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Australian Energy Producers Journal Australian Energy Producers Journal Society
Journal of Australian Energy Producers
RESEARCH ARTICLE (Non peer reviewed)

Big oil in 2030: thriving (and driving) in a carbon constrained future

Bernadette Cullinane A C and Steve McGill B C
+ Author Affiliations
- Author Affiliations

A Deloitte Australia, Tower 2, Brookfield Place, 123 St Georges Tce, Perth, WA 6000, Australia.

B TAWA Clean Energy Pty Ltd, PO Box 625, Fremantle, WA 6959, Australia.

C Corresponding authors. Email: bernadettecullinane@deloitte.com.au; steve@tawa.com.au

The APPEA Journal 58(2) 525-528 https://doi.org/10.1071/AJ17090
Accepted: 6 March 2018   Published: 28 May 2018

Abstract

What if you knew that, 12 years from now, demand for your product would dramatically fall? What would you do?

The transportation sector is responsible for more than 60% of worldwide demand for petroleum products. However, several countries have recently introduced policies banning the internal combustion engine (ICE) and/or supporting electric vehicles (EVs), which could have a major impact on this demand. Norway, India, The Netherlands, Germany, China and the UK have all made such announcements. Furthermore, the increasing affordability and reliability of EVs combined with their excellent maintenance and automation capabilities have driven EVs to become among the best-selling luxury cars available today.

There is no way to be certain what the new normal of 2030 may bring for petroleum transportation fuels and the automotive industry. Forecasts range from a world dominated by EVs and substantially reduced demand for oil, to scenarios where the impact to petroleum demand is less than 10%. Whatever the future may bring, renewable energy paired with flexible and intelligent EVs is emerging as a threat, to which the petroleum and automotive industries are responding with a myriad of strategies.

Throughout history, even small disruptions in supply or demand have resulted in major impacts on industry profitability. Based on case studies from around the world and work with large petroleum companies in Australia, this paper discusses how leading companies are preparing for a post-ICE world and considers what steps petroleum and automotive industry executives should be taking today to ensure that they remain vibrant and viable in the new normal of 2030 and beyond.

Keywords: business models, decarbonisation, disruption, electric vehicle (EV), electrification, internal combustion engine (ICE), oil and gas, renewable energy, transition.

Bernadette Cullinane is Deloitte’s Australian National Oil and Gas Practice Leader and LNG Leader. Throughout her career Bernadette has helped companies improve their business, financial and operational performance. She has more than 25 years of experience across the oil and gas value chain and all stages of the capital project to operations lifecycle.

Steve McGill is the founder of TAWA Clean Energy and has had extensive experience in major capital projects working with international energy companies in North America, Europe and Australia. Steve’s energy industry experience covers solar, storage, wind, upstream oil and gas, LNG, FLNG and offshore wind. Steve has functional expertise in venture setup, contract management, strategic sourcing, logistics and change management. Steve holds a BSc Engineering: Mechanical Design from Baylor University (Texas, USA) and is conversationally fluent in Spanish.


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