Petronas must ramp up renewable energy

By ZAIDI ISHAM ISMAIL

We all know that one of the hardest hit casualties of COVID-19 is the oil and gas sector.

It's not so bad now as the lockdown has been lifted and vehicles are on the move again.

But in March during the movement control order, almost all vehicles in the country were at a standstill except for those involved in essential industries.

Ever since then, crude palm oil prices weakened but have since recovered slightly at current levels of US$40 per barrel.

It is a known fact that crude oil prices are volatile scratching as high as US$100 per barrel in 2008 and dived as low as US$20 last year.

This contrasting scenario gives the impression that the sector as well as crude oil prices will never be the same again.

The Economist featured an article last week entitled "Oil supply investments may have ended. Is it the end of the oil age."

The scenario put forth by the UK-based publication rings true. Has the oil age ended and will it roar back?

The mood was solemn and sombre at Petronas financial announcement three weeks ago when it announced a RM17 billion net loss for the first six months of the year.

This is in contrast with the RM27 billion it registered in the comparable period a year ago.

Even the mighty oil majors such as Shell and BP have remained quiet these days.

But BP announced plans last week that it will bolster its renewable energy capacity in wind, solar and biogas to 20 gigawatts by 2025 from 2.5 gigawatts at present.

Things have certainly changed from the high flying days when crude oil hovered above the US$100 per barrel.

Maybe it's also time for the government to give the national state-owned corporation a breather from paying dividends this year or the next or even for good.

Oil subsidies is not relevant anymore as petrol is now dirt cheap compared to mineral water.

The narrative to reduce dependency on fossil fuels has been bandied about for years.

But this time, it will perhaps be taken seriously and be accelerated due to COVID-19.

So what can the oil and gas industry players do to ride over the challenging times?

Maybe it's time for the sector to seriously give renewable energy a second look.

Oil and gas players could perhaps inject a new life into palm oil-based biodiesel or ethanol-based petrol.

Maybe the sector can give energy efficient vehicles a new lease of life.

Tesla's electric cars is flying off the shelves as we speak.

Roll out more electric and hybrid vehicles on the road.

Perhaps Petronas through its motor sports division can ramp up research and development in electric cars.

The narrative of using solar power, biomass-based energy derived from rice husks, oil palm and municipal waste might be cliched and rhetorical.

But are they really during this time? 

Given that oil prices has stagnated over the years, the authorities should give renewable energy alternative a serious second look.

Investment policies and political will must be rejigged before renewable energy can be churned.

ISIS director for technology, innovation, environment and sustainability Alizan Mahadi reportedly said on BFM oil prices are just way too volatile right now making it hard for oil majors to plan.

And the decline in oil prices may just be just that. A permanent decline.

It is time for Petronas to take stock of the industry and press the reset button for the long term betterment of the nation and above all the rakyat. - DagangNews.com

The writer is former NST Business assistant editor