Is Big Oil On Its Way Out?

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Oil companies are facing a serious shift in the global business landscape. On one hand, oil is still the primary source for energy for the world, while on the other hand, falling oil prices and an oversupply has threatened this key industry that the global economy relies on. Furthermore, environmental concerns have swayed public opinion away from big oil and toward renewable energy and sustainable technology.

Moving away from our dependence on oil is not something that will happen overnight. It will take time for renewable technologies to mature before we can completely remove oil from our everyday life. In 2016 and beyond, it will become apparent that other fuels will begin to eat away at oil’s market share of the energy industry. Solar, wind and geothermal, not to mention bio-fuels, will increasingly become more popular as time goes on. Oil will still remain dominant, but if prices continue to fall, oil producers might be forced into focusing on new forms of revenue.

The slow transition out of the oil age will be crucial. If the shift happens too quickly, the market might have a devastating reaction. The slow and gradual shift away from oil will be key to giving markets and oil producers time to explore the new age of energy and create new business models focusing on low-carbon emitting fuels.

Developing nations still rely heavily on coal to generate their power. As they continue to progress, the next logical step would be a dependence on oil. However, recent talks in Paris have noted that developed countries need to focus on sharing renewable energy technology with these developing nations. So they might skip the oil age all together and go directly to depending on renewable technology instead. This could crush the hopes of the oil companies that have just been given permission to export their oil out of the U.S., giving them more incentive to focus on these new renewable technologies.

Manufacturers and oil producers rely heavily on the oil industry to support their businesses. New equipment, sales of oil, and other opportunities, will dwindle once oil is not the world’s leading energy producer. However, this could open up even more opportunities for these manufacturers and oil producers.

Think about this – all of the infrastructure that has been put in place to support the oil industry will become obsolete. Devastating, right? Not exactly. New infrastructure will need to be created to supply the world with renewable energy. Wind turbines, geothermal power plants, and solar panels will all need to be manufactured and installed. This is an entirely new opportunity that has the potential to create thousands of jobs and could require just as much machinery.

Oil companies must evolve to survive this inevitable shift in energy production. If production and reliance on oil continues, it is a fact that the Earth will not be able to handle it. It would be in these companies’ best interests to start seriously exploring how they can transform their business into a 21st century energy company. The sooner they do, the better off they will be in the future. If a company refuses to evolve with the times, they will be left in the dust.

Everyone will win if oil companies successfully make the switch to renewable energy. The environmentalists will be happy with the conservation effort (which could help promote the oil companies new initiative) and the oil companies will win as well. Oil producers that make the switch could get in on the ground floor of this emerging industry. They will become leaders of a new thriving market that will have the attention of the public and government. Tax breaks, public support, and capitalizing on the opportunities will all add up to a successful future for energy companies and manufacturers alike.