Role Of Oil And Gas Industry In Transition To Renewable Energies – An International View

Originally published on Forbes.com on April 26, 2021

Iman Hill is the executive director of IOGP (International Association of Oil and Gas Producers). On Tuesday, 20 April 2021, she gave a webinar on SPE Live called “Extraordinary Times for the Oil and Gas Industry – IOGP Fireside Chat.”

IOGP has offices in London, Brussels and Houston. They are concerned about the contribution of oil and gas to everyday life, as well as the critical role the industry plays in a low-carbon future. About 40 documents are published each year by 2000 of their experts around the world.

Priorities.

Iman opened by saying that in her view climate change is a top priority for the oil and gas Industry as well as society in general. She cited two facts that are important:

• The transition from fossil energies to renewables will take decades, and will require partnership with the oil and gas industry who have been the source of reliable and affordable energy for many years.
• The transition will take different paths in different countries because each country has different resources, technologies and culture.

The oil and gas industry has made significant contributions in several areas: supporting power plants changing from coal to natural gas; reducing greenhouse gas (GHG) emissions; investing in renewables and biofuels; carbon capture and storage (CCS); and green hydrogen made by electrolyzing water.

Take CCS for example: this will be a key for heavy industries that IEA suggest are responsible for 20% of global GHG emissions. When retrofitted to existing power plants, CCS may save 600 billion tonnes of GHG global emissions. Third, CCS can support blue hydrogen made by electrolyzing methane that also produces carbon dioxide, CO2.

Growing scale of industry participation in the transition.

Iman summarized several examples of this:

• Since 1970, ExxonMobil has stored 20 million tonnes of CO2 – equivalent to 25 million cars exhausts in one year. The company is storing 9 million tonnes each year.
• BP studies are aimed at building the largest blue hydrogen plant at Teesside in the UK. By 2030 this will provide 20% of UK’s production that will be used in transportation.
• By 2021, Shell in Germany will provide 10 MW of green hydrogen. In Ireland, they will be a 51% stakeholder in a 300 MW wind-farm.
• Total, since 2016 have invested $8 billion in renewables, and aim to become a world leader in renewables by 2030.

IOGP’s role in the transition.

IOGP have provided to customers a low-carbon agenda, with deliverables, for (1) electrification of vehicles, (2) CCS, (3) energy efficiency, in buildings for example, (4) methane guiding principles to reduce flaring and methane leaks.

IOGP have endorsed EU’s Green Deal that has committed to net-zero emissions by 2050. This will include reducing the carbon-footprint of all operations, plus long-term solutions for the transition. The EU have recently committed to a reduction of 55% of GHG emissions (measured from 2005) by 2035. The UK has announced a 68% cut by 2035. Both have committed to net-zero emissions by 2050.

IOGP support the World Bank’s goal of zero flaring emissions by 2030, and OGCI’s list of practices for detecting methane emissions.

International Energy Agency (IEA).

On Friday 23 April, President Biden continued his two-day summit on climate.  Faith Birol, head of the IEA, was a speaker in this session. He pointed out the disparity between commitment words and tangible actions.

“I will be blunt: Commitments alone are not enough,” Birol said. “We need real change in the real world right now. The data does not match the rhetoric, and the gap is getting wider and wider.”

Birol claimed that carbon dioxide (CO2) emissions, globally, will rise by 1.5 billion tonnes in 2021. This is over 3% of total GHG emissions (45 billion tonnes per year) and is the second-largest surge in history. Not too surprising because the world is emerging from the pandemic recession.

This projection is based on an increase in electricity from burning coal.  Financial stimulus packages, in his opinion, have not given enough support for renewable energies. To flatten the curve of global GHG emissions will require more dramatic steps, including innovative technologies.