The role of fossil fuel as main energy source currently and in the future
Fossil fuels are expected to remain the primary energy source throughout the ongoing transition to renewable energy. This is due to the well-established and mature infrastructure of fossil fuels, which has been developed and proven effective over many decades. Currently representing approximately 70% of global energy consumption, fossil fuels have sparked discussions on whether they should be used until depletion or gradually replaced by greener fuel alternatives.
However, the environmental and climate impacts of crude oil have presented significant challenges for gas and oil companies. Recent environmental legislation has compelled refiners to address flue gas emissions, leading them to consider implementing carbon capture storage and usage initiatives, decarbonization technology, and heat integration technology, aimed at enhancing energy efficiency, are now integral components of project agendas to minimize the reliance on fossil fuels for process heat consumption.
While the goal of achieving 100% replacement of fossil-fuel energy with renewable energy and achieving net-zero carbon emissions globally by 2050 is ambitious, it remains out of reach due to the massive infrastructural requirements. The construction of new infrastructures for renewable energy projects is time-consuming.
Amidst this energy transition, gas and oil companies face the challenge of increasing refining capacity to meet consumer demand for fuels and energy. Simultaneously, there is a shift towards directing production to petrochemical stocks, which offer higher added value compared to transportation fuels. This dual strategy is essential for navigating the evolving energy landscape and ensuring a sustainable future.
Integration of fossil fuel into petrochemical stocks
Leveraging the integration of fossil fuel into petrochemical stocks emerges as a strategic pathway for sustaining the prosperity of gas and oil businesses in the post- clean energy transition era. Gas and oil companies are continuously advancing their processing techniques to align with the escalating demand for petrochemicals. This shift comes at the expense of transportation fuel production, driven by the higher added value of petrochemical stocks.
which can serve as a significant competitive advantage for refiners most forwardthinking refiners, prioritizing integration, tend to secure higher refining margins compared to their conventional counterparts who primarily focus on transportation fuels in pivoting caters to markets that still heavily rely on transportation fuels to fuel their economic development.
Furthermore, the gas and oil industry is attuned to the potential threat of losing market shares in the transportation fuel sector post-2050. This concern arises as electric vehicles become more prevalent, and renewable energy technologies become well- established. To navigate this evolving landscape, gas and oil companies are proactively exploring avenues such as the integration of fossil fuel into petrochemical stocks to fortify their market position and ensure sustained success.
