In short, the realities of energy in the late 2000s are contradicting perceptions and expectations from all quarters. The world has discovered in the last few years what some energy experts have been warning of for decades: Civilization’s reliance on fossil fuels is, in the long run, unsustainable. At the same time, scientific consensus on the dangers of global warming has been reached. It cannot be ignored or dismissed: Humans need to sharply slow the growth of greenhouse gases to avoid irreparable damage to the environment. This will limit the options that companies and nations have to meet future energy needs. And it will accelerate the shift away from fossil fuels to more sustainable forms of energy.
Amid all the uncertainty about the future of energy, however, two things are certain: The energy shift is already happening, and it will continue. As it proceeds, this shift will transform the commercial, industrial, and consumer landscapes of the world throughout the 21st century. For business leaders, the status quo is not an option. The corporate energy policies that have been adequate in the past will be inadequate in the future.
Eric Spiegel is a senior partner based in McLean, Va., who leads Booz & Company’s work for global energy and utilities clients. He has more than 22 years of related consulting industry experience in leading major energy client assignments in Asia, the Middle East, Europe, and the United States.
Neil McArthur is an Amsterdam-based senior partner with Booz & Company who leads the firm’s European energy, chemicals, and utilities practice. He has more than 24 years of industry and consulting experience and serves on the firm’s Executive Committee.
Also contributing to this article was Booz & Company Senior Executive Advisor Bert Shelton.
This article was adapted from Spiegel and McArthur’s forthcoming book (with Rob Norton), Energy Shift: Game-Changing Options for Fueling the Future (McGraw-Hill, 2009).