Publications
10 results found
Halttunen K, Slade R, Staffell I, 2023, Diversify or die: strategy options for oil majors in the sustainable energy transition, Energy Research and Social Science, Vol: 104, Pages: 1-12, ISSN: 2214-6296
Mitigating climate change requires an urgent transition of the oil and gas industry. We develop two typologies of the corporate strategy and diversification options for international oil companies (IOCs) in the sustainable energy transition. Data from semi-structured interviews with oil industry professionals are thematically analysed and considered in the context of the wider literature. The resulting framework of corporate strategy options is more comprehensive than has been previously published. We find gaps in the companies' strategic readiness for the energy transition, especially in preparing for the ramp-down of the fossil fuel-based core business. Diversification options are evaluated in terms of the fit between different strategies and companies' capabilities. Many diversification options fit at least some of the existing capabilities of oil majors, but while there is potential for the companies to contribute positively to the energy transition, the current scale of change remains inadequate for meeting global climate goals. The strategic dilemma that the energy transition creates for IOCs is an essentially existential one. Future research should investigate whether IOCs can and should play an active part in the sustainable energy transition and how to drive the necessary action.
Tillotson P, Slade R, Staffell I, et al., 2023, Deactivating climate activism? The seven strategies oil and gas majors use to counter rising shareholder action, Energy Research and Social Science, Vol: 103, Pages: 1-14, ISSN: 2214-6296
International oil companies (IOCs) are facing mounting pressure to transition towards low-carbon business models in line with the Paris Agreement's goals to limit global warming. Shareholder activism in oil and gas companies has increased rapidly over the past decade but has not yet been widely researched. This study explores company communication strategies within the context of climate and transition-related shareholder activism at IOC annual general meetings (AGMs). We analyse 123 relevant proxy statements produced by ExxonMobil, Chevron, and BP at their AGMs from 2006 to 2022. This yielded 10 distinct categories of resolution request, and seven common themes of communicative strategy deployed by IOCs. IOCs were generally successful at minimising the impact of climate-related and environmental shareholder activism, with most resolutions unsuccessful, and even successful ones having limited impact on company performance. However, recent shareholder revolts reveal the oil and gas (O&G) sector is experiencing more instances of, and more successful, investor pressure to improve environmental performance. Cases of voluntary changes in company policy and behaviour further indicate the potential for shareholder activism to influence low-carbon transitions. Further research of the phenomenon itself to gain greater understanding of IOC response strategies can yield insights into the nature and likelihood of a transition away from fossil fuels in the future.
Halttunen K, Staffell I, Slade R, 2022, Climate change and the future of the oil industry: perspectives from the front line of the transition, 12th International Sustainability Transitions Conference. Mainstreaming sustainability transitions: From research towards impact
Halttunen K, Slade R, Staffell I, 2022, “We don't want to be the bad guys”: Oil industry's sensemaking of the sustainability transition paradox, Energy Research and Social Science, Vol: 92, Pages: 102800-102800, ISSN: 2214-6296
The operating model of the global oil industry is not compatible with the goals of the Paris Agreement. For the industry, there is a fundamental tension between two competing mandates: the pressure to contribute to the social goal of climate change mitigation, and the need to perform financially and meet obligations to shareholders in activities that directly contribute to climate change. To explore the range of responses to the tension, we interview professionals from large international oil companies who work or have worked in climate related roles. This is novel data from a professional group that has not previously been interviewed in depth about climate change. We develop a framework of six archetypical responses to tension within the oil industry. Examples of strategic responses include accepting the paradox to choose priorities other than climate change mitigation and confronting the paradox to demand changes to the way the oil industry operates. Examples of defensive responses include the transfer of responsibility and projection of tension to other stakeholders. Responses calling for change in the oil industry are the most common among people who have left the industry and the least common for participants from companies headquartered outside of Europe. In a field marked by controversies and value-based debates, a better understanding of the views of people working on the energy transition inside the oil industry provides new insight into the discussion about possible routes to the sustainability transition.
Bricout A, Slade R, Staffell I, et al., 2022, From the geopolitics of oil and gas to the geopolitics of the energy transition: Is there a role for European supermajors?, Energy Research and Social Science, Vol: 88, ISSN: 2214-6296
The energy transition is changing the corporate positioning of European international oil companies (IOCs). Developments such as Russia's invasion of Ukraine in 2022 and the gas market volatility of 2021 have brought energy geopolitics to the fore and further complicated the landscape in which these companies operate. By combining data from literature and semi-structured interviews with key experts, this work explores how the influence of the European IOCs on the geopolitics of oil, gas, and renewable energy sources might evolve in the transition. We find that European IOCs continue to have geopolitical influence, but it has been diminished by the rise of national oil companies. If fossil fuels are phased down globally, the reduction in oil activities of these companies is likely to further reduce their geopolitical power. While European IOCs may continue to be active in the gas market, this is unlikely to render them significant geopolitical influence given that they may become common rather than dominant market players. The same is true for the IOCs' role in renewable energy markets, although here European IOCs may seek to gain more influence by becoming significant intermediaries and global experts. As the energy transition progresses, many experts expect the political and market landscape around energy to become more fragmented, reducing the overall geopolitical influence of IOCs. Recent events such as the war in Ukraine do not change the overall conclusions, although it remains to be seen whether they will slow down or speed up the IOCs' involvement in the energy transition.
Halttunen K, Slade R, Staffell I, 2022, What if we never run out of oil? From certainty of “peak oil” to “peak demand”, Energy Research and Social Science, Vol: 85, Pages: 1-6, ISSN: 2214-6296
The COVID-19 pandemic sent the oil industry into turmoil on a scale not seen since the 1970s. While the sector appears to be recovering, questions remain about the extent to which the pandemic has offered a glimpse into the possible future of the industry. This future is critical to the success of climate change mitigation, which requires significant cuts to the carbon dioxide emissions from using oil for energy. Therefore, it makes sense to consider future scenarios in which global oil demand peaks and then declines alongside scenarios of continued demand growth. This is a significant departure from historical development of oil demand and the dominant discussion of many decades about “peak oil” and the fear of demand outstripping readily available supply. The implications of peaking oil demand would be massive, not only for the oil industry but also for society as whole. There is not enough understanding of what the impacts would be, or how to prepare for them. The research community needs to take a clear-eyed view of potential futures of oil, which includes considering scenarios in which demand goes into long-term decline.
Halttunen K, 2021, The advent of relativity, Contemporary Physics, Vol: 62, Pages: 112-112, ISSN: 0010-7514
Halttunen K, Slade R, Staffell I, 2021, The future of the oil industry in a "Well Below 2 Degree" world: a company-level agent-based simulation, Energy, COVID, and Climate Change, 1st IAEE Online Conference, Publisher: IAEE
Carmichael RICHARD, Halttunen KRISTA, Palazzo Corner SOFIA, et al., 2021, Paying for UK Net Zero: principles for a cost-effective and fair transition
Halttunen K, Staffell I, Slade R, et al., 2020, Global assessment of the merit-order effect and revenue cannibalisation for variable renewable energy, Publisher: Elsevier
The rapid growth of wind and solar power has been a major driver for decarbonisation worldwide. They tend to reduce wholesale electricity prices, both the time-weighted average (the merit‑order effect) and their own output-weighted average (price cannibalisation). Whilst these effects have been widely observed, most previous studies focus on single countries. Here, we compare 37 electricity markets across Europe, North America, Australia and Japan and explore variations between them.Merit-order and cannibalisation effects are observed in nearly all countries studied. However, only in Germany, Spain, Poland, Portugal, Denmark and California can renewable output explain more than 10% of variation in wholesale electricity prices. The global average merit‑order effect is €0.68±€0.54 /MWh per percentage point increase in variable renewable energy penetration, and this falls with higher penetration. Revenues captured by wind farms decrease by 0.23% (€0.16 /MWh) for each percentage point increase of wind penetration and by 1.94% (€0.90 /MWh) for solar PV.
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