If we are to avoid dangerous levels of climate change and making the Earth uninhabitable, we cannot burn even a fraction of the fossil fuels we have discovered, and there's just no point looking for new oil we can't burn. And now, finally, the oil industry seems to be getting that message:
As the coronavirus ravages economies and cripples demand, European oil majors have made some uncomfortable admissions in recent months: oil and gas worth billions of dollars might never be pumped out of the ground.In this context, it looks like the move to ban offshore exploration in New Zealand was prescient and cost-free, something the industry was going to do itself in just a few short years. And hopefully this trend will also help kill onshore exploration in New Zealand as well, and let us move on with sunsetting this toxic and destructive industry in favour of clean alternatives.With the crisis also hastening a global shift to cleaner energy, fossil fuels will likely be cheaper than expected in the coming decades, while emitting the carbon they contain will get more expensive. These two simple assumptions mean that tapping some fields no longer makes economic sense. BP Plc said on Aug. 4 that it would no longer do any exploration in new countries.
The oil industry was already grappling with the energy transition, copious supply and signs of peak demand as Covid-19 began to spread. The pandemic will likely bring forward that peak and discourage exploration, according to Rystad Energy AS. The consultant expects about 10% of the world’s recoverable oil resources—some 125 billion barrels—to become obsolete.
