How Oil And Gas Is Being Affected By Climate Change – Response To A Presentation In Mid-America.

Originally published on Forbes.com on April 25, 2022

The subject is a dilemma because the oil and gas industry has lifted whole populations to a higher quality of living while also raising greenhouse gases to a controversial level. 

Independence, Kansas, is a small conservative town in the heart of the USA. The area produced oil for decades, before natural gas from coalbed methane became big in the 1990s and 2000s. Huge wind farms have sprung up in the past few years not far away and provided Kansas with over 40% of its electricity in 2019 — over 25 GWh (million Kilowatt-hours). The state is #1 or #2 in wind energy in the USA. The highest level of wind speeds occur in large areas around historic Dodge City.

I was eager to see how attendees would respond to a talk I presented last week entitled, “Climate Change and How it’s Affecting the USA, the Oil and Gas Industry, and Ourselves.”

What was presented:

Here is a summary of the main points that were presented:

• Global warming is true.
• It has been verified by glaciers retreating, by Arctic ice melting, by sea level rise, and by coral reefs bleaching.
• Global warming is caused by greenhouse gases (GHG) that are increasing in the atmosphere. The main two GHG are carbon dioxide and methane.
• In the last 40-50 years carbon dioxide (CO2) levels have reached 415 ppm, higher than in the last 3 million years. The temperature has risen in lockstep with the CO2, as if the CO2 is pulling the temperature higher (Figure 1).

Figure 1. Source: NOAA.

• Climate scientists predict from their models that if greenhouse gases are not controlled, the global temperature will rise to the highest it’s been in 1 million years by the year 2100. Earth will be in a twilight zone and terrible things will likely happen in the form of droughts, wildfires, super-storms, and hurricanes. To avoid the twilight zone, scientists say we need to act hard and fast to reduce GHG emissions.
• The oil and gas industry is responsible for 50% of the world’s greenhouse gases, so they are culpable.
• But oil and gas has provided many benefits to our civilization. Cheap and reliable oil and gas fuels for cars and trucks and electricity for homes and industries. The US is self-sufficient in oil for the first time since 1947. Energy security is important, as we are finding out from the Russian war in Ukraine. All sorts of things depend on petroleum products: Plastics that we depend on in our homes and offices. Clothing that we wear. Meds that we take. Entire strata of countries have been lifted into the middle class via oil and gas.
• So the world has benefited from, and is still dependent on, oil and gas – but this same oil and gas is the cause for 50% of global GHG and global warming. What can/should oil and gas (O&G) companies do to resolve this dilemma?
• O&G companies are responding in four ways:
  • Stopping gas flaring at wells.
  • Finding and fixing methane leaks in wells, pipelines, storage tanks, gas processing facilities.
  • Installing green operations, e.g. gas turbines that pump fracs instead of diesel fuel.
  • Investing in renewables.
• Proactive efforts have started.
  • Group 1 is reducing GHG from all their operations. Examples are ExxonMobil and Pioneer in the Permian basin.
  • Group 2 is investing in carbon capture and storage. Occidental and ExxonMobil are prime movers.
  • Group 3 is investing in renewables. bp and Equinor are showing the way by installing huge offshore wind systems, notably off the northeast coast of USA.
• International companies and countries are showing what’s feasible, and here are a few examples:
• Plans by TotalEnergies include in a 2022 budget $500 million for E&P, $500 million for wind and solar renewables, and $500 million for biogas and hydrogen renewables.
• The small state of South Australia has hit 100% renewable electricity for a day or two via onshore wind farms and is heading toward 100% permanently in the next few years. This is despite the fact they produce significant oil and gas. Although they closed their only coal-fired power plant several years ago, they keep gas-fired plants as backup. The biggest grid-scale big-battery in the world was built in 2016 to stabilize the wind power system.
• By 2030, Australia as a whole is expecting almost 80% renewables (now at 28%), with most coal power plants closed down. This changeover is attributed to a rapid drop in costs of solar, wind, and big-batteries, plus demand by industry for cheaper and greener power.
• Denmark, a small country that leads the world in wind power, recently stopped exploration for oil and gas, and plans to finish their considerable oil production in the North Sea by 2050. Wind power creates 50% of their electricity, more than any other country (US is 8.4%), and Denmark constructs massive numbers of wind turbines for other countries. They also plan to spend $34 billion to build an artificial, green energy island, starting in 2026, that would collect and store energy from an offshore wind system.
• What will the year 2050 look like?
  • Oil and gas share of the world’s energy mix has dropped to 40% (from 53% now).
  • Solar, wind, and hydroelectric make up about 50%.
  • The number of EVs has skyrocketed from less than 10% to about 90%.
  • Renewable energy will provide 70% of global electricity by 2050.
  • Coal use in power stations will disappear.
  • Emissions of energy-related carbon dioxide have been sliced in half, but….
  • The planet’s temperature warms by 2.5 C since the industrial revolution.

Questions from the audience and answers:

Q1. A man said his son is a project manager for wind farm installations. He said his son is busy, busy, busy — all over the USA. His son told him of a rancher who has several turbines on his property. In a bad year, the income from leasing the turbines makes up for his other financial losses. Answer: Leasing payments in Texas used to be around $10,000 per year for each turbine.

Q2. From an elegantly dressed woman: how do energy companies know where to install a wind farm? Answer: they find out from meteorological data where average wind speeds are above a critical level.

Q3. From a silver-haired man: if we get rid of all our coal, oil and gas, how do we generate the level of heat required for blast furnaces making steel?  He said you can’t get it from wind or solar electricity unless you pay a premium. Answer: you make and use liquid hydrogen as it burns very hot. Two companies in New Mexico make and sell hydrogen as fuel. Japan buys hydrogen from Saudi Arabia.

Q4. How long do batteries last in electric cars? Answer: 10-20 years before they need to be replaced.

Q5. When all these electric cars and trucks are on the road, what happens to old or dead batteries? Answer: Tesla says its lithium-ion batteries can be recycled 100%.

Q6. One man said he was “neutral” about climate change. He was going to wait and see if extreme weather events, such as wildfires, super-rainstorms, and hurricanes worsened in the coming years.

Q7. A woman asked about how urgent is it to reduce GHG? If global droughts, wildfires, super-storms and hurricanes haven’t shown any worsening with time over the past 40-50 years, why would they worsen with time over the next 40-50 years? Answer: This is a good question. The urgency doesn’t come from the past 40-50 years’ history of extreme weather events (Figure 2). The urgency must come from the need to get control of GHG quickly – climate scientists use their models to predict that the world has to flatten the GHG curve and start reducing GHG emissions by 2030 to escape the twilight zone calamities predicted for the earth by the year 2100. We’ll just have to wait until 2030 (or maybe 2050) to see if hurricanes get worse … or droughts, or wildfires, or super-storms.

Figure 2. Top trace is for all hurricanes 1980 – 2022. Bottom trace is for major hurricanes. Source: Ryan Maue.