Proxima Blog

Industry Insight: Oil and Energy

  

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The surge in crude oil prices driven by tension in Libya has forced many organisations, that are high consumers of oil or reliant on oil, to look further across the energy sphere towards alternative energy options.

Over the past 3 years, corporations have been constantly pressured by Government organisations to develop more sustainable “green” operating initiatives, particularly the automotive industry.

Co-incidentally (or not) the focus of this year’s international Motor Show and Accessories (held in Geneva – which is increasingly becoming the worlds capital for sustainable, renewable, alternative sources of energy) was on hybrid and pure electric motors – with the Rolls-Royce Phantom (pure electric car) being the talk of the town.

Feedback of the Phantom is being monitored closely with the decision to go into production hanging on the outcome of several similar public tests. Some are sceptical however, with BBC quoting a competitor (Dailmer) saying “there was no demand for electric Maybachs so it would not follow suit.”

Further to this, during a recent interview, a CFO from a FTSE 100 Energy company stated that “The energy market within Europe or internationally is clearly moving past oil and carbon source energy towards CO² free production facilities.”

Regardless of the recent situation in Japan, many world leaders have stood by the decision to build out their country’s nuclear capabilities, pushing towards stringent regulations that are forcing companies to drastically reduce their emissions.

The same CFO went on to talk more about this trend “I can see a lot of development into the green energy market, like the wind industry, like the solar industry, like the nuclear industry. All of these are considered to be a ‘green’ way of producing energy and many competitors and players within this industry are clearly shifting their position within the energy market, from a carbon to a CO²  friendly way of producing energy.”

But what has this got to do with procurement I hear you say. Procurement in conjunction with the R&D department should be at the forefront of the search for alternative solutions. Procurement, for the most part, is exposed to all inputs into a product/service and thus is best positioned to identify alternatives and present them to the board.

Those who are sceptical about alternative energy sources will soon be forced (whether through competitive forces or government regulation) to comply one way or another – it’s just a matter of time.

a) Do you think 'Green' Energy will ever surpass 'Non-Renewable' (If so, how soon)?

b) How do you see procurement's role changing within the Oil and Energy Industry over the next 5 years?

*  References
UK to miss crucial EU biofuel deadline
Rolls-Royce launches electric car at Geneva motor show