Deloitte: Stanislaw sees changing role for oil companies

Dec. 17, 2007
Oil and gas firms might want to redefine themselves as high-technology companies given growing public awareness of climate change and energy security, said energy consultant Joseph Stanislaw.

Paula Dittrick
Senior Staff Writer

HOUSTON, Dec. 17 -- Oil and gas companies might want to redefine themselves as high-technology companies given growing public awareness of climate change and energy security, said energy consultant Joseph Stanislaw in a report entitled "Climate Change and Energy Security: The Future is Now."

An independent senior advisor to Deloitte's Energy & Resources Group, Stanislaw said at a Dec. 12 oil and gas conference in Houston oil companies need to become "far more active in fostering the technology that will enable a new energy era." He said, "We have no time to lose."

Hurricane Katrina, which struck the US Gulf Coast in 2005 "was the trigger—the moment, in retrospect, when climate change for so many went from theory to reality," Stanislaw said. "Accurately or not, Katrina settled in the American imagination as proof of climate change, while underscoring the vulnerability of our energy supply system."

Meanwhile, energy consumption increasingly is becoming a political concern because of greater awareness of its effect "on our wallets, on foreign policy, the environment, and climate change," he said.

Changing consumption
"Until now, energy has largely been seen as the domain of giant multinational corporations and of mighty oil-producing nations," Stanislaw said. "But because of the convergence of concerns about climate change and energy security, the picture that has emerged in the past year is a far more complicated, and yet more promising, one."

Venture capitalists have invested in more than 1,000 start-up companies focused on clean-tech energy sources such as biofuels, solar, and wind, he said.

"Consumer behavior can substantially reduce consumption, thus lessening the need for energy," he said. "Seen from this perspective, demand reduction is potentially the largest source of supply. It is this drive towards efficiency—enabled by end-use technologies that sip rather than chug energy—that must be put at the heart of the new energy era."

Consumers are paying attention to how they can consume oil, gas, and electricity more efficiently, he said.

"Whether driving hybrid cars, diesel cars, weatherizing homes, or buying offsets to lighten their carbon footprints, consumers are becoming an activist force. And this comes with the realization that their actions are not a sacrifice," he said.

Stanislaw believes he sees "the very beginning of a global race to create dominant green economies." Corporations must decide if they want to be seen as friends or foes of the environment.

Changing companies
"Hydrocarbons will continue, of course, to absorb most of the $500 billion that the world invests each year in energy," he said. "They will continue to define the energy of geopolitics, as energy superpowers such as Russia flex their muscles and as the might and market of China and India grow. And vast fortunes, both national and individual, will continue to be reaped from fossil fuels."

In the future, energy companies will no longer profit from selling oil and gas, he said. Instead, the new energy company will be what he calls a high-value service company that provides light, heat, and mobility in the most environmentally-acceptable way.

He identified five ways in which corporations will adapt and assist in the green economy:

-- Defining new efficiency technology from energy audits to smart meters and smart appliances.

-- Establishing low-impact production processes to lower environmental impact. One critical trend involves building or growing productions as close as possible to the end market to reduce transportation needs.

-- Creating new "eco-chic" products and services. Companies are working to create low-energy computers, cars, and light bulbs. They also are creating services.

-- "Green" their brand. Companies are cutting their own energy use and emissions to appeal to consumers and employees.

-- Discovering supply alternatives. More than 1,000 start-up companies around the world are trying to devise new energy supply and new efficiency technologies.

Contact Paula Dittrick at [email protected].