Let’s start with a vivid snapshot of 2022. The energy world was in chaos. Prices for oil, gas, and electricity hit record highs, supply chains faltered, and companies raced to keep operations running. The Ukraine war acted as a catalyst—think of it as a massive domino effect. Europe’s gas supplies were cut off, and countries like Germany, which relied heavily on Russian gas, faced a sudden scramble for alternatives. Meanwhile, in Australia, electricity bills surged by 35% 

pushing families to choose between heating homes or buying groceries.

But here’s the twist: Not everyone panicked. Companies like Shell stayed calm. How? They had a secret weapon: enterprise risk management (ERM). ERM isn’t just a fancy term—it’s a survival toolkit. It’s like having a roadmap that helps businesses spot storms before they hit, plan for the worst, and stay steady when markets collapse.

What Caused the Mess?

The crisis had three main villains:

1. Geopolitical Drama: The Ukraine war disrupted global gas supplies. Russia’s cut to Europe’s pipelines forced countries to hunt for alternatives, like U.S. liquefied natural gas (LNG) or Middle Eastern oil. This shift reshaped global energy politics, with nations rethinking their energy partnerships.
2. Supply Chain Chaos: Getting fuel or equipment became a nightmare. A single port shutdown or a storm could stall projects for months. For instance, a shortage of specialized equipment in the U.S. delayed wind farm construction, pushing costs higher.
3. Price Spikes: Energy costs hit unprecedented highs. In Europe, households faced bills so steep that some skipped meals to pay energy bills. Companies saw profit margins shrink, and small businesses struggled to survive.

These challenges weren’t random—they exposed how fragile the energy world is. Companies that ignored risks paid the price. Others, like Shell, had a plan.

How ERM Kept Companies on Track

ERM isn’t magic—it’s a survival habit. Here’s how it works in simple terms:

• Spotting Trouble Early: Shell’s teams tracked gas prices and political tensions. When Russia cut supplies, they already had backup suppliers in the U.S. and Qatar lined up.
• Staying Flexible: They didn’t rely on one fuel source. Instead, they balanced oil, gas, and renewables. For example, they ramped up solar investments in sunny regions while keeping gas as a backup.
• Teamwork: Shell worked with governments and suppliers to share risks. They even shared data with rivals to stabilize markets, showing that collaboration can be a lifeline.

An energy expert summarized it best: “ERM isn’t just about avoiding disasters—it’s about turning risks into opportunities 

For Shell, this meant turning a crisis into a chance to strengthen their position.

The Big Challenges Energy Companies Faced

The 2022 crisis wasn’t just about high prices. Companies grappled with deeper issues:

• Going Green, But Slowly: Switching to solar or wind is hard when gas prices are low. Many firms got stuck between old and new energy. For example, a coal plant in Poland faced protests for not shutting down, but switching to renewables would cost billions.
• Tech Gaps: Renewable energy tech like batteries or grids isn’t ready for prime time. The U.S. is racing to mine minerals for solar panels, but mining projects face delays due to environmental concerns.
• Costs Skyrocketing: Even small projects got pricier. A simple power plant upgrade could cost twice as much as before.

Imagine trying to build a new wind farm while dealing with supply delays and rising costs. No wonder some companies froze.

Shell’s Secret Sauce: A Real-Life Survival Story

Shell’s story is a masterclass in staying steady. Let’s dive deeper into their strategy:

• Backup Plans: Years before the crisis, Shell had signed deals with LNG suppliers in the U.S. and Qatar. When Russia cut gas, they switched to these partners, avoiding supply shortages.
• Reading the Tea Leaves: Their teams guessed demand would drop in colder regions (due to mild winters) and rise in Asia. They adjusted production to match, saving millions.
• Teamwork: Shell shared data with governments to secure emergency gas storage. They even partnered with rivals to stabilize markets, showing that collaboration can be a lifeline.

The result? While rivals faced shutdowns, Shell kept operating. Their ERM wasn’t perfect, but it gave them a fighting chance.

How to Stay Steady After the Crisis

The storm might have passed, but the world is still shaky. Here’s how companies can stay ready:

• Don’t Put All Eggs in One Basket: Mix fuels—gas, renewables, even hydrogen. For example, a European utility company now runs a hybrid grid, using wind energy when available and gas when it’s not.
• Tech Upgrades: Use apps to track prices and political risks in real-time. A French energy firm now uses AI to predict supply chain delays, cutting costs by 15%.
• Team Up: Partner with governments to build emergency energy reserves. The EU now stockpiles gas, and countries like Japan are investing in hydrogen storage.

The key? Think ahead. If you wait until prices spike, it’s too late.

Quick Tips for Energy Managers

Here’s a no-nonsense guide to ERM:

1. Plan for the Worst: Imagine a scenario where gas prices double again. How would you react?
2. Green Isn’t Just Trendy: Weave eco-friendly goals into your risk plans. For example, a solar farm could save money and cut carbon emissions.
3. Use Tools: Apps like predictive analytics can warn you if a supplier might fail.

Remember: ERM isn’t a one-time task. It’s a habit.

Why This Matters for Your Business

The 2022 crisis was a wake-up call. Companies that ignored risks paid the price. Those with ERM survived—and even thrived.

Take a moment to ask yourself: Is my business ready for the next crisis?

Ready to build your survival plan? Drop us a line at iRM’s Contact Us page and let’s talk about how ERM can keep your business steady, no matter what the future holds.