Why reducing greenhouse gases is like a football game for oil and gas producers and their countries.
Fossil fuels provide about 83% of the world’s energy and are responsible for 73% of greenhouse gas (GHG) emissions. The GHG emissions are mainly carbon dioxide, CO2, and secondly, methane, CH4.
The concentration of CO2 in the atmosphere has increased exponentially since the start of the industrial revolution around 1850. It is now at its highest level in about 3 million years.
Ice core data shows that CO2 and global temperature have been in sync for almost a million years. The global temperature is increasing exponentially. If the GHG emissions are not controlled, by the year 2100, the Earth will be hotter than it has been in the past million years. If nothing is done, our earth will enter a twilight zone.
Future of coal.
Coal is the dirtiest of fossil fuels in terms of lower atmosphere pollution and upper atmosphere GHG emissions.
At the recent COP26 climate conference, 40 out of 200 countries pledged to gradually reduce (not phase out) the use of coal. Countries that did not sign the pledge included the United States (the fourth largest exporter of coal), Australia (the largest exporter of coal) and China (the largest user of coal).
The transition to coal-fired power plants is accelerating. In recent years, big business names have joined the list of those pledging to achieve net carbon dioxide emissions by 2050: Excel Energy, Duke Energy, Dominion Energy, Ameren, Entergy and Vistra Energy. Vistra, the world’s largest independent non-utility, has announced it will shut down its seven coal-fired power plants in the Midwestern states by 2027.
But this is not a quick or complete switch to renewables. Duke Energy’s goal by 2030 is to reduce its emissions by 50% from 2005 levels, which may not be enough to reach net zero by 2050. Ameren will slowly shut down coal-fired plants – over twenty years.
The future of oil and gas.
The oil and gas industry is responsible for 57% of the world’s energy and 50% of GHG emissions. There was no phase out of oil and gas at COP26.
There are six strategies for reducing GHGs from oil and gas (much of it applies to coal as well):
Strategy 6: Producers are reducing the footprint of their own operations (for example, using clean electricity instead of dirty diesel to pump frackings).
Strategy 5: Stop gas flaring at wellheads and seal methane leaks in wellheads, reservoirs, pipelines and other facilities.
Strategy 4: Capture GHGs after the combustion of fossil fuels. Despite the success in Iceland, carbon capture and storage (CCS) has limitations of scale that make it an impractical technology to save all of the world’s oil and gas production.
Strategy 3: Divert attention from oil and gas by researching and developing new technologies to reduce GHGs globally. Some applications are: cement and zero carbon steel; carbon-free fertilizers and plastics; next-generation nuclear fission and fusion; underground electricity transmission; geothermal energy. The richer countries can do more here, because this type of R&D is expensive.
Strategy 2: Stop burning oil and gas in:
· Power stations. The tiny state of South Australia has achieved 100% renewable electricity through onshore wind farms and is heading towards 100% permanently in the coming years. The country as a whole expects almost 80% renewable energy by 2030, with most coal plants closed. This is attributed to rapidly falling costs of renewable energy technology, as well as industry demand for cheaper and greener energy.
· Cars and trucks. 60% of new car sales are electric vehicles in Norway. In the USA, Elon musk He always believed that lithium-ion batteries could be advanced, and he overcame great difficulties to get Tesla to run, which forced other auto heirlooms such as Nissan and Volkswagen to join the game.
This strategy is achievable according to Rystad. As happened in Norway, new federal policies will push the United States in this direction, and recent commitments by automakers point to a rapidly changing future.
Strategy 1: Stop part of the production of oil and gas and reinvest in renewable energies. Bp is a prime example, but overall the oil companies have put in over $ 10 billion in renewable energies projects in each of the past three years.
It makes sense: new wind, solar and battery storage systems are now cheaper than new conventional power plants. Large, called large batteries, are being built across Australia and can bridge a power outage for up to 4 hours, and longer if home storage batteries can be plugged into the grid when the weather is not good. not cooperate. Finally, Form Energy has a secret battery that they say only works with iron pellets and promises very cheap electrical storage.
Why is it like football.
The global oil and gas industry is a lot like the National Football League (NFL) in the United States. The six strategies above are different “games” that can move the football on the pitch towards the goal line and score. The global target is zero net GHG emissions by 2050.
The football team is made up of several different players. The global team is made up of the oil and gas industries from many countries. Any team play will involve many players. Any strategy will involve industries in many countries around the world.
For the football team, a variety of games (hopefully all six games) will give the best chance to score. For the world, using all strategies will improve the odds of reaching the goal.
What is obvious in a football team: the players have to coordinate and help each other, this is called teamwork. For the world to reach the goal line, the oil and gas industries and their countries must plan together and collaborate, share motivation, information and research in a transparent manner.
Finally, strengths must be shared and weaknesses reinforced. For example, the American industry is strong on strategies 6., 5. and 4.
Industries in Norway, Denmark and Australia are suitable for 2.
The industries of UK (bp), Norway (Equinor), Denmark and Australia focus on 1.
It’s 2021 and the world transition team are on the 25-yard line, with a long way to go to score. It will be fascinating to see what progress is made and how the game changes in 2022.