Are Oil Companies A Force For Good or Ill?

Recognising the uses of Oil 
The reality is that oil is used for many day-to-day products outside of the typical gasoline/fuel resource, playing a key role in cosmetics, plastics, candle wax and rubber products.  Oil companies therefore play a pivotal role in the upstream, midstream and downstream processes that enable the extraction and processing of raw oil into usable derivatives that have multiple applications.
In this case oil companies are a force for good as they power economies by meeting respective demands.
The BP mistake that could have been avoided – Gulf of Mexico Spill 2010
The BP leased rig had a concrete based core that used nitrogen gas as a catalyst to accelerate the curing process. A surge of natural gas completely broke through this core , travelling up the rigs platform where it ignited, killing 11 workers and injuring 17.
Drilling mud was used to counteract natural gas and oil upwards pressure, however this also meant that the oil had no opposing forces, thus it began discharging into the Gulf, peaking at a discharge rate of 60,000 bbl / day. The disruption to wildlife as been devastating, and BP is still to this day paying for that incident. The latest 2020 full year stats show a -$1.5bn cost relating to this event. Research suggests that a similar incident occurred during 2008.
BP had took advantage of lax regulations for the drilling of oil in the Gulf of Mexico, completely overlooking the need to have a global policy for how to actually conduct deep water drilling – a disaster that could have been avoided by proper due diligence.
Exploiting Government Funding
Struggling Oil companies have begun taking advantage of US covid-19 aid, $113m in taxpayer backed loans meant for small companies have gone to the fossil fuels industry.
There are companies such as Battalion that are receiving assistance under the PPP programme , despite having a number of historic financial woes including allegations of excessive spending on executive jets, private planes and luxury vehicles. Clearly at the expense of small businesses that are in dire need of funding.
What Oil companies are doing right
Incorporating more environmentally friendly products such as LNG , which has seen continual demand growth. Global demand for liquefied natural gas (LNG) grew by 12.5% to 359 million tonnes in 2019, a significant increase that bolsters LNG’s growing role in the transition to a lower-carbon energy system (Shell).
Increasing number of oil companies joining net zero plans , aimed at producing net zero emissions by cutting carbon footprints in energy products.
Particular oil companies are now taking green energy seriously and leaving oil behind. Take for example BP which has recently cut its dividends in a pledge to pursue a ‘green revolution’ , supplemented by a decision to stop the exploration of oil in countries it does not already have upstream operations In.
How to bring about the green energy transition ?
Dedicating more investments towards companies focusing on green energy practices, not necessarily just within the oil and gas sector e.g. the UK gov recently granted £10 million to make whisky production green by turning to low carbon hydrogen, biomass and repurposed waste to power operations. Perhaps if other industries readily adopt green energy, Oil companies will follow as ‘green’ becomes the new trend.
Communicating with other leaders to create more initiatives similar to the Paris agreement, aimed at keeping global temperatures below 2 degrees Celsius above pre industrial levels
Redefine Basel III measures, these measures were aimed at strengthening the regulations and risk management of banks following the financial crisis, however this is also said to have inadvertently constraint investments towards renewable infrastructure projects that are typically capital intensive.
Working with universities to create programs that can induce more innovations within the green energy space, whilst creating greater interest from younger generations
Stricter Policies on Fossil Fuel Investment
Around $151bn of coivd-19 bailout cash has been used to support fossil fuel operations by G20 countries, with only 1/5th used to reduce greenhouse gas emissions and cleaning pollution. Though much of the $151bn is going towards industries that have experienced significant losses due to the impact of the virus e.g. airliners, enforcing contingent conditions that these distressed sectors commit to reducing greenhouse gas emissions and adopt more green energy practices if they are to receive government financial aid, may be a powerful strategy.
By doing so, investments towards fossil fuels are not limited, but green energy technologies are able to benefit at the same time.
Working with Oil companies to develop long term plans
I would work closely with oil companies to develop long term strategies, at the moment , oil companies have three options;
1) Stay the same and continue operations as long for as long as they can, harvesting resources and returning value to shareholders
2) Waiting to shift operations until the timing of the energy transition is more clear and strategy more obvious
3) Do both.
I would push oil companies to adopt option 3), where organisations readily create two entities that have vastly different characteristics, with the long term objective to transition over from option 1 to option 2 , I.e. moving from a hydrocarbons to low carbon environments. Transitional incentives could be offered here in terms of contingent financing and government support.
Increasing Importance of ESG
Environmental, social and governance factors are building rapid momentum to support the use of clean energy, sustainability and the energy transition. Governments need to conduct a review on what particular areas of oil operations can be redefined in line with ESG factors. For example instead of using  coal to generate power during refining and extraction phases, replace this with natural gas which is more environmentally friendly to coal.