Energy Transition Creates $14 Trillion Cloud of Uncertainty for Oil and Gas

Despite stark warnings made earlier this week by the IEA, analysts with consultancy Wood Mackenzie said even a rapidly transitioning world needs oil and gas supply for decades to come.

Energy Transition Creates $14 Trillion Cloud of Uncertainty for Oil and Gas

Key to survival will be to remain relentless in its push to improve efficiency, drive down costs and deliver projects flawlessly as well as improve their ESG credentials, Wood Mackenzie analysts noted. (Source: Hart Energy; Shutterstock.com)

Already known as a risky business, the future of the upstream oil and gas industry has been further clouded by the accelerated pace of a global energy transition, according to a new report by Wood Mackenzie.

Analysts with the energy consultancy firm said the risks associated with oil and gas have been tempered over the years by a single tenet—that demand would continue to rise indefinitely. However, that belief has all but evaporated as the energy transition toward alternative energy sources gathers momentum.

Wood Mackenzie estimates the energy transition now represents $14 trillion worth of uncertainty for upstream oil and gas, the firm said in its report published May 20. 

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Emily Patsy

Emily Patsy is the senior managing editor for Hart Energy’s Digital News Group. She's responsible for the daily news flow and also manages the A&D Watch and Energy Pulse weekly newsletters.