Houston — The oil and gas industry is often thought of as a sector doomed to obsolescence as the world gradually shifts to greener energy sources, but the industry and particularly tech-savvy exploration and production companies -- partnered with technology companies -- are likely to play a key role in the transition, a conference panel said Sept. 23.
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Oil and gas may be able to compete in a low-carbon world, given the potential of technology to "dramatically" decarbonize those products, Matt Most, vice president of government relations for upstream oil and gas producer, Ovintiv, said at the National Clean Energy Week online conference sponsored by the Policy Makers Symposium.
"Climate change in our mind is inherently a technology challenge," Most said. "Modern life is the direct benefit and result of energy technologies and greenhouse gas emissions are the unfortunate side effect of those technologies."
"To address climate change, in our opinion, we have to accelerate the development and adoption of what will become the lowest-cost emissions reduction technologies," he said.
Most noted that in the oil and gas sector, over 90% of the emissions associated with those commodities come from the processes or way in which customers consume them. So it is "absolutely critical" that oil and gas producers work in partnership with technology providers that can minimize emissions -- not only in oil and gas production, but also in consumption, he added.
In the last couple of years, E&P companies have become more conscious of a growing public desire to see the sector lower carbon footprints and formulate emissions reductions goals. Cutting-edge technology in the industry has continually resulted in improving technologies and lower-cost energy production, and in many cases, fewer emissions.
Technology can accelerate climate change solutions
As a result, oil and gas production can be part of the solution to address climate change as increasingly more sophisticated technology is applied to the entire value chain, Seth Levey, director of political and public affairs for Norwegian producer Equinor said.
Investing early in low-carbon technologies is also valuable for reasons beyond climate change, he said. For example, Equinor recently formed a strategic partnership with BP in offshore wind in the US, targeting an initial 4.4 GW of gross generating capacity.
Such ventures and other new clean-energy technologies are also "incredibly important" to encouraging recruiting young people and STEM, or science, technology, engineering and mathematics, education, Levey said.
Even though Equinor is a large oil producer, "we have always believed in the value of natural gas as a fuel in its own right and as a critical ingredient in hydrogen technology," he said. "We are working with other companies and figuring out the best ways to move the needle on methane emissions."
In its offshore operations in Norway and other basins, Equinor uses methane-sniffing drones, for example, to allow for identification of methane -- a technology which "moves the needle" on slashing methane emissions, he added.
The public wants clean energy with lower emissions that is affordable and reliable, and natural gas has an important role to play as it replaces coal in many parts of the world, Robert Stout, vice president and head of US policy for BP America, said.
Gas may aid in the transition to the growing use of hydrogen, Stout said. For example, zero-carbon "green" hydrogen, made through electrolysis with water, using offshore wind as a power source, may one day produce heating for homes.
Gas can assist in shorter-term 'blue hydrogen'
"But in the earlier days, scaling up what's known as blue hydrogen, using natural gas, will help enable that development over time so you're not diverting too much of your renewable power to that when you need renewable power ... to decarbonize in the power sector," Stout added.
While Equinor and Ovintiv have increased their low-carbon footprint, BP is viewed as a net-zero heavy-hitter. It is raising its renewables profile, weighing in with net zero emissions by 2050, raising its annual spending on low-carbon technologies tenfold in the next 10 years, will not conduct new upstream exploration in areas outside current operations and plans to shrink its oil and gas production by 40%, or 1 million boe/d, by 2030.
In addition, BP plans to increase its renewables in traded electricity from to 2.5 GW to 50 GW by 2030, to be involved in electric vehicle, or EV, charging technologies, and plans to increase its EV charge points from 7,500 to 70,000 by 2030.
"It's less about simply producing resources and more about offering integrated energy solutions to consumers," Stout said.
The infrastructure that will accompany the transition to clean energy over the next few decades will be immense, the panel agreed. It will need policies from the federal and state governments on multiple fronts to enable the permitting for this infrastructure.
"We encourage policymakers and entrepreneurs alike to focus on a broad set of technologies, regardless of the fuel, to find the next great thing," Ovintiv's Most said. "And it's very possible the next great thing will be the last great thing."