Unlocking a low-carbon future

World Oil (WO): Where are we now with energy transition? Who is making big moves in the field?

Sian Lloyd-Rees

Sian Lloyd-Rees (SLR): Cutting the industry’s carbon emissions will require significant investment and coordinated effort among businesses, governments and stakeholders. Although we are making great progress to reduce our CO₂ emissions, there is still a long way to go. Fossil fuels will remain an important component of the world’s energy system for decades to come, and energy companies need to produce traditional energy in the most carbon-efficient manner possible.

A recent industry report, commissioned by DNV GL, revealed that 51% of oil and gas companies were actively adapting to a less carbon-intensive energy mix in 2019, up from 44% the previous year. This signals that things are moving in the right direction.

Some major operators have really stepped up to the challenge and are actively leading in this space. Shell and Total have set long-term ambitions which would result in a large reduction in their carbon intensity, in line with the Paris targets to keep temperature rises below 2°C. BP, ConocoPhillips and Eni also have set targets to cut emissions from their own operations over the next decade, and Equinor is leading the way in the development of offshore floating wind.

WO: In what ways, do you believe that operators and the supply chain should be adapting to become less carbon-intensive?

SLR: Many of us are learning how to adapt, reducing our carbon footprint through technological developments, better processes, carbon capture and consumption strategies. The energy transition will rely heavily on R&D and innovation to succeed. Aker Solutions, for example, has been developing floating wind solutions to replace traditional power generation on offshore installations.

WO: To what extent is there is a competitive element to becoming a “low-carbon” business?

SLR: Within the energy industry, we already have the infrastructure, track record and talent to develop successful low-carbon businesses. Arguably, the companies who make the leap first will learn quickly to overcome the challenges and reap the rewards.

Competition in this prospering arena will attract investment and accelerate innovation. By broadening and diversifying our capabilities, and galvanizing our green credentials, we are better-positioned to offer more for our customers, employees and suppliers. We can become a more dynamic and disruptive sector, which can recruit and retain the best talent and skills.

WO: The Paris climate goals have set stringent targets to reduce carbon emissions. Realistically, are these achievable, and what needs to be done?

SLR: To achieve stringent climate change goals, we are going to have to think, and act, differently. It’s not enough to make small adjustments—meeting the targets of the Paris agreement will be a huge endeavour and will require the industry to work in new ways, develop new technology and foster a new mindset.

We’re not starting from scratch in this regard. As an industry, we’ve made steps forward with collaborative working, cross-industry learning, standardization and operational optimization. We need to strengthen our focus, and get the industry’s support, to mature existing and develop new technologies.

WO: What will happen if this is not realized? What impact will this have on the future of the oil and gas sector, particularly as demand for fossil fuels is set to decrease anyway?

SLR: The demand for energy is only set to increase, regardless of what the source might be. In the lead-up to mid-century, industry analysts predict the world will operate a broader energy mix, but it will still require a significant amount of oil and gas production. We have a responsibility to the communities we operate in to take a sustainable approach to this demand. Oil and gas can become the platform from which to enable the energy transformation, and the switch to a lower-carbon future. The prize is definitely there—and we have the means to reach it.