Climate action must enter DNA of oil and gas industry

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Malcolm Brinded CBE FEI, President of the Energy Institute

There’s an elephant in the room of the global energy system and it’s called natural gas. It looks like a golden age for gas in many ways, with unconventional production soaring and global liquefied natural gas (LNG) trade forecast to more than double by 2040. But at the same time the world has committed to keeping global temperature increases within 2°C, requiring net zero emissions in the second half of this century.

Even natural gas’s cleaner-than-coal and friend-to-renewables advantages will not be enough to square this circle. For it to fulfil its potential long-term role in the future low carbon world, more must be done to clean up how it is produced and how it is burned.

At last year’s International Petroleum Week in London, the UNFCCC’s Patricia Espinosa applauded action to tackle greenhouse gas emissions by some in the oil and gas industry, but called for it to enter the DNA of all.

The International Energy Agency has since assessed that much more could technically be done during production and distribution to reduce leakage of methane, a greenhouse gas 28–36 times more potent than CO2 over 100 years, to a large extent at net zero cost. Further, it suggests that one of the reasons why this potential exists is lack of awareness.

So the Energy Institute, which works closely with its members and partners to ensure energy is produced safely and securely, decided to gauge this awareness by surveying the views of professionals working in oil and gas around the world.

Could it possibly be the case that awareness and behavioural – not just technological – issues are holding back progress towards a viable, long term role for natural gas in the future low carbon energy system?

Most respondents are bullish about the role of natural gas through to 2050. They expect it to still play a major role across the heat, industrial and power sectors, but also in transport, where it currently plays only a minor role. Such growth is expected to be partly due to conversion to hydrogen – and inevitably will come at the expense of oil. Much of this use of natural gas is expected to be abated, particularly in the electricity sector. While this is an encouraging assessment, a gap still exists to achieve the ambition set out in the Paris Agreement.

Oil and gas professionals take a largely positive view of the potential to tackle carbon emissions from combustion. Those surveyed believe carbon capture and storage (CCS) has the greatest potential of any technology to reduce emissions in the natural gas lifecycle. Of those working in potentially relevant organisations, just over half report that their organisations are active in advancing the CCS case. It is likely that moving from a few demonstration projects to full-scale implementation will require much more widespread policy support. However, nine out of ten respondents believe that industry has a role to play in developing and implementing CCS, with half of these emphasising the need for government-industry cooperation.

But on methane leakage during production, the Institute’s findings are less encouraging. Too many professionals underestimate the significance of fugitive emissions, and the possibilities for reducing it cost effectively. Two thirds of respondents expressed surprise at the extent of the problem and these possibilities.

This lack of awareness around methane suggests a significant opportunity may be being missed by the industry within its own operations – an opportunity that is likely to be very cost-effective compared with other greenhouse gas reduction measures.

The Energy Institute, as the sector’s independent professional body, is here to help address the realities of the energy system. In most scenarios gas has a significant and positive role to play for decades into the future. Similarly, the evidence around climate change, and the need to avert its worst impacts, are beyond doubt. The solution to this particular elephant will be technological, but must also be behavioural.

The Institute’s findings are a call for action across the industry to make ‘the best’ ‘the normal’. Just as health, safety and environmental protection are now embedded in operating cultures, tackling climate change in all ways needs to become equally – and profoundly – part of business-as-usual. It is central to our future licence to operate; it must enter all our DNA.

You can read the full Future of Gas report here.

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