Willie Wagen: Beyond the oil price
Willie Wagen: “It maybe that we’ll move away from just one strong indicator dictating everything"
There’s no going back says Willie Wagen, global vice president of sales and marketing and managing director Europe, Corvus Energy. “Regardless of a rise in oil price we won’t be seeing a simple ‘return to normal’.... we’ll be looking at a very different future.”
And it’s one in which oil may not have the same hold over us. “I think oil may well go the same way as coal. A few years ago that price was very important, but it’s not a leading industry indicator anymore.”
“If you remember, it used to be that a 0.1% movement on oil price had a huge impact - but that’s not quite such a central topic now. It’s pure speculation but I’m beginning to think we can see the effect already.”
He’s worth listening to. Although a little uncomfortable about getting a name as “the crystal ball guy” there is some justification in the monicker. His last role, as head of market innovation at Wärtsilä. involved creating visions of the future and helping industry shape its response to sweeping changes that threatened all certainties, whether regulation or finance and innovation.
He remembers it as helping business “make sense” of the turbulence. “The reason so many people talked about it was because everyone we discussed it with had some kind of gut feeling already - but they weren’t in a position to really think it through.” He adds that while initially confusing “I learned that if you systematically look into the trends and try to add them up, it actually gives you a pretty strong picture... and you learn quite quickly about what to rule out.”
One element to rule out was complacency about it all “blowing over”. He says: “It’s very easy to try and stick your head into the sand and wait for it all to pass – maybe it was a recipe that worked earlier, but I don’t think will work this time.” So his uncompromising message has been if you want to survive, “meet the challenge head on”. However, although the marine industry had a name for being “slow and conservative”, now it seems that “most companies are talking about digitalisation, they’re going for low or zero emissions and there’s absolutely nothing that isn’t changing”.
Which touches, once again, on the growing green trend. This, he says, has moved “away from a few guys in some dark lab... and out into the boardroom of all the influential companies”.
So, there are a number of drivers for his next prediction: “We are still far from it, but I see the beginning of a move away from oil-dependent economics.” More, industry may no longer be willing to face oil’s rollercoaster ride.
He explains: “It maybe that we’ll move away from just one strong indicator dictating everything, maybe there will be six or seven instead – all pulling in different directions.”
And no, despite what may have been assumed, seagoing transport will not simply switch over its allegiance to another hydrocarbon.
“It’s no longer easy to find a one-size-fits-all solution in this new world - or at least we haven’t seen anything like that yet,” he says. “While LNG will certainly play a role there are different biofuels and other liquid fuels emerging. Plus, there’s energy storage, and of course hybrids and combinations of all of these elements.”
He points to a growing fuel flexibility: “What we are seeing now is that there will be more power sources, different solutions for different operating profiles, different journeys with different bunkers.”
More, as the supply chain plays an ever-increasing part, there will be room for ‘local flavour’. This applies to the offering for industrial and domestic consumption: “Where there’s sun, there will be solar power” he says, pointing out that photovoltaics have seen prices plummeting: “We are already seeing projects where the price on solar energy to the grid has been $29 per megawatt hour.”
This is where his new role with battery developer Corvus comes in. “Most of these new methods of creating energy will eventually require some kind of storage, whatever form it takes. And here you go right back to the subject of batteries again.” Of course, transport will pick up the thread and want to make the most of what ever energy is available.
“Up till now batteries have played a limited role in the marine industry. They have been too heavy, they’ve been too big, and they’ve been too expensive. Now they’ve become half the weight, half the size and half the price, we’ll see more and more ship types where batteries give a good payback - without relying on subsidies,” he says. “We are just at the tipping point, where it really makes business sense to do it.”
One thing remains certain concludes Wagen: “The future holds more complex dynamics than anything we’ve seen in the past.”