ according to the executive.
Suncor’s manager also called for federal government support for disruptive technology that could unlock more value from Canada’s energy industry.
The warning from a top oil executive that the energy transition is set to disrupt oil demand comes amid one of the worst crises in the oil industry in the recent decades.
Some analysts argue that we may have already hit peak oil demand, considering that the pandemic might result in lasting changes in consumer behavior and lifestyles—and even the bosses of BP and Shell are not ruling out this notion.
Last month, Suncor Energy slashed its quarterly dividend by 55 percent to reduce its cash breakeven to a WTI Crude price of US$35 a barrel, as it reported a huge Q1 loss due to impairments stemming from the low oil prices.
By Tsvetana Paraskova for Oilprice.com
