Throughout history, there have been several different energy transitions, from pre-industrial

revolution times using traditional biomass for power, through the industrial revolution where we transitioned to coal, and subsequently to the power generated from oil and gas — the primary energy source for the developed world for the last 60 years.

We are currently on the precipice of another great energy transition, and what we should be considering is how are oil and gas companies going to position themselves over the next few decades to best serve energy demands throughout the transition?

My name is Jordan Dykman, and I work in our Energy and Natural Resources team here at Oliver Wyman. Prior to my time with Oliver Wyman, I spent several years working as a geoscientist across the upstream division of one of the largest global oil and gas companies. As a geoscientist, I'm required to look at problems on multiple scales, from microscopic levels analyzing the pore space between grains of sand, to mapping mountain ranges to better understand subsurface analogues.

This appreciation for understanding a problem at all levels can be applied when thinking more broadly about the oil and gas industry and its progression through the energy transition. If we understand the broader global energy demands, we can evaluate how oil and gas companies can play to their unique strengths to not only withstand but thrive during the energy transition.

Global energy demand is only expected to continue rising as economies grow and populations increase. To accommodate for this growing need for energy in the coming years, a pure reliance on renewable or low-carbon technologies will not be sufficient to meet mounting demands. Additionally, these low-carbon alternatives will likely be cost prohibitive to some of the countries most in need.

This means oil and gas companies will need to continue traditional operations to support developing countries in the early stages of their energy transition timeline. By serving these communities, the oil and gas companies can continue honing their operations to identify cleaner solutions and technologies for extraction and processing of the raw materials, and it additionally will provide them with a consistent revenue stream that can be reinvested to research and develop cleaner technologies for the future.

In nations where the energy transition is already occurring, policies are being put into place regularly to limit greenhouse gas emissions, and incentivize steps taken towards carbon neutrality. For companies who are not only serving these markets, but also operating in them, this requires more of a shift away from the ‘business as usual’ approach.

These companies need to evolve as the landscape changes or risk being pushed out altogether. Fortunately, for the companies proactively thinking about this transition, there are several low-carbon pathways that can be implemented using or modifying existing infrastructure that for others might come at a significantly higher investment cost.

Take carbon capture, utilization and storage, or CCUS, as an example. This is a clear instance of an offsetting technology that plays directly into the hand of oil and gas companies. These companies have well-established track records of identifying underground reservoirs, drilling wells, and using those wells to pump fluids in or out of the existing space.

Traditional oil and gas companies are already outfitted with the appropriate workforce and skillset to implement this technology on a much broader scale.

Advancements in areas like CCUS and renewable fuels play to the strengths of large oil and gas corporations and allow a pathway for these companies to withstand the changes of the energy transition and provide a space and running room for additional innovation.

While this might sound so clear and simple, the reality is tackling the transition is a highly complex matter, and clients are routinely wondering, “where do we find the right resources to tackle these challenges and assist in the evolution of our business?”

As someone who used to work in the oil and gas industry, I've witnessed the highly skilled workforce at play. These companies host some of the best scientists, engineers, and business people in the world, but all too often these people are seen as just that, without much room for flexibility.

Allowing these individuals to have a more holistic view, and appreciation of the space the business operates in, can help to spark innovation and encourage creative solutioning to the challenges of the energy transition.

This type of updated cultural norm will require a paradigm shift in how these companies think about their workforce, but will be the key to unlocking the potential within the industry.

I'm Jordan Dykman, and this has been my take on oil and gas positioning in the energy transition.

This transcript has been edited for clarity