IE/Northwestern LLM Application. Question H. What do you believe are the greatest challenges facing the sector or industry you would like to specialize in at IE? What role do you hope to be able to play in this sector or industry in the medium term? 

1. B Y J A V I E R N I C O L A S B L A S S I O T T O

2. OIL VERSUS RENEWABLES ENERGIES,
TRADITION VERSUS PRAGMATISM.

3. T H E G R E A T E S T C H A L L E N G E A N Y S E C T O R O R I N D U S T R Y C O U L D F A C E I S N O T B E I N G
P R E P A R E D F O R C H A N G E . C H A N G E C A N B E A N O P P O R T U N I T Y T O G R O W A N D
I M P R O V E , T O M O V E F O R W A R D A N D B E A P I O N E E R , B U T I T C O U L D A L S O W E L L B E
T H E U N D E R T A K E R F O R M A N Y T H A T D O N ’ T F O R E S E E O R R E F U S E T H E C H A N G E .
T H E R E A R E N U M E R O U S C A S E S O F C O M P A N I E S , I N D U S T R I E S A N D E V E N E M P I R E S
T H A T H A V E P E R I S H F O R N O T A S S U M I N G T H E N E C E S S I T Y O F A C H A N G E ,
S O M E T I M E S F O R M E R E S T U B B O R N N E S S O R I N F L E X I B I L I T Y , L A C K O F V I S I O N A N D
O T H E R S J U S T B E C A U S E T H E W I L L T O C H A N G E C A M E W H E N I T W A S A L L T O O L A T E .

4. If we take a walk in the cemetery of history we
could find the graves of institutions that used to
rule the world, such as the absolute monarchy that
didn’t see the dagger coming when the world was
“discovered” round. This enlightened Descartes to
set the basis for modernity and later on the
majority of the society followed. Many heads rolled
and here we are, centuries later facing the same
dilemma. More recently companies that used to
monopolize the market like Blackberry,
Blockbuster, Nokia, Sega, Kodak, Pan Am -and the
list goes on- found that very same fate. Either
because they couldn’t catch up with new
technologies and competitors, or just because they
have not been able to interpret well enough the
new trends that consumers were following.
Will the oil industry follow the same fortune?
Certainly, if it is to remain passive.

5. T H E O I L I N D U S T R Y H A S C O M E A L O N G W A Y S I N C E T H E F I R S T ( E C O N O M I C A L L Y )
S I G N I F I C A N T O I L D I S C O V E R Y I N T E X A S . A S S O O N A S T H E I N D U S T R I E S S A W I T S
P O T E N T I A L T H E Y R A P I D L Y S H I F T E D F R O M C O A L E N E R G Y T O O I L , T H I S L A T T E R W A S
S U B S E Q U E N T L Y B O O S T E D B Y T H E G R E A T W A R A N D W W I I . E V E N A Y O U N G W I N S T O N
C H U R C H I L L , ( B Y T H E N F I R S T L O R D O F T H E A D M I R A L T Y , H E A D I N G T H E B R I T I S H R O Y A L
N A V Y ) , R E A L I Z E D T H E S T R A T E G I C I M P O R T A N C E O F O I L A N D A D D R E S S E D T H E N E C E S S I T Y
O F A C H A N G E W H E N H E D E C I D E D T O R U N T H E B R I T I S H F L E E T W I T H O I L I N S T E A D O F
C O A L . T H E A N G L O - I R A N I A N O I L C O M P A N Y ( A F T E R W A R D S A N G L O P E R S I A N , C U R R E N T L Y
B P ) W A S F O R M E D A N D N O W T H E C O N S E Q U E N C E S O F T H A T D E C I S I O N A R E O B V I O U S .

6. N O W A D A Y S T H E O I L I N D U S T R Y F A C E S A T R E M E N D O U S C H A L L E N G E , M A I N L Y
B E C A U S E T H E C H A N G E I S N O T T O O O B V I O U S F O R E V E R Y O N E T O S E E , O R
W O R S E , T O A C C E P T I T .
T H E P R O B L E M L I E S I N T H A T T H E M A J O R I T Y O F O I L C O M P A N I E S ( N A T I O N A L A N D
I N T E R N A T I O N A L ) A R E S T I L L Q U I T E P R O F I T A B L E E V E N W I T H L O W O I L P R I C E S ,
T H E I R R E S O U R C E S A R E S T I L L V A S T , T H E D E M A N D O F E N E R G Y I S S T I L L
I N C R E A S I N G ( E X P E C T E D T O I N C R E A S E B Y A R O U N D 2 4 % B Y 2 0 2 0 ) A N D T H A T T H E
P R O P H E C I E S O F R U N N I N G O U T O F O I L H A V E N E V E R C O M E T R U E , U N T I L N O W .
BP's North Sea Valhall oil platform in the North Sea

7. NEW TECHNOLOGIES SUCH AS HYDRAULIC FRACTURING AND HORIZONTAL DRILLING, SAND OIL AND IMPROVED GAS
LIQUIDIFICATION PLANTS HAVE HELPED TO PROVIDE MORE OXYGEN INTO THE INDUSTRY’S LIFE, LITERALLY HELPING
TO FLOOD THE MARKET WITH OIL AND GAS, ALLOWING PRICES TO DROP BY MORE THAN 50%.
IN ADDITION, ENERGY CONSUMPTION IS NOT DECREASING, BUT ON THE CONTRARY, THE GLOBAL DEMAND FOR
ENERGY WILL CONTINUE TO GROW. CURRENTLY, THE WORLD CONSUMPTION IS APPROXIMATELY 230 MILLION
BARRELS OF OIL EQUIVALENT PER DAY WITH OIL AND GAS SUPPLYING ROUGHLY 60% OF THE TOTAL DEMAND.
IT IS EXPECTED THAT OIL AND GAS SHOULD CONTINUE TO SUPPLY 60% OF WORLD ENERGY DEMAND BY 2020,
MEANING OIL COMPANIES WILL HAVE TO INCREASE PRODUCTION APPROXIMATELY BY 30 MILLION BARRELS OF OIL
EQUIVALENT.

8. SO, ONE MIGHT WELL THEN ASK, WHY THE INDUSTRY SHOULD CHANGE IF THEY SEEM TO BE DOING SO WELL?
THIS IS PARTIALLY TRUE, EVEN AFTER TWO YEARS OF RECORD LOW OIL PRICES, COMPANIES STRUGGLING FOR
SURVIVAL, MAYOR PROJECTS SHRINKING, THOUSANDS OF JOB SLASHED, AND TRILLIONS OF INVESTMENTS LOST, THE
INDUSTRY STILL REMAINS CONSIDERABLY STRONG.
IT IS PRECISELY BECAUSE OF ITS POSITION OF STRENGTH THAT CHANGE COULD LEAD TO SUCCESS.
RECENTLY THE INTERNATIONAL TARGET OF THE 21ST SESSION OF THE CONFERENCE OF THE PARTIES (COP21) HELD IN
PARIS, AGREED TO MAINTAIN THE GLOBAL TEMPERATURES TO BELLOW 2C, TO STAY INSIDE THE 2 DEGREE LIMIT,
ABOUT A THIRD OF THE WORLD’S OIL RESERVES AND HALF ITS GAS RESERVES WOULD HAVE TO REMAIN UNBURNED.
THIS IMPLIES THE OBSOLESCENCE OF FOSSIL FUEL PRODUCTION WITHIN THE NEXT FEW DECADES.
IF GOVERNMENTS, PUSHED BY A MORE ENVIRONMENTALLY AWARE SOCIETY, STICK TO THAT COMMITMENT, WILL
MEAN THAT OIL -AND FOSSIL- COMPANIES WILL HAVE TO CONSIDERABLY REDUCE GREENHOUSE GAS EMISSIONS
FROM THEIR PRODUCTS, OR SUFFER THE SAME FATE AS COAL COMPANIES DID.

9. T H E R E F O R E , O I L C O M P A N I E S N E E D T O R A P I D L Y I N C R E A S E T H E I R L E V E L
O F I N V E S T M E N T I N R E N E W A B L E E N E R G I E S ( C U R R E N T L Y T A K I N G 2 0 % O F
T H E G L O B A L M A R K E T ) D I V E R S I F Y I N G I T S P R O D U C T A N D H E N C E T H E R I S K
O F P U T T I N G A L L E G G S I N O N E B A S K E T . I F E N E R G Y C O N S U M P T I O N I S
S T I L L G R O W I N G , B U T O I L C O M P A N I E S A R E P R E V E N T E D O R L I M I T E D T O
M E E T T H I S D E M A N D S B Y S T R O N G R E G U L A T I O N S , I T S E E M S I N E V I T A B L E
T H A T E V E N T U A L L Y T H E Y W I L L S T A R T L O S I N G , L I T T L E B Y L I T T L E , T H E I R
S H A R E O F T H E E N E R G Y M A R K E T A G A I N S T C O M P A N I E S T H A T U S E N E W
T E C H N O L O G I E S A N D C L E A N E R P R O D U C T S .

10. INSTEAD OF FIGHTING AGAINST (LITERALLY) WINDMILLS AND NEW WAYS OF PRODUCING ENERGY, OIL
COMPANIES COULD JOIN FORCES AND MERGE WITH THEM IN ORDER TO CREATE A NEW TYPE OF
INDUSTRY, A MORE DIVERSE, CLEAN AND CONSUMER FRIENDLY.
THERE ARE CURRENTLY NUMEROUS INVESTORS THAT HAVE STOPPED SEEING RENEWABLES ENERGIES
AS NON-PROFITABLE PROJECTS AND A SMALL PORTION OF THE INDUSTRY (SUCH AS BP, SHELL AND
TOTAL) IS STOPPING TO SEE THEM AS A THREAT, THEY RATHER SEE AN OPPORTUNITY. ONLY THE MOST
DARING WILL SUCCEED TO SURVIVE A CHANGE THAT IS INEVITABLE. SOON THE RENEWABLE SECTOR,
STILL SMALL AND WEAK, BUT GROWING STRONGLY, WILL BE NOURISHED BY THE INEVITABLE
EVOLUTION AND WILL EVENTUALLY DEVOUR HIS OLDER BROTHER, JUST AS OIL DID WITH COAL.

11. B A S I C F A C T S :
- W O R L D E N E R G Y C O N S U M P T I O N : 2 3 0 M I L L I O N B O E / D .
- 8 0 % C O M I N G F R O M F O S S I L F U E L S . ( 6 0 % O I L A N D G A S . 2 0 % C O A L )
- T H E R E S T 2 0 % C O M E S F R O M W I N D , S O L A R , H Y D R O A N D N U C L E A R
E N E R G Y .
- W O R L D D E M A N D E X P E C T E D T O I N C R E A S E C . 2 5 % B Y 2 0 2 0 . ( I . E + 3 0
M I L L I O N B O E D ) .
- T O A C H I E V E T H E 2 D E G R E E B E L O W L I M I T , 1 / 3 O F T H E W O R L D ’ S O I L
R E S E R V E S A N D H A L F I T S G A S R E S E R V E S W O U L D H A V E T O R E M A I N
U N B U R N E D . R E S T R I C T I N G I N V E S T M E N T I N F O S S I L E N E R G Y .
- S O L A R P O W E R I N V E S T M E N T I N 2 0 1 5 : 1 6 1 B I L L I O N D O L L A R S .
- P R I C E O F S O L A R P A N E L S A N D I N V E S T M E N T D E C R E A S E D B Y 8 0 % .
( T H A N K S T O C H I N A , T H E Y P R O D U C E T H E S O L A R P A N E L S )
- S O L A R E N E R G Y P R I C E S A R E L O W E R T H A N O I L P R I C E S . B E T W E E N 4 0 A N D
9 0 D O L L A R S P E R M W H . ( D E P E N D S O N L O C A T I O N ) . O I L B A R R E L P R I C E
C U R R E N T L Y $ 5 0 ( A N D G O I N G U P ) .
- S O L A R A N D W I N D P R O J E C T S D E V E L O P I N G S T R O N G L Y I N C H I N A , I N D I A ,
M I D D L E E A S T , M E X I C O , U S A A N D L A T A M .
- I N 2 0 1 5 F I V E O F T H E B I G G E S T C O A L M I N E R S D E C L A R E D B A N K R U P T C Y .
- M A Y B E R E N E W A B L E S A R E F I N A L L Y A N A C H I E V A B L E F U T U R E .

14. W H A T R O L E D O Y O U H O P E T O B E A B L E T O P L A Y I N
T H I S S E C T O R O R I N D U S T R Y I N T H E M E D I U M T E R M ?

15. I A M C U R R E N T L Y W O R K I N G O N A P E R S O N A L P R O J E C T I N O R D E R
T O T A K E P A R T I N A R E N E W A B L E E N E R G Y P U B L I C T E N D E R T O B E
M A D E I N A R G E N T I N A . M Y R O L E I S T O P R O V I D E A D V I S E T O S O L A R
E N E R G Y F U N D S A N D C O M P A N I E S O N L E G A L A N D P O L I T I C A L
M A T T E R S .
I N T H E M E D I U M T E R M , I W O U L D L I K E T O B E P A R T , O R T O L E A D
A C O M P A N Y F O C U S E D O N R E N E W A B L E E N E R G Y P R O D U C T S A N D
S E R V I C E S . T H I S W I L L E N A B L E M E T O T A K E P A R T I N A W H O L E
N E W P R O C E S S O F C H A N G I N G O L D T E C H N O L O G I E S A N D
C U S T O M S T O W A R D S A C L E A N E R A N D S U S T A I N A B L E E N E R G Y
C O N S U M P T I O N .

16. The end.
Thank you for your reading!
J