Not to panic. Will still require Big Oil for the foreseeable future. How will offshore windfarms and the like be built in Canada if no one to invest. Low carbon transition is not cheap. And who will build the expensive infrastructure required for grid upgrade purposes. The upcoming Budget will offer some tax credits and Big Oil will be there.
But so too will companes like Northland have a chance to benefit. Tax incentives will attract foreign companies. Siemens,Vesta, GE and others to build factories for wind turbine production. Others to build energy storage facilities.
I'm expecting announcements on new renewable energy projects in the months following the Budget. Maybe will help the sector revive and stock prices also for good measure. Here's to hoping. It's always easier to go with the wind then against it, unless landing an airplane.
"Performing While Transforming"
Despite the fact that many European majors will pump lower volumes of oil going forward, it will be the legacy oil and gas business that will fund their low-carbon divisions, the chief executives of BP and Shell said during the latest earnings calls.
Shell operates in an environment of "significant hostility and demonization of our sector," and "I realize it finds its way also in the asset manager world and it finds its way in the asset owner world," CEO Ben van Beurden said, commenting on shareholder activism.
"But let's also be very clear, the world still needs oil and gas…And I think, therefore, it is not only legal, it is legitimate and necessary that oil and gas products are being provided and they better be provided by companies that, first of all, know how to do it, have a very responsible attitude to doing so and indeed have a strategy to use some of that cash, not just to fund shareholder distributions, but also to transition the company to a better, a cleaner, a lower carbon slate," van Beurden added.
BP's Looney—whose slogan is "performing while transforming"—said, "We need cash flow to invest into the transition. And our existing businesses generate enormous cash flow."
"This is not an oil to renewable story. It's a focusing of oil…And it's an investment in renewables. But not just renewables for renewables' sake, investing into the low carbon energy value chain," Looney noted.
Oil Price Website. November 16, 2021 Tsvetana Paraskova reporting.