Ending the Oil Age » IAI TV (2023)

In September 2014 the $860-million Rockefeller Foundation made an historic announcement. Timed to coincide with massive marches for climate action all over the world, the fund revealed it was going to divest from fossil fuels. Following in the footsteps of the World Council of Churches, the British Medical Association and Stanford University, the latest major institution to make such an announcement is also the most symbolic. Because the Rockefeller fortune owes its very existence to oil.

The Rockefeller story is also the story of the rise and fall of the first ‘oil major’. Standard Oil, founded by John D Rockefeller in 1870, soon came to control the burgeoning US oil industry, from extraction to refining to transportation to retail.

It built an unprecedented monopoly that became so publicly despised that the US government broke it up – birthing Exxon, Mobil and Chevron, among others.

The forced break-up created the Rockefeller millions. A century later, those millions are being used to make a dramatic point: we are witnessing the beginning of the end of the oil age.The age of oil has been one of staggering inequality. The discovery of hydrocarbons has brought fortune to the few and misery to the masses. Many oil-rich countries suffer distorted economic development, financial instability, repressive authoritarian rule, stifled human rights, soaring poverty and pervasive corruption.

In the oil-addicted West, its toxic political influence echoes through domestic and foreign policy. Today’s oil majors deploy their power deftly, and devastatingly, their probing tentacles lubricated by de facto impunity and state collusion. The CEO of Exxon clicks his fingers: national armies are mobilized. Shell’s chair has a quiet word: democratically agreed policies are shelved.

Collision course

Yet change is coming. The dominance of the oil majors is being assailed from all sides. Oil’s future is looking increasingly – exhilaratingly – shaky.

Oil companies’ current extraction plans for the next two decades set us on course for a six-degree global temperature rise and an unliveable planet. To have a chance of keeping the rise to a disruptive but not catastrophic two degrees, we need to leave 80 per cent of known fossil-fuel reserves in the ground.[1]

Furthermore, financial markets and economies have got used to treating oil as infinite. But all the easy-to-extract crude has already been found, and largely consumed.


Now, most available oil is either in politically dysfunctional regions such as the Middle East and Nigeria, or in locations and forms that are much more expensive and risky to extract – tar sands, oil shale, ultra-deepwater, the Arctic.

The oil majors are pinning their future drilling hopes on these ‘unconventional’ or ‘marginal’ sources of oil. But the technical risks of new oil projects have risen ‘to never before seen levels’, investors are warned by financial overlords Goldman Sachs.[2] So capital expenditure – the amount companies have to invest to get new sources of oil flowing – has gone through the roof, while their all-important ‘Reserve-Replacement Ratio’ (by which markets judge their value) has plateaued. In a nutshell, oil is becoming less profitable.

The strain is starting to show. Companies are shelving major tar sands projects, denting their portfolios considerably. This year has seen Statoil’s multi-billion dollar ‘Corner’ development put on ice, Total and Suncor’s $11-billion Joslyn project suspended, and Shell’s massive Pierre River mine plans mothballed.[3]

Shell has spent $5 billion so far trying – and failing – to drill in the inhospitable Arctic. Total has said it won’t even try. Even the US boom in ‘tight oil’ from shale fracking, which is hailed as the key to US ‘energy independence’, rests on extremely shaky foundations. Shale oil wells deplete in a matter of months, and the costs of constantly drilling new ones keep profit margins low. Predictions for how much recoverable shale oil is in the ground have been downgraded dramatically.[4]

All this new oil is only really viable if the price is above $100 a barrel. At the time of writing, it isn’t – and there’s no guarantee prices will rise enough over the next decades as the renewables boom starts to give oil a serious run for its money. Nevertheless, we cannot just sit back. Big oil may be on its way out, but left to its own devices it will take us all with it. There is still more than enough recoverable oil in the world to fry us.

Global oil demand, if there are no interventions for climate or other reasons, is projected to continue to rise until at least 2020,[5] and despite supply constraints, oil companies are planning to more than meet that demand. Current investment decisions on pipelines, tar-sands mines and offshore fields will spawn infrastructure that will lock us into a high-carbon world for decades.

We need to hasten oil’s demise – for the sake of our warming climate and collapsing ecosystems, and in the service of democracy, poverty alleviation and justice.

It will be technically possible to meet the world’s energy needs, and give the Majority World’s growing populations equitable access to the energy the rich world currently hogs, using a combination of existing renewable technology and energy efficiency.[6] Renewable generation is now breaking records almost daily, and reaching price parity with fossil fuels in many parts of the world.[7]

What is missing is the political will to kick oil to the kerb.

Carbon bubble

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The hope that Big Oil can be stopped comes in many forms, but perhaps the most surprising is the investment community. Carbon Tracker, a thinktank of shareholder activists and financial specialists, has been sending shockwaves through the investment world since 2012 when it first revealed the scale of the ‘carbon bubble’ that is building. Looking at the oil industry trends of skyrocketing capital expenditure, shrinking profit margins, intensifying risk and dwindling reserves, it concludes that $1.1 trillion of oil investment over the next decade needs to be challenged by investors as potential ‘stranded assets’ – projects that will never come to fruition in the face of more decisive government climate action and competition from renewables.

When I met Carbon Tracker’s founder and CEO Mark Campanale, he was buzzing with the possibilities their work unlocks: ‘The International Energy Agency says that, to 2035, $21 trillion will be spent on developing the oil and gas sector, which is extraordinary at a time when we know we’ve already financed the development of enough fossil fuels to take us beyond two degrees. It’s complete madness.’ Then his eyes light up: ‘This is where the money is going to come from for the low-carbon transition.’

Carbon Tracker is certainly being listened to by the financial sector – as its Chair Jeremy Leggett outlines in more depth on page XX. But financial arguments will not be enough on their own. Mark argues that what oil companies should be doing is giving capital back to shareholders – rather than investing it in ever more expensive extraction projects.

This is starting to happen in a small way. Conoco has contracted in size, preferring to focus on ‘high-value’ projects. BP and Shell have been selling off projects to provide their shareholders with healthy dividends. Mark wants to see this trend accelerate until the oil companies are mere shadows of their current bulks. But whether that money is reinvested in a low-carbon economy relies on the whims of largely unaccountable investors.

Organizations such as London-based ShareAction are working with pension funds and their members to encourage them to reinvest in the service of a climate-friendly future.[8] But depending on investors has clear limitations. We can’t expect an out-of-control financial sector driven by profit to reallocate capital in a way that takes into account justice or allows power and control to become more decentralized. Indeed, our current system of turbo-charged capitalism developed arm in arm with Big Oil. They will not break ties easily.

The push for non-market-based solutions that curtail the oil industry, redistribute power and wealth, and have justice at their core, must come from outside the financial system.

Shattering Big Oil’s pipe dreams

People have been resisting oil companies since the dawn of the oil age. Stalin cut his political teeth fighting the oil magnates of Azerbaijan. The Ogoni people kicked Shell out of Ogoniland in Nigeria in 1995, though Ken Saro-Wiwa and eight others paid the ultimate price (see page XX). But in recent years we have seen a new wave of anti-oil activism, with multiple groups strategically identifying where Big Oil is vulnerable, and targeting those chinks in its armour.

One of these is the divestment movement, which has taken the world by storm in the last 18 months. Deftly combining the carbon bubble financial argument with the moral imperative to act urgently on climate change, groups of students, churchgoers and local residents have approached public institutions and states with the argument that the time has come to sever their financial ties with the fossil-fuel industry.

This year, 181 institutions around the world have pledged to divest more than $50 billion. The campaign continues to gather momentum, with big-hitting champions such as Desmond Tutu, UN climate chief Christina Figueres and, of course, the Rockefellers.

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350.org is a driving force behind the ‘Fossil Free’ movement, and one of its campaigners, Louise Hazan, explained to me the thinking behind it: ‘The primary aim is to stigmatize the fossil-fuel industry to a point where it weakens its grasp over the political system, and the ways it influences the process and blocks progress on climate change.’

The divestment campaign is one of several that are directly challenging Big Oil’s ‘social licence to operate’ – the public support, or at least acquiescence, that allows oil companies to continue. This social licence is carefully cultivated and maintained through partnerships with a range of cultural, scientific and educational institutions – and these are increasingly being targeted by groups seeking to make association with oil companies a social no-no. (See page xx [My Spy]) The recent opening of the (notorious oil billionaire) David A Koch Plaza outside New York’s Metropolitan Museum of Art was met with creative protests and arrests. Greenpeace’s campaign telling Lego to end its partnership with Shell seeks to shame the toy-makers into dumping their oily benefactor.

Movements on the ground are also seeking to physically block the expansion of Big Oil’s most destructive projects – and are starting to win. The most visible has been the campaign to stop the proposed Keystone XL pipeline, which would bring tar sands oil from Northern Alberta in Canada down to Texas to be exported to new markets. Approval for the pipeline has been delayed for six years thanks to a powerful coalition of Indigenous communities, landowners, grassroots activists and environmental NGOs that spans the entire route. The campaign has reignited the US climate movement, provoking waves of direct action, huge demonstrations, mass arrests and celebrity support, and even turning it into an election issue.

A similarly epic battle is being fought against the Enbridge Northern Gateway pipeline, slated to take tar sands across British Columbia. After years of opposition-induced delays it has now been approved in theory, but a massive coalition of First Nations and residents has sworn it will never be built.The origins of this push to ‘leave the oil in the soil’ can be traced to Latin America, where for years Indigenous communities have been locked in conflict with governments over oil extraction in the Amazon. This spawned the bold grassroots proposal to leave oil under Ecuador’s Yasuní national park unexploited, with international financial support.

Despite the proposal being abandoned last year by oil-hungry President Correa, the grassroots movement of ‘Yasunidos’ lives on, mobilizing hundreds of thousands of Ecuadorians to demand the oil remains untapped.

At the top of the world another frontier battle rages – to stop oil drilling in the Arctic. Greenpeace has been the most visible player, with its daring direct actions to block rigs drilling in icy seas. But years of dogged legal challenges by Alaskan Native groups and NGOs have also been crucial in preventing Arctic pioneers Shell from yet squeezing their first drops of oil out of the fragile frozen seabed.

Transform or die

As the oil industry overshoots its limits in every direction and turmoil in the Middle East snowballs, the arguments for an immediate co-ordinated move away from oil dependence are overwhelming.

We need a managed and fair transition, not a massive oil shock which could plunge the already fuel-poor into further hardship and breed economic and social pandemonium. If today’s anti-oil social movements continue to strengthen, this could happen: through the physical disruption of operations by local resistance, pressure from shareholders, the erosion of oil companies’ social licence, the boom in renewable energy, and public pressure on governments to take more decisive climate action.

The oil majors will be forced to retreat. Some will disappear. Perhaps there will be enough political will for states to break them up, like Standard Oil. More likely, in the short term, they will suffer painful economic shocks as their favourable terms of trade evaporate, dwindle rapidly as investors remove their capital, be asset-stripped by corporate raiders, and find themselves forced to transform or die. However it happens, the oil majors will ultimately become oil minors, relinquishing their vice-like grip on the political process and making a more diverse, decentralized and democratic energy future possible.

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‘We will see the end of the oil companies in the rear-view mirror,’ predicts Big Oil’s long-term adversary James Marriott, who co-founded Platform over 30 years ago to monitor, expose, communicate and inspire creative resistance to the industry. ‘The last thing to disappear – like the smile on the Cheshire cat – will be the logos.’

James, who follows trends in the world of oil more than most, says he is feeling ‘immensely optimistic’ these days. ‘It’s obvious the oil industry is coming to an end. So what is the society we want to build in its wake?’ These seismic shifts bearing down on our civilization could spawn chaos. But if progressive social movements can seize the moment, then the end of the oil age could also be the end of a multitude of wrongs.

This article was originally published on New Internationalist.

Image credit: SkyTruth

[1] Carbon Tracker, ‘Unburnable Carbon’, 2012, carbontracker.org/report/carbon-bubble/

[2] Goldman Sachs, ‘380 Projects to Change the World’, April 2013, p. 123.

[3] Reuters, ‘Keystone XL foes claim victory as Statoil delays oil sands plan’, 26 September 2014 nin.tl/statoildelay

[4] Reuters, ‘U.S. EIA cuts recoverable Monterey shale oil estimate by 96 pct’, 21 May 2014, nin.tl/Montereyestimate

[5] IEA, World Energy Outlook, 2013

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[6] Danny Chivers, ‘Two Energy Futures’, July 2013, twoenergyfutures.org

[7] Paul Brown, ‘Political will is only barrier to 100% renewables’, Climate News Network, 19 September 2014, nin.tl/100renewables

[8] shareaction.org/greenlightcampaign


What is the end of oil age? ›

A new report suggests that over the next 30 years, at least 80 percent of the oil industry will be wiped out. The oil industry is on the cusp of a process of almost total decimation that will begin over the next 30 years, and continue through to the next century.

What is the age of petroleum? ›

70% of oil deposits existing today were formed in the Mesozoic age (252 to 66 million years ago), 20% were formed in the Cenozoic age (65 million years ago), and only 10% were formed in the Paleozoic age (541 to 252 million years ago).

Why do we subsidize oil companies? ›

Consumption subsidies, meanwhile, cut fuel prices for the end user, such as by fixing the price at the petrol pump so that it is less than the market rate. These are more common in lower-income countries — in some, they help people to get clean cooking fuel they couldn't otherwise afford.

Do we only have 40 years of oil left? ›

Globally, crude's reserves-to-production ratio has hovered between 40-55 years. The 1P estimate is an estimate of proven reserves, what is likely to be extracted from a well, 90% probability.

Will there be oil in 2050? ›

Despite the fact that renewables will be the fastest-growing energy source in the United States over the next three decades, petroleum and natural gas will remain the most-consumed sources of energy in America through 2050.

Will oil be used in 50 years? ›

That being said, at current consumption, we have by some accounts an estimated 47 years of oil left to be extracted. That equates to somewhere in the region of 1.65 trillion barrels of proven oil reserves. Other sources up this estimate a bit, but most agree we have around 50 years left, give or take.

How much oil is left? ›

The estimated reserves are about the same - 1.5 trillion barrels of oil. So if we use up all the world's reserves, we will burn as much oil in the 50 years from 2018 to 2068 as we did in the 68 years from 1950 to 2018.

How many years of petroleum are left in the US? ›

Oil Reserves in the United States

The United States has proven reserves equivalent to 4.9 times its annual consumption. This means that, without imports, there would be about 5 years of oil left (at current consumption levels and excluding unproven reserves).

How much would gas be without subsidies? ›

Clean energy technologies have often been accused of not being able to be implemented without subsidies; however, no energy sector has ever been developed without subsidies. Without subsidies we would all be paying roughly $12.75 per gallon for gasoline.

What is the most subsidized industry in the United States? ›

Fossil fuels still receive massive government subsidies

The Environmental and Energy Study Institute found that the US government alone spends $20 billion every year on direct fossil fuel subsidies. Of that figure, around $16 billion goes towards oil and gas, while the remaining $4 billion benefits the coal industry.

Does China subsidize oil? ›

In total, 63% of the G20's public finance for energy went to fossil fuels in 2019–2020. The countries with the highest total subsidies for fossil fuels were China, Indonesia and the UK.

Which country has the most untapped oil reserves? ›

Venezuela has the largest amount of oil reserves in the world with more than 300 billion barrels in reserve.
How the accessibility of oil reserves impacts profitability
  • Venezuela - 303.8.
  • Saudi Arabia - 297.5.
  • Canada - 168.1.
  • Iran - 157.8.
  • Iraq - 145.
  • Russia - 107.8.
  • Kuwait - 101.5.
  • United Arab Emirates - 97.8.

Can we ever live without oil? ›

Agriculture could continue on a smaller scale, following the old ways and with a more seasonally based, local range of foodstuffs. Converting to living without oil for maintaining basic everyday life would require at least 10-20 years, Johansen estimates.

Does the earth keep making oil? ›

However, petroleum, like coal and natural gas, is a non-renewable source of energy. It took millions of years for it to form, and when it is extracted and consumed, there is no way for us to replace it. Oil supplies will run out. Eventually, the world will reach “peak oil,” or its highest production level.

What will replace oil in the future? ›

Solar power is one of the most promising alternatives to oil. It is clean and renewable, and it doesn't produce any emissions that contribute to climate change. What is this? Solar energy is also becoming increasingly affordable, thanks to advances in technology.

Which country is oil free? ›

Luxembourg has the world's highest GDP per capita but no crude reserves. Lebanon, one of the poorest nations, is in the same position. Hong Kong is one of the smallest countries in the world geographically, while Kenya is among the largest. Neither has any proven reserves.

Will we ever reach peak oil? ›

A recent OPEC outlook report estimated steadily increasing demand, which would result in peak oil in approximately 2040. The International Energy Agency and U.S. Energy Information Agency foresee oil demand “plateauing” and recommend immediately exploring alternatives to sustain energy needs.

Will there be oil in 2030? ›

The largest increases in production to 2030 come from the US, Middle East members of OPEC, Guyana, and Brazil. The OPEC share of oil production rises from 35% in 2021 to 36% in 2030, and 43% in 2050.

What will happen at the end of oil? ›

Without oil, cars may become a relic of the past. Streets may turn into public community centers and green spaces filled with pedestrians. Bike use might increase as more people ride to school or work. The Earth will begin to heal from over a century of human-caused climate change.


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