WGC: Oil Majors Undergo Energy Transition
Several big hitters in the upstream sector showed their determination to clean up their act and make gas a long-term solution to the world’s rising energy needs, at a panel session at the World Gas Conference (WGC) in Washington, DC June 26.
The CEOs of BP, Total, ConocoPhillips and a senior Equinor executive were among those quizzed about the sincerity of their declarations about cutting greenhouse gas emissions by Maria van der Hoeven of the Dutch think-tank Clingendael, who was executive director of the International Energy Agency for four years from September 2011 and prior to that Dutch economy minister from 2007 until 2010.
Equinor’s marketing and trading chief Tor Martin Anfinnsen pointed out that the world was going to need a lot more energy and gas and renewables were the best way to serve the needs of a growing population that would live longer and have higher expectations. But he questioned the future of gas in the second half of this century as technology improved and alternatives to methane were developed. The company is putting money into carbon capture and storage (CCS) in the Netherlands and offshore Norway.
Van der Hoeven also quizzed ConocoPhilips CEO Ryan Vance about his company’s decision not to join some other majors and sign up to last November's guiding principles on methane. Vance said his company had been spending time and money cutting emissions for a decade. “It is an integral part of the company,” he said. “We are the only exploration and production company with a greenhouse gas emissions reduction target. There was no need to join the forum.”
But fellow panellists were unconvinced by his claim that actions speak louder than words. BP CEO Bob Dudley, while acknowledging the integrity of ConocoPhillips' assault on its own emissions, said that individual responses to the problem would lessen the overall effect: “The whole industry has to have a better reputation or we all suffer. One company does not matter. It is easier to engage collectively.”
Dudley had little patience for rhetoric about gas as a transition fuel, arguing it is instead a key destination fuel as the world abandons coal but needs firm energy supply. Gas will be more and more important: it is affordable, abundant and cleaner than coal. He said the US was a good example of a country where gas has competed successfully with coal on economics, whereas in China gas had displaced coal owing to policies despite abundant coal. “We must make the case for gas in a way that removes any doubt about its long-term benefits,” he said. That would also mean solving infrastructure bottlenecks and establishing well-functioning markets.
However the panel agreed that there were problems, such as methane leakage and the need to decarbonise, such as by carbon capture, use or storage.
Total CEO Patrick Pouyanne said that gas still faced a societal challenge: gas remains a fossil fuel, so the industry has to push back against being tarred with the same brush as coal. To eliminate all fossil fuels would be a huge mistake for the economic and social development of the world, he said.