By Wal van Lierop
Special to GLOBE-Net
Bloomberg New Energy Finance reported earlier this month that clean energy investment jumped 16% to $310 billion in 2014, despite falling oil prices.
While many speculate about the fate of existing innovation and R&D expenditures given the tremendous pressure that is mounting in the oil and gas industry, as I see it, sustained low oil prices will feed a technological sea change.
Lower oil prices will delay investments in large “old-school” capital intensive projects and drive process upgrades and efficiency improvements in current operations.
But they will also stimulate new breakthrough innovations that can help capture the full value of assets by using technologies that can simultaneously reduce costs and the energy intensity of products and production processes, while improving their environmental foot print. Status quo is not an option. If you want to avoid stranded assets now is the time to double up on innovation.
We have already heard this year again from the top ranks of both industry and government on the importance of sustainable innovation in the energy industry to address climate change and lower carbon emissions. Most notably Royal Dutch Shell CEO Ben van Beurden acknowledged that a well-executed carbon pricing system is a crucial part of lowering emissions and addressing climate change.
He went on to say that while renewables will be an important part of the future energy mix, we will still need fossil fuels while we transition over the next decades to a lower carbon future.
There will be enormous opportunities to invest in innovations which can ensure that those hydrocarbons the world will continue to use in that transition period will be relatively clean. Also very noteworthy is that last week President Obama announced a Clean Energy Investment Initiative with a goal of catalyzing $2 billion of expanded private sector investment in solutions to climate change and low carbon energy technologies.
I am very bullish that the oil and gas sector is at the point of having to transform itself into the new energy industry of the future.
While over the next 30 to 40 years we will see a bit of a mixed bag between new forms of energy and traditional oil and gas plays, one thing that will combine them both is very aggressive innovation.
You can read more in a recent article I shared with the Petroleum Economist, “Cashing in on innovation”, and in this article published by the Canadian Venture Capital Association, “Energy sector in transition opens window of opportunity for sustainable innovation”.
Finally I would like to thank those of you who were able to join me at the Sustain Conference in Newport Beach. It became very clear at this Summit that sustainability is increasingly becoming part of every company’s strategic planning as they try to create an “advantage through innovation”.
With increasingly more innovative tools available, often from across multiple industries and scientific disciplines, using them in combination will make winners and result in exponentially better, cheaper and cleaner products and production processes.
Click here to view the conference presentations – especially check out Chrysalix Advisory Board member Dr. Stefan Heck’s presentation on the “resource revolution”. It is outstanding!
The world is on the cusp of enormous acceleration of sustainable innovation and I believe that 2015 will be a pivotal year. The potential for sustainable energy innovation to usher in great change and help industries in transition, including oil and gas but also utilities, mining and chemicals, while providing economic opportunities and environmental preservation has reached a new level of maturity on the way to mainstream acceptance.
With a coordinated effort and commitment to excel, we can create a prosperous and lasting new economy.