The oil and gas industry must “radically engage” with renewables if it still wants a seat at the energy-negotiating table, according to Lord Browne.
The industry veteran tackled the two industries head-on at this year’s ONS, calling for a blend of approaches.
The former BP boss said the oil and gas sector was facing an “existential threat” from climate change.
“If leaders of the energy industry want to keep a seat at the negotiating table as society changes around us then we need to engage,” he said.
“We need to engage radically.”
The cost of wind power had fallen by 50%, according to the former BP boss.
“Wind and solar developed in a competitive auction without subsidies at just 3c per kilowatt hour,” he said.
He added: “Oil has a great advantage in life as it’s very difficult to find a cup of anything that has the same amount of power in it as a cup of oil.
“It’s very remarkable.”
However, how consumers use the cups is “changing over time”.
“We were very used to saying in the industry it really doesn’t much matter how the world is growing because demand for oil – because of things like transportation- meant it was going to grow anyway.”
“That is not the case now.
“There are more and more people living in cities and they have very different ways of conducting their lives and therefore their energy.”
He added: “This is not to say oil demand will shrink. It’s a question of growth and it’s very much on the margin.”
Margins he says have very big repercussions.
For example, a 1% shift can equate to billions of barrels.
Despite his call to action, there is no quick fix, according to Lord Browne.
“This is not a switch you turn on and say, ‘Right, oil gas today and renewables tomorrow’.
“It’s about a blend. It’s about a blend in strategy.”
He highlighted the telecommunications industry’s success in blending adjacent strategies.
He urged the sector to invest in adjacent strategies R&D, including capturing methane gases.
“There are plenty of places to find ways of making money and I still think it’s a great business because it will grow very fast,” he said
“It’s not for everyone and there will be some disasters. But I think it can be done with care.”
Ultimately, the oil boss said it will take “bloody leadership”.
“Oil and gas majors are well placed to pursue adjacent strategies on renewables and alternative energy,” he said.
“These are big challenges but as an engineer I’m always an optimist. I’m optimistic new technology will continue to push back the boundaries of what we once thought was possible.”