Monday, March 24, 2014

Interview with an Oil Company CEO

This is a fictional (but very feasible) interview to an oil company CEO.

GNWR: Thank you, Mr. Oil for accepting to participate in this interview.

CEO: It is my pleasure.

GNWR: In this day and age of global warming, why do you continue to drill and produce oil.

CEO: I ultimately have two bosses, our millions of customers and the board of directors. Customers demand more and more oil in the form of gasoline, diesel, airplaine fuel and other feed stuff. We have to listen to our customers and provide them with what they want. Even though fuel use in the USA and Europe has shown little growth lately, other areas of the world literally can't get enough of the substance. I'm talking of China, LATAM, Africa and India to name only a few.

GNWR: And your second customer?

CEO: Yes, they are the board of directors together with all stockholders. They are VERY demanding, you don't have an idea how much, and they want higher returns on their investments.

GNWR: But, why don't you move your company toward renewables?

CEO: Are you kidding? Renewables almost fully depend on government subsidies. The minute those subsidies are removed, and I mean the minute, that industry will come crashing down. As a CEO I would never gamble with my multi-billion company that way.

GNWR: But, aren't we eventually running out of oil?

CEO: There is no argument with that, but I have to face the market every quarter, I have no time to waste mulling what will happen in 100 years or so. The market is relentlessly harsh and I have to face it four times a year, at the very least. If the company is not performing financially the CEO is the first one to be blamed and frankly, I don't want to lose my job.

GNWR: Is there anything that would conceivably make you decide to move your company away from oil?

CEO: Certainly. If people massively stopped buying gasoline, diesel, all the other final products of oil then we would have to move to something else or maybe even go bankrupt. But thank goodness this is far from happening. Actually every year the consumption of oil goes up, so we are still safe for a long time to come.

GNWR: But, what about global warming?

CEO: I am a believer in global warming but, what are we going to replace oil with? We have nothing in the pipeline and for the people alive today the consequences of energy scarcity would be worse than the consequences of global warming.

GNWR: Would a carbon tax affect your company?

CEO: Yes, it would tend to increase efficiency and reduce consumption but the energy requirements of the world are still booming. A carbon tax wouldn't be fatal for most private oil companies. Actually it wouldn't even be that harmful to us as we would obviously pass the higher costs to the ultimate consumer.

GNWR: What is your vision for the future of the industry?

CEO: For the next 30 to 50 years, it would continue to operate in an almost business as usual way. Eventually humanity WILL have to move away from oil.

GNWR: What are the alternatives.

CEO: Aside from other fossil fuels which would nonetheless continue to be high carbon emitters, the obvious alternative is nuclear. I don't mean nuclear like the current reactors in operation, I mean more advanced designs.

GNWR: Mr. Oil, thank you very much for your time.

CEO: It is always a pleasure.

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