The oil industry had a terrible day last week in what one sober business paper described as "Black Wednesday" — likening it to the UK's devastating currency meltdown of 1992.
A series of shareholder rebellions at ExxonMobil and Chevron came alongside a court ruling against Royal Dutch Shell.
The Financial Times now describes May as the month the “weather changed” for Big Oil.
Only seven days ago the International Energy Agency (IEA) said it was time to call time on coal burned without carbon capture and the exploration of new oil and gas fields.
The G7 group also agreed on 21 May that all investments in unabated coal must end.
Like many attempts by historians to mark the decisive battle in a military war, it is often hard to pin down a turning point.
Pivotal moment?
I wrote in January in this column that the transfer of US political leadership from climate denier Donald Trump to green realist Joe Biden would be a defining moment.
Equally, I saw the Net Zero by 2050: A Roadmap for the Global Energy Sector report from the IEA on 18 May as a key moment.
So can the maritime world equally gloss over ExxonMobil being forced to put two new climate action directors on its board?
Can we ignore more than 60% of Chevron investors voting against the directors to start calculating the impact of its customers carbon emissions in its business model?
Should we downplay a court in The Hague demanding Shell reduce its overall CO2 output by 45% within nine years?
Critics will point to little change this week in oil company share prices, indicating many investors remain hopeful about Big Oil’s future.
Yet we have seen the introduction of the UK Emissions Trading Scheme with carbon prices trading higher than on the European Union emissions trading system, which itself has risen from below €10 ($12) in 2018 to above €55 in recent times.
Values have soared on the back of new climate commitments from a slew of countries.
I want to be crystal clear with you — fossil fuels have no viable future. That also goes for fossil gas, in the longer run
Frans Timmermans, the EU vice commissioner in charge of the Green Deal
Crystal clear
Germany, the EU’s largest economy, has just introduced its own national CO2 emissions trading scheme covering cars and buildings.
The EU’s Green New Deal in July will reveal details of plans for a carbon border adjustment mechanism to enter into force no later than January 2023.
Frans Timmermans, the EU vice commissioner in charge of the Green Deal, told a gas conference at the end of March: “I want to be crystal clear with you — fossil fuels have no viable future. That also goes for fossil gas, in the longer run.”
He insisted that new pipelines should only be built for handling hydrogen not natural gas.
The US, China and UK are all reported to be considering their own plans for a maritime carbon tax, following on from what the EU does in July.
All and none of this will not kill the coal-carrying bulker or the crude and product tonnage dead overnight, clearly, especially as some countries are still loath to play along.
But it is time all of these new developments were hot-wired into all investment decisions around ships, not just discussions about which low or no-carbon propulsion system to use.
Opportunities for offshore supply vessels will now never properly recover in the oil sector post-Covid, though offshore wind will take up a little bit of the slack and grow strongly.
The longer-term future for crude oil and product tankers is surely diminished and even the expected growth trajectory of LNG should be questioned.
Arctic opportunity
There are counter currents. Russia, which sees global warming in the Arctic as an opportunity to bring more tonnage through the Northern Sea Route, is spending more than $10bn upgrading its Trans Siberian and Baikal-Amur railways to carry more carbon-heavy coal to China.
Even European climate leaders are aware that pressing ahead with measures that could raise prices for the least well off in society could lead to serious political trouble if it is handled carelessly.
Emmanuel Macron’s stand-off with the yellow-vested protest group gilet jaune on the streets of Paris in 2019 is a warning to all.
But the last week shows the energy transition is on its way and shipping will be sunk if it is not ready for the big green wave.
