A fully decarbonized future is one that companies in oil, gas and coal would hope are highly apprehensive about, because such a future essentially means their core businesses are out of business. That future is going to take a while, but large firms in the coal, power and oil/gas sectors need to strategize for such a future starting now.
Doing such a roadmap is not easy, though. At almost every point, their new business will at least somewhat cannibalize their current ones - more electric vehicles will mean less oil to sell, more solar power plants will mean less natural gas utilization, and less plastic means less petrochemical demand.
So how will these legacy giants move forward? While we will have to wait and watch over the next few years, some of the strategies spelt out by the CEO of Indian Oil Corp. are instructive. The gist is that the company will start having a higher focus on petrochem, while making bigger inroads into hydrogen, and electric mobility over the next 10 years.
I think it is a rational strategy. While higher focus on petrochem might surprise some, we should remember that it could take much longer for the world to get away from petrochem than people expect. While the annual oil demand globally is growing at 1-2% - and expected to stay in that range for the 2020-2030 period, petrochem demand is expected to have CAGRs in the 5-6% range for the same period. Oil demand might even peak by 2030 or slightly later, while petrochem demand will continue rising for a much longer time horizon.
