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- Kurt Barrow
Downstream oil companies are venturing into new fuels, partnerships, and business models to reduce carbon emissions and to address inevitable declining demand for traditional fossil oil product. Companies are setting different emissions targets to address climate policies, investor requirements, and societal pressures. However, regulatory frameworks are still evolving, and the scale of low-carbon fuels production is small relative to oil markets. As companies address carbon emissions from transportation fuels and the oil supply chain, they also seek to ensure affordability and reliability of transport fuels and feedstocks. How will the new climate-focused landscape shape refining profitability and investments? What are the roles of biofuels, petrochemicals, retail, and other integration options in downstream strategies? Is there a scalable role for refining businesses and assets in carbon capture and the production of renewable hydrogen and related fuels? How will national and regional regulations influence refining and international trade competitiveness?
Downstream oil companies are nimbly adapting to changing policies and consumer preferences while maintaining the “base business” of providing affordable and reliable fossil oil products. New business models are emerging to capture these new opportunities including partnerships with agricultural, petrochemicals, technology, and other parties that, together with a downstream company, can repurpose the refining asset base, midstream infrastructure, and petroleum marketing networks to supply lower-carbon fuels and address climate goals. What are the strategies being taken to adapt to shifting products market need from policymakers and consumers? What is a framework to weigh the advantages and disadvantages of being an early mover into a new fuels market or adopting a decarbonization technology vs. taking a more conservative position? Will there an ability to scale new fuels in a major way and also to capture a premium for lower-carbon products beyond the policy incentive credits?
Energy transition is and will have greater impacts the oil refining sector than most other energy sectors. Refiners must not only keep producing current fuels indefinitely, but need to adapt to falling demand and emissions policies that impact their operations and products. However, refineries could be part of the energy transition solution based on their locations to market, capital base and technological expertise. In this Lyceum, S&P Global experts will discuss emissions reduction opportunities for refiners.
In this interactive and fast-paced conversation, S&P Global experts will reflect on what they learned during the week, significant announcements, and new insights they gained. What surprised the panel on what is ahead for the energy industry as it continues to build roadmaps to net zero while delivering secure, reliable, and affordable energy to consumers around the world?