OTC2023: Saudi Arabia leads the charge towards energy transition with innovative technology
(WO) – The Offshore Technology Conference, taking place in Houston, Texas, sees oil and gas companies answering one very important question: what are they doing to advance the global energy transition? In a session titled “Accelerating the energy transition in Saudi Arabia: Oil and gas sector decarbonization and the path to hydrogen,” industry leaders gathered to discuss emerging technologies and exciting opportunities that will help Saudi Arabia and other countries meet net-zero by 2050.
Moderated by Dr. Heather Evans (U.S. Department of Commerce- International Trade Administration), the group discussed everything from digitalization to investment opportunities available that will reduce emissions not just in Saudi Arabia, but the entire world. The panel included insights from Mohammad Al Shammary, Vice President of Saudi Aramco's Procurement, Supply Chain Management; Matt Foder, Weatherford’s Senior Vice President, Innovation and New Energy; and Matthew Furness, Global Manager of Business Development for Bechtel Energy's Downstream, Chemicals (D&C) business line.
Saudi Arabia is making significant progress in the energy transition, with companies coming together to reduce emissions through digitalization and automation. However, hydrocarbons will still play a vital role in the energy sector.
Carbon capture and hydrogen markets need market demand. Al Shammary made it clear that carbon capture and hydrogen production is on Aramco’s radar. However, he pointed to challenges in the market that make advancing these new forms of energy difficult.
The company has found success in Japan and the Far East for hydrogen sources and is working with various research organizations to develop knowledge about this sector. Al Shammary insists that Aramco has the capacity for these emerging opportunities; it just needs demand to meet them in the middle. While he fell short of mentioning specific projects, Al Shammary seems optimistic about the company’s future in carbon capture and hydrogen.
New technology will drive the energy transition forward. While the panelists account for different streams in the energy sector, they all agreed that new technology and digitalization opportunities are the key to a successful energy transition. When asked about what technology each company is prioritizing, Aramco will focus on flaring reduction, optimizing offshore asset maintenance, and using satellite and drones to monitor facilities for real-time emissions reporting.
Al Shammary excited the crowd with words about Aramco’s mobile carbon capture technology. Stationary facilities are expensive and come with a high carbon footprint. Mobilizing these operations creates more flexibility, cost reductions, and lower CO2 emissions related to capture, storage, transport and maintenance.
Weatherford’s Foder had no problem diving into specifics. He pointed to the company’s ForeSight 5.0 platform, which aims to help companies reduce their footprint through predictive maintenance analytics. With this type of innovative software, operators can get ahead of carbon-intensive problems before they start, reducing costs and ultimately lowering CO2 and methane emissions.
As for Bechtel, the company plans to use new technologies to reduce their Scope 1 and 2 emissions, without divulging too much information.
Government incentives, risk assessment, economics factor into energy transition challenges. As with all innovation, the energy transition doesn’t come without its challenges. Aramco’s Al Shammary reiterated the need for demand to accelerate carbon capture and hydrogen production. However, he also pointed to a lack of government incentives driving action. While individual companies and countries are paving their own way, the industry lacks a central incentive to make massive headways.
Weatherford’s Foder thinks that, while technologies like carbon capture and storage aren’t new, some innovation is widely unknown at-scale. Companies are less willing to take risks, keeping them from pursing new things. However, Foder gave a nod to Aramco for leading the charge in carbon sequestration.
Bechtel’s Furness also gave credit where credit is due. While the economics of the energy transition don’t “add up” quite yet, Saudi Arabia has the “firepower” to make the transition work. Other countries will be looking to Aramco’s guidance as they take the leap into new energy sources and decarbonization.
Notes for Washington: Permitting reform, public education, recommitment to fossil fuels. As Dr. Evans heads back to Washington, she implored the panel for any notes she should bring back with her. Foder was quick to criticize the broken permitting system that makes development in conventional and new resources difficult. He also pointed to a lack of public knowledge surrounding carbon capture. Prioritizing education and collaboration will be key to driving the energy transition forward.
Al Shammary had similar sentiments. All efforts to reduce CO2 emissions must be accompanied by government incentives. As repeated several times throughout the session, fossil fuels are here to stay. Al Shammary thinks that finding ways to make oil and gas production cleaner and safer will be the answer.
How U.S. companies can get involved in Saudi Arabia. According to Al Shammary, oil and gas production is expanding in the kingdom, creating more opportunities for investment and activity. Local Aramco offices are always willing to connect interested parties to the proper channel to create action plans. Saudi Arabia’s industrial cities are ready; companies just need to take the chance.
The session closed with words from the U.S. Consulate in Dhahran’s David Edington. According to him, investment opportunities in Saudi Arabia have never been higher. Companies looking to partner with Aramco must focus on building up domestic talent, rather than bringing in expats. The energy transition is a long-term effort, and cooperation between governments and the private sector is critical.
While the session indicated a focus on Saudi Arabia, the panel agreed that new ideas and technology are applicable in every corner of the world. While Saudi Arabia is leading the charge towards the energy transition, other countries can learn from their efforts to make meaningful change towards net zero.