Energy Transition Webinar Series 2020_Points of View Document

28 May - 3 September 2020

Points Of View Document

Energy Transition Webinar Series

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Contents

This Points of View (POV) document has been created to provide an informative round up of the recent Energy Transition Webinar Series run by the PESGB. The publication has also been designed as a platform for participants to share their thoughts and reflections on the topics covered within the series, supporting further discussions around energy transition and it’s future impact on the oil and gas industry.

We hope you enjoy reading the POV document and hearing viewpoints from fellow professionals in the industry.

Introduction to the Energy Transition Webinar Series

Page 3

Meet the Organising Committee and Moderators

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Session 1 | What Do Oil Companies Low Carbon Commitments Mean?

Page 6

Session 2 | CCUS Decarbonisation Schemes

Page 8

Session 3 | Offshore Wind

Page 12

Session 4 | The Hydrogen Economy

Page 14

Session 5 | The Energy Transition and the North Sea

Page 16

Session 6 | The Battery Supply Chain

Page 18

Session 7 | Geothermal Energy

Page 20

Session 8 | Energy Transition Final Thoughts

Page 22

Conclusion and Final Thoughts from the Committee

Page 28

What’s Next for Energy Transition?

Page 29

Please note that the opinions shared in the documents are not the views of the PESGB, but of the named participants, for which their contributions were gratefully received.

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Introduction to the Energy Transition Webinar Series The Energy Transition Webinar Series stemmed from a thought provoking question about the role of the petroleum industry future Energy exploration activities. Below, organising committee member Lucy Williams shares her thoughts on how initial plans grew into the successful webinar series we all enjoyed, and what the committee originally hoped for the series.

seeking to broaden its remit to include non-petroleum, energyrelated subsurface themes, the timing was most apt and I was delighted to join with Hamish, and Neil Frewin (another PESGB past President) in this endeavour.

From the outset Hamish was very clear this was not to be another oil and gas industry conference talking about what our industry think the Energy Transition is, and should be. Rather it must be delivered in partnership with the renewables industry, with who we had to demonstrate our commitment to the ET, and work alongside to provide the necessary solutions. The Renewable Energy Association (REA), a body representing renewable energy and clean technology in the UK, were keen to work with us to deliver a two-day conference, which we titled “Accelerating the Pace”.

The conference was aimed at bringing together Renewable energy and oil Industry leaders and influencers, Policy makers and the Cabinet, the REA and oil industry communities to reach a consensus on the optimal route to achieve Net Zero Greenhouse Gas emissions by 2050. The conference was to have been in September this year.

And then of course the world was turned on its head by the COVID-19 pandemic and we had to rapidly re-think our plans. While the desire to put

on a face-to-face conference has not gone away, back in March we felt it was imperative to maintain momentum. It was quickly apparent COVID-19 had the potential to accelerate the ET, and we needed to keep up.

As we all grew accustomed to working from home and ‘meeting’ via Zoom or Teams, the concept for a webinar series to bring the oil industry community up to speed on aspects of the energy transition evolved and The Energy Transition Virtual Programme was launched on 28th May. The hopes and aims for the programme were to cover the spectrum of industries operating in the UK to deliver clean energy (zero net carbon) , specifically with a subsurface theme to delivery. In doing so we were keen to explore if opportunities might exist for a skilled oil and gas subsurface workforce that is today facing challenging times.

For me the programme we delivered last summer was just the beginning and the launch pad for the PESGB Exploring the Energy Transition Special Interest Group which already has a great deal of interest and support from members. I look forward to seeing this group grow and provide a platform for discussion, debate and education around the Energy Transition.

Lucy Williams

“

“

The seeds of an idea for an Energy Transition (ET) conference came from Hamish [Wilson] back in May 2019. Hamish had been thinking about energy transition questions for a while; the role of the petroleum industry, the nature of public debate, demand vs. supply considerations, and at the same time posting some thoughtful commentary on LinkedIn. As a past-President of PESGB, he approached that organisation, and reached out to the Geological Society to gauge interest in putting on a conference. As Chair of the then Petroleum Group of the Geological Society, and working with that committee on repositioning to the Energy Group

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Meet the Organising Committee and Moderators Organising Committee

Neil Frewin Regional Geoscience Lead Shell International

Lucy Williams Geoscience Manager Rockhopper Exploration

Hamish Wilson Founder / Lead & Renewables Expert BluEnergy

Moderators

James Faroppa Consultant

David Offer Principal Geoscientist RPS Energy

Dave Quirk Geoscientist MGS Energy & Manx Geological Survey

Jenni Scott Strategy & Portfolio Advisor Shell

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Acknowledgements

The 2020 Energy Transition Webinar Series would not have been possible without the support, creativity and enthusiasm of the Organising Committee, who spent countless hours reviewing and fine tuning each session to make it relevant and engaging for everyone involved. Thank you!

A few words from Maria Iredale PESGB Executive Director A sincere thank you to the outstanding organising committee, their passion for this subject, really drove the series. Thank you too to all the presenters and moderators, you give us lots of viewpoints to consider along with the science. Finally a big thank you to all the participants who joined in with both the webinars and the Small Talks. Your contribution to the discussion was invaluable and we look forward to seeing you again in the next series.

“

“

CO2 2050

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SESSION 1 | 28 MAY 2020

What Do Oil Companies Low Carbon Commitments Mean?

Moderated by Neil Frewin

Meet the Speakers

Keith Myers

Robin Allan

Gardiner Hill

President Research Westwood Global Energy Group

Director North Sea & Exploration Premier Oil

Vice President Carbon Management BP Plc

• Keith joined BP in 1987, having graduated with a geology PhD at Imperial College.

• With a background as a geologist, Robin has 30 years’ experience in senior positions at Premier and has a particularly thorough understanding of the Company’s operations having worked in South East Asia and the UK.

• Gardiner graduated from Edinburgh’s Heriot Watt University with BSc and MSc degrees in civil and petroleum engineering.

• He led strategy for BP’s business in West Africa in the Strategic Alliance with Statoil. Keith left BP in 2000, becoming an advisor to numerous energy companies on strategy and partnership issues.

• He went on to found Richmond Energy Partners (REP) in 2006 to provide independent advice to investors in smaller oil and gas companies.

• He now plays a leading role within the UK oil industry, representing North Sea operators through his additional roles as Chairman of BRINDEX and as a Board member of Oil & Gas UK.

• REP became part of Westwood Global Energy Group in 2015.

Q&A

• He joined the British National Oil Company which became Britoil, which was later taken over by BP in 1989.

• In 2000, he joined BP’s central Group Technology function and project managed the CO2 Capture Project - the first international joint industry scheme of its kind.

• Gardiner is also on the board of a range of associations and special projects including; Chairman for the Carbon Capture and Storage Industry Association, Chairman for the CO2 Carbon Capture Project.

Where does the responsibility reside for setting standards across industry on carbon reporting?

“There is no single point of responsibility at present; it is expected that there will be some form of coalescence probably via the TCFD [Task Force on Climate-related Financial Disclosures].”

Robin Allan

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Summary The very first session of the Energy Transition Webinar series sought to better understand E&P company ‘low carbon commitments’ and explore what companies are doing to meet these targets. Much of the conversation is around scopes 1, 2 and 3 emissions, and standardising carbon reporting.

Participant Reflection

In an ideal world the oil companies would...

“Balance their approach and recognise that energy transition is both inevitable and complex; success will require time and simultaneous diverse approaches.

The oil companies should therefore be positioning themselves to be acting constructively and become much more attuned to broader stakeholder sentiment.

There will not be a single ‘one size fits all’ solution – in OECD countries the focus with governments, regulators, the media and the public is on the quickest shift to green energy, whereas for much of the rest of the world energy security and the eradication of energy poverty will be paramount.

International oil companies need to be responsive to both.

The skill sets encompassed by the industry are certainly transferrable, so oil companies have the opportunity to leverage this, but there is a significant risk of charging ahead and telling others what is needed rather than engaging and co-operating. Oil companies don’t generally have a history of collaboration with other industries, but what was apparent in the PESGB Energy

Transition programme is that the non-oil/green energy pioneers are forging ahead without the oil companies’ expertise or views on how things should be done – they haven’t been convinced of the need to draw significantly upon the abundant geoscience, engineering, project management and economics talents which reside in the oil companies. This seems to be both a waste and an impediment to faster progress in effecting the transition.

It is clear that oil and gas will be part of the energy picture for decades to come in the absence of an effective single energy substitute, so there needs to be a ‘road map’ which meets, for example, the ICC targets in the UK. The oil companies must be an integral part of preparing this, and there needs to be transparency on both timing and cost – an area where in my view the non-oil/ green energy pioneers have been reticent to publicly acknowledge the need, scale and realistic break-even dates for realising economic solutions against the alternatives. Presented jointly, through the ‘road map’, this could be achieved, but the oil companies

will need to show a common approach with green energy and must be clear that the economics will reflect the price of low carbon.

Similarly, when operating in areas where energy security and eradication of energy poverty are the critical issues, these must be the priority, but oil companies are in a great position to bring in green and economic alternatives to begin the transition (solar, geothermal, CCS, wind power may have applicability in different locations in reducing operating costs and reducing the carbon footprint of the industry) – many will be doing this already in some form – but it needs to accelerate.

Technology transfer will be critical here, as well as influencing foreign governments and regulators. The more co-operation between the oil and non-oil/green energy the easier this will be.

In summary, in an ideal world, oil companies would listen more than dictate, work co-operatively and be ambassadors for speeding up the energy transition. They have the tools.”

Contribution by John Francis Bell

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SESSION 2 | 11 JUNE 2020

CCUS Decarbonisation Schemes Moderated by Lucy Williams

Meet the Speakers

Andy Lane Managing Director Net Zero Teeside BP Exploration

Alan James Team Maker & Managing Director Pale Blue Dot

David Parkin Director Progressive Energy Ltd

• Andy joined BP in 1986 and worked in a variety of technical and commercial roles in Exploration and Production, Gas and Power and Trading.

• Alan joined Britoil in 1981, after graduating from Imperial College with a BSc in geology.

• David is a mechanical engineer with a degree from the University of Cambridge.

• He has 16 years experience in the oil & gas sector working on field development and production, and seeking to improve the economics of marginal fields with Helix ERT.

• His career took off with BAE Systems; initiated into their Sigma ‘Fast Track’ Graduate Engineering Programme.

• Returning to the UK after time in Alaska and Australia, Andy was responsible for the development of BP’s LNG business in EMEA, downstream Gas Business in Europe and business development across Russia the Caspian, Europe and Africa.

• Andy joined the Net Zero Teeside project in 2020, a CCUS development between Eni, Equinor, Shell and Total with BP as operator.

• In 2007, Alan joined CO2DeepStore focused on commercialisation of geological storage of CO2 deep within the Earth.

• He has been the MD of Pale Blue Dot since 2013, the company leading the Acorn project in central Scotland.

• He has worked for Airbus, Atkins, National Grid & Cadent Gas Ltd. His work in renewables started in 2008 leading Offshore Renewables for Atkins, working on both UK and international projects.

• For the last 2 years he has been Director at Progressive Energy working on CCS and hydrogen development projects including HyNet.

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Summary Session 2 of the webinar series looked at CCUS in the UK, concentrating on 3 different schemes currently running - Net-zero Teeside, the Acorn Project and the Hynet Project.

Participant Reflection “Recent announcements have all been about cost and job cutting rather than investment in CCUS. Government rhetoric is supportive, but when and if policies are implemented, will it be in time to save geoscience jobs and expertise?”

“CCUS is not new but has the potential to rapidly expand in the coming years if a carbon pricing strategy can be agreed. CCUS could provide opportunities to meet climate mitigation targets and for petroleum based geologists and engineers to secure future work.”

Contribution by Matthew Booth, Senior Geologist

Contribution by Paul Britton, Director, StrataData Ltd.

“Carbon

Capture and the Great Stink.

The Industrial Revolution brought unprecedented wealth to Britain, but with it came mass movement of people to urban centers and extensive social and health problems. The first half of the 19th century saw human excreta and slaughterhouse waste pour into London’s River Thames, which became an open sewer. At the same time, tens of thousands of Londoners were losing their lives to cholera, and infant mortality reached 50%. This was the health emergency of its day.

Scientists, such as Michael Faraday and Jon Snow made the link between the polluted Thames and the cholera outbreaks. But for a change to be made, it took an event that brought the issue to the very heart (and noses) of Government. In 1858, unusually hot weather and low water levels exposed the sewageridden riverbanks and created the Great Stink. With Parliament overlooking the Thames, the issue could no longer be ignored by the country’s leaders and

they called in the engineers!

With £4.2 million of government funding (approximately £500 million today), Joseph Bazalgette designed and led the construction of London’s sewers, which on completion effectively eliminated cholera.

The Great Stink showed how science and human endeavour can prevail over a deadly disease, but also provides parallels for the Energy Transition and how we view carbon capture and storage (CCS). Captains of Industry did not intend the Industrial Revolution to spread cholera, just as our present economy - the oil sector specifically - did not set out to put CO2 into the atmosphere.

Like the sewers in 19th century London, CCS is dealing with a waste product of a thriving economy, and we as taxpayers or consumers ultimately need to pay for this service. If CO2 came in black bin bags that gathered in smelly heaps on our pavements when not collected, we would be clamouring for our local councils to instigate a collection service and would argue this was for the health and wellbeing of the

population. We are willing to pay for waste collection through our Council Tax; the same mindset is needed for collecting and disposing of CO2.

Just as in Bazalgette’s time, today’s scientists and engineers have the understanding and technology to implement solutions to meet Net Zero targets, including through CCS. However, for CCS there appears an urgent need to define the business model, and to put in place appropriate legislation and contracts to support this.

Commitments to Net Zero and Road Maps are good, but it seems like an “in your face” event equivalent to the Great Stink, but on a global scale, may be needed to get governments to activate the funding and legislation required to implement CCS at scale. Have we already seen such an event with Covid-19 or, as noted by Ray Leonard in his presentation, is there a worse event to come in a few years’ when the next solar maximum could align with a strong El Nino to give global temperatures unprecedented in modern times?”

Contribution by Barny Brennan, Consultant

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Participant Reflection Is CCUS a short term fix for a long term problem?

“Both the UNFCCC and IEA GHG emission mitigation scenarios include significant contributions

by CCS through to 2050. (IEA has CCS mitigating 14% of emissions in 2050) The EU, however, (2009 CCS Directive) see it as a transition technology. The use of CCS as a bridge could be envisaged in the nascent hydrogen industry where CCS is being deployed in association blue hydrogen using natural gas which may transition to green hydrogen in the future (if the economics ever work).

hard-to-reach industries which are big point source emitters (steel, cement, fertiliser etc) B) The deployment of viable energy storage solutions that will enable increased penetration of renewables. Despite wishful thinking, 100% renewable deployment may simply not be possible due to grid intermittency issues and the price cannibalisation effect at high renewable penetration, and C) it is very likely that we are going to over-shoot the Paris 2DS goal.

Whether CCS is a short term or long term fix will depend on a number of factors; A) the ease of decarbonising those difficult,

CCS is the only technology that is potentially capable of producing remedial action through negative emissions. This would be through

BECCS or even Direct Air Capture.

Whether it be short term or long term deployment, widespread take-up of CCS will depend of technological advances, cost reduction, better policy support from host governments and ultimately a much higher carbon price. Specifically, in the case of CCUS where it is used in EOR in the United States, the recent amendments to the tax credit system my result in a short term boost of activity.”

Contribution By Duncan Rushworth Vice President, Kallis Energy Services Limited

Do you feel CCUS provides future employment for those currently working in the oil industries?

“Work ranges from screening for suitable locations/stratigraphy, modelling injected CO2 flow in the subsurface, better understanding overburden so that locations with zero risk of leakage are determined, and monitoring of the repository. Steering injector wells may be a possibility. I would expect research into reservoir and fluid modelling to receive a boost - the digital models of the subsurface need to be superior to those created today. How much employment this will generate remains to be seen, but I am confident the industry experience we have today can be translated into that supporting the new global CCUS industry.”

Contribution by Mike Simmons Haliburton Technology Fellow for Geosciences

Q&A

Could you expand on what you think the main geomechanical challenges are?

“Drilling and completing in underbalanced depleted reservoirs, Operating the reservoir to ensure the mechanical integrity of reservoir and caprock system. Operating the reservoir whilst ensuring existing faults are not reactivated. ” Alan James

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CCUS Decarbonisation Schemes Moderated by Lucy Williams

Is CCUS viable? A small talk debate.

Jenni Scott

Hamish Wilson

Arguments FOR

Arguments AGAINST

3 key points in Jennu’s arguement: • Technically viable • Has the potential to be commercially viable • Vital for the UK to meet our net-zero targets

Hamish agreed that CCUS is necessary in the short term but argued that we must recognise that it’s a waste and therefore a cost on our industry.

Hamish suggested that the oil and gas sector will eventually become obsolete, and so there would be no need to have CCUS to get emissions from a sector that is going to be replaced. Although Jenni didn’t disagree, she identified that CCUS is not just for emissions from our current field mix and that there are other sectors where CCUS could be utilised.

He suggested that we are trying to build an infrastructure to effectively bin waste rather than address and push the concept of reuse, replace and recycle of carbon, which he didn’t feel comfortable was the right thing to do.

“No matter if you completely stop producing hydrocarbons, there is still an excess of CO2 in the atmosphere which we need to remove in order to get back to the pre-industrial levels. CCUS has the scale and is a proven technology... making it viable.”

“We are in the energy transition to a new world where we are going to be leading with no fossil fuels, surely we should be focussing on that and clearly dealing with the waste as it happens...but lets focus on that new world of cheaper, cleaner, energy.”

63% YES

43%

NO

37% Results after debate

NO

Results before debate

YES

57%

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SESSION 3 | 25 JUNE 2020

Offshore Wind Moderated by Hamish Wilson

Meet the Speakers

Robert Sauven General Manager GE Renewables

Alistair Muir Wood Director Wood Thilsted Partners

Arne Eik Lead Business Developer Equinor

• Rob has worked all his career in Wind Energy.

• Alistair joint founded Wood Thilsted based in London nearly 5 years ago and the company has grown to over 80 staff.

• Arne is business development for floating offshore wind and the Tampen Project.

• He is now the General Manager for GE Renewables.

• Prior to this he was Group Business Development Director at RES UK working on Grid scale systems and the journey for grid parity for renewable energy systems.

• He spent four years with DONG in their offshore division.

• He’s been working floating offshore wind and the Hywind programme for five years.

• He started his career with Rambol and Atkins.

• He joined Equinor in their climate change group.

• Arne started his career with Point Carbon.

• He was VP Managing Director of Vestas Technology UK and built a turbine manufacturing capability on the Isle of Wight.

Q&A Q&A

What is defined as risk?

“The key here is “can you construct a turbine with the cost profile that is going to be compeitive at the auction”.

Alastair Muir Wood

Around carbon offsetting & decommissioning the structures.

“Typically...it’s about 6-months to pay back...the carbon footprint. “When you take a licence you have to commit to being able to remove and dispose if the wind turbine down to sea level.”

Robert Sauven

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Summary Offshore Wind is considered a vital part of energy transition, with overlapping skill sets in both offshore and supply chain knowledge.

This session set out to improve our understanding on the scale of offshore wind (both now and in future projections), the geotechnical engineering involved to build, place and generate energy from turbines; and using said energy to power homes, specifically looking at the Tampen project.

‘Leverage 5 decades of oil and gas experience’

Safety

Large complex projects & supplier relations

Financial strength & risk management

Leverage local presence & corporate capabilities

Marine operations and maintenance

Technology & Innovation

Small Talk Discussion What are the main challenges for grid scale wind deployment?

• Integrated nature of development of wind farms alongside an industry that is exploring, producing and looking at CCUS opportunities. Is that environment truly integrated?

• What is the actual carbon footprint of installing these projects? Need more clarity on when they will achieve carbon neutrality and wind becomes a truly sustainable resource.

• Environmental concerns of having large structures in the see. Wildlife and sea communities around the structures.

• Commercial questions around the meeting the ‘numbers’.

• UK & Norway taking a lead in terms of position thanks to shallow seas. Expending to international arenas, the desire to see wind turbines may not be as accepted (areas of high tourism, for example.

• Significant investment to upgrade the grid.

• Issues with licensing (offshore to onshore).

Where can oil & gas and G&G skills help in the energy transition?

• Hope for utilising G&G skills for offshore wind.

• Direct application of geo-hazards, met ocean, baseline environmental, site surveys and shallow bore holes etc. in wind.

• People with a foundation in geoscience are going to be needed in the renewables industry. Extreme transferability of G&G skills, such as human skills, business/commercial skills, which are all equally applicable into renewable sector.

• Opportunities for using wider skills such as risk management and decision making.

• Jobs needed from oil and gas may be around sub-sea skill set, rather than the G&G group.

• Generally positive, but realistically how many geoscientists are needed for the wind industry.

• Questions over whether G&G skill application would diminish with the rise of floating structures.

• Acknowledgement that some may need to retrain to re-skill in the renewable sector.

• Will spacial planning be an issue?

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SESSION 4 | 09 JULY 2020

The Hydrogen Economy Moderated by Jenni Scott

Meet the Speakers

Nigel Holmes CEO Scottish Hydrogen & Fuel Cell Association

Chris Manson-Whitton Director Progressive Energy

Mike Copson Commercial Manager - Hydrogen Shell

• Nigel is the Chief Executive of the Scottish Hydrogen and Fuel Cell Association (SHFCA).

• Chris is an energy expert with a particular focus on taking innovative technologies from concept to deployment.

• An engineer by training, Mike joined Shell in 2002 to lead their Formula 1 efforts with Ferrari.

• SHFCA is recognised as one of the most proactive hydrogen & fuel cell industry associations in Europe and has 100 members, with an increasing number from Europe and overseas.

• Scotland is one of the leading locations in Europe for deployment of hydrogen and fuel cell solutions into developing low carbon energy systems.

• Highlights include the expanding hydrogen bus fleet in Aberdeen, local hydrogen energy solutions in Orkney, along with many other innovative projects such as Acorn in St Fergus and the proposed H100 development at Methil.

• His work has driven forward demonstration projects in the low carbon gas sector, notably the development and delivery of the HyDeploy project.

• He led on the development of low-cost low-carbon hydrogen production within the HyNet Programme and headed up Progressive’s waste and renewables developments, in particular focused on production of low carbon fuels.

• He has been part of Shell New Energies for the last 13 years, making the move to Hydrogen in 2016 to co-ordinate business development in Europe and South East Asia.

• In 2020 Mike’s focus shifted to the UK, Middle East and global Hydrogen strategy after the successful activation of the South East Asian markets.

• He was responsible for commercialising products from Shell’s Gas-to-Liquids ventures globally, leading downstream efforts in both existing and new territories.

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Summary Aptly scheduled immediately after the EU had released it’s hydrogen strategy, the aim of the 4th session in our series was to give an overview of the hydrogen energy economy and the opportunities for use in industry, transport and heating. The session also set out to delve deeper into both green and blue hydrogen production.

Small Talk Discussion

Public Perception

Blue Hydrogen

Efficiency

Key points discussed in breakout group 1:

Key points discussed in breakout group 2:

Key points discussed in breakout group 3:

• Two trails of thought: - Health & Safety - Energy and Economics

• General feeling that Blue Hydrogen production was a necessary part of the transition.

It would be difficult to go straight from where we are now to Green Hydrogen production.

• All about Green Hydrogen.

• Public perception seems to be positive, seeing the benefits of a purely clean source of energy leaving water and little else.

• That being said, currently most hydrogen is created by the burning of methane.

• From an economical view, the compatibility with existing natural gas pipelines is a ‘big win’ for hydrogen.

• One challenge raised was why create hydrogen (blue chain) in the first place given the challenges and inefficiencies.

• Blue Hydrogen is cheaper than Green.

• Overall network from ‘source to sink’ is strongly related to how oil & gas industry works as a whole already.

• Losing efficiency at each point of the process, so the energy produced is minuscule in comparison to the energy used.

• Arguments for putting energy/ efforts into producing better batteries?

• Convenience to end user.

• Opportunities to use current infrastructure for production.

• ‘Majors’ will not make much money out of Blue Hydrogen but might out of Green Hydrogen in the future.

Do you agree or disagree?

Participant Reflection “Blue hydrogen could be a short-medium term stop-gap in the race to green, sustainable energy. A combination of CCUS with hydrogen means the CO2 storage cost can be passed on to the consumer without the need for an agreed carbon price. The UK is well placed to rapidly build and utilise this technology as there are many industrial hubs situated close to offshore depleted fields and a wealth of technical expertise to make it happen.”

Participant Poll Results

Contribution by Matthew Booth, Senior Geologist

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SESSION 5 | 23 JULY 2020

The Energy Transition and the North Sea Moderated by Neil Frewin

Meet the Speakers

Andrew Hockey CEO Independent Oil and Gas plc

Nick Richardson Head of Exploration & New Ventures Oil & Gas Authority

John Underhill Professor | Heriot Watt University Scottish Science Advisory Council Director | Centre of Doctoral Training

• A petroleum geologist by background, Andrew has a degree in Geology from Oxford University and a Masters degree in Petroleum Geology from Imperial College.

• Nick holds a Bachelors Degree in Geology from the University of Oxford, a Masters Degree from the University of Edinburgh and a Doctorate from ETH Zürich, Switzerland.

• John is a Professor of Exploration Geoscience at Heriot-Watt University in Edinburgh, Scotland.

He is also the Academic Director of the two pan-UK Doctoral Training Centres in Oil & Gas and GeoNetZero.

• Andrew has 35 years of experience in the upstream oil and gas industry, with his earlier career spent with European majors Fina and Eni and with US and UK independents Triton, Monument and LASMO. • Andrew has worked both in the UK and overseas including Singapore, Australia, and Italy and his experience covers NW Europe, North Africa, the Caspian and Southeast Asia.

• He is currently CEO at Independent Oil and and Gas plc, NED at Chariot Oil and Gas plc and at Fairfield Energy Ltd.

• He previously held various positions within a number of E&P companies including Shell, Maersk Oil and Dana Petroleum.

• Nick was appointed Head of Exploration and New Ventures for the Oil and Gas Authority in mid-2015. Nick is responsible for managing the UK’s portfolio of offshore licences and prospective resources, as well as strategic exploration and appraisal activities supported by subsurface technical operations and studies.

• He populates the Scottish Science Advisory Council, the Oil & Gas Authority (OGA)’s Exploration Task Force, National Data Repository (NDR) Advisory Board and was a member of the Royal Society of Edinburgh (RSE)’s Energy Inquiry Team.

• John also sits on the Natural Environment Research Council’s UK Geoenergy Observatories Science Advisory Group (GSAG), which is overseeing the delivery of the £31M BEIS-funded UK Geoenergy Observatories (UKGEOS) project that is establishing two new centres in Cheshire and Glasgow for world-leading research into the subsurface environment.

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Summary Looking to the UK’s doorstep, the North Sea is a mature but significant super basin that has powered the UK economy for decades. The focus of this session was to facilitate conversations between industry, regulator and academia representatives as they considered what the future looks like for the North Sea and how it should be addressed in an energy transition context.

Participant Reflection “[It] will depend on political and societal will, rather than technical capability - what are we (as a society) prepared to pay for readily available energy? In the North Sea, we have a combination of subsurface geological characterisation, rock-fluid engineering history and data, and existing infrastructure that is close to unrivalled. There is a huge opportunity to leverage these advantages in building (or re-tooling) a world-leading industry...but this opportunity has been available and dormant for well over a decade.”

Anonymous

“The UK government says that we need to reduce emissions from 800MTCO2e/yr to 100GTCO2e/ yr from 1990 to 2050 [1]. We have been on that straight-line decrease for thirty years doing the easy stuff. There are three major levers to do this: efficiency, low carbon energy, and CCS. Efficiency is the lowest hanging fruit and we have seen significant investment by the public in lagging lofts etc. For the next lowest hanging fruit, the government has navigated low carbon energy so solar and wind now compete in an open market and coal has been swapped out for gas. There is a natural limit to how far and fast these two levers can go.

To achieve our 2050 emission goals, every mitigation initiative must work and more. The Royal Society et al state “even with very stringent emissions reductions across all sectors of the economy, around 130MtCO2/year would need to be accounted for by negative emissions technologies [requiring CCS] if the UK were to reach net zero emissions in 2050” [2]. That’s 26 “Northern Lights” projects [3].

The global requirement for CCS is

immense. If CCS is to capture 14% of the global emissions as needed for the two-degree scenario [4], then about 5000MTCO2e/yr needs to be sequestered or 1000 Northern Lights.

CCS is quite literally Cinderella ready to sweep up the oxidised soot. She knows exactly what to do so long as someone will pay for her ticket to the Ball. That’s the problem right there.

Cinderella or CCS equates to the garbage cleaner. Nobody pays to have garbage taken away to land fill until they have a nice place to live and know what really is garbage. Northern Europe may notice their neighbourhood is getting fouled, but are they willing to pay, say, $40-80TCO2e to remove it?

A similar thing happened in the 1850s when John Snow hypothesised that cholera was water-borne so cleaning our city water supplies might stop people dying. Here was an invisible germ killing people which various scientists didn’t acknowledge.

Sound familiar? The 1866 Sanitary act allowed action to be taken against local authorities that did not supply clean water. Then we

saw a significant reduction in Cholera.

If the Northern Europeans accept a real price for CCS, there is a good industry for the UK/North Sea. If the world accepts the price there will be an industry as big as our global oil and gas industry to enter.

But a sobering comparison is a map of northern hemisphere CO2 emissions per capita [5] and southern hemisphere cholera cases [6]. Sadly, we still haven’t eliminated cholera.

We can fix Europe but a great deal of the world can’t pay for their ticket. They have other things on their mind as well. Fix that and we have a major industry and a major solution. No pressure COP26!”

[1] Figure 1.1 UK-climate-action-following-theParis-Agreement-Committee-on-Climate-ChangeOctober-2016.

[2] Page 44/76 - https://assets.publishing.service. gov.uk/government/uploads/system/uploads/ attachment_data/file/759637/beis-ccus-action-plan. pdf [3] https://northernlightsccs.com/en/about [4] IEA (2017) Energy Technology Perspectives 2017 [5] https://ourworldindata.org/grapher/co-emissionsper-capita [6] http://gamapserver.who.int/mapLibrary/Files/ Maps/Global_Cholera_2010_2015.png

Contribution by Sean McQuaid

Page | 17

SESSION 6 | 06 AUGUST 2020

The Battery Supply Chain Moderated by Lucy Williams

Meet the Speakers

Lucy Crane Senior Geologist Cornish Lithium

Richard Herrington Head of Earth Sciences Natural History Museum (NHM)

Kathryn Goodenough Principal Geologist Deputy Director BGS Global

• Lucy is a geologist with a background in grassroots exploration.

• At the NHM, Richard has a key role to develop the scientific staff and extensive earth science collections whilst facilitating the diverse science programme in line with the museum overall Science Strategy.

• Dr Kathryn Goodenough is a Principal Geologist with the British Geological Survey, and Deputy Director, BGS Global.

• She holds an MSc in Mining Geology from the Camborne School of Mines and a master’s degree in Earth Sciences from the University of Oxford.

• Prior to joining Cornish Lithium, she worked as an exploration geologist for Altus Strategies; planning and implementing exploration strategies for base and precious metals projects up to drill stage in Africa.

• She now applies these skills to Cornish Lithium’s exploration programme. Part of her role is to foster collaboration with other industry and academic partners to accelerate the exploration programme and test new concepts.

• He retains an active research portfolio, currently focused on metals critical for our modern economy in earth systems, helping to develop greener ways of finding and extracting them, leading to sustainable post-mining legacies.

• Prior to joining the NHM Richard worked in the mining industry, leading successful exploration programmes throughout Europe and Africa, and much of his research has strong emphasis towards practical outcomes.

• She has over 25 years’ experience of research in geology and natural resources, with a particular interest in the critical raw materials needed for decarbonisation.

She also leads a DFID-funded partnership programme for BGS, which focuses on sustainable management of mineral resources in developing countries.

• Kathryn is a Council Member of the Geological Society, a member of NERC’s Peer Review College and the Executive Committee of the International Continental Drilling Programme, and Executive Editor for Petrology at Geological Magazine.

Did you know...

The 2019 Nobel Prize for Chemistry was awarded for research into the development of lithium iron batteries!

This surely demonstrates the importance of batteries in the future of sustainable energies.

Page | 18

Summary Another integral element of our future aspirations for a low carbon economy - The Battery Supply Chain. Session six of the series sought to explore how the growing demand for electrification and the battery storage needed for intermittent energy sources, would impact the supply chain. In a battery market estimated to be worth over $100 billion by 2025, questions over supply shortages and price inflations were included in this session’s agenda.

Participant Reflection

“Battery technology is a key intermediary to the intermittency problem posed by Solar and Wind for example. Hence, this energy vector has a key role to play in the battery supply chain. My take away...was the exposure to the multiple facets of the battery supply chain, with China dominating the market across each individual supply chain point. Unique opportunities for the UK may come in establishing collaborative

strategic alliances with market leaders.

Alternatively, R&D innovation towards enhancing the capacity and performance for battery technology (with IP retention in the UK), could also be another interesting opportunity to have a more respected voice at the global table.”

Contribution by Sylvester Bamkole R&D Technical Consultant

Small Talk Discussion

Key Discussion Points • Are other countries pursuing Energy Transition with the same enthusiasm as the UK? • Energy poverty and how batteries are used in infrastructure. This links to affordability, accessibility and reliability of the materials including where they come from.

• Lithium needs a 5 fold increase in the next 10 years which seems a challenge in itself.

• Is there a role for people in the mining industry who currently work in oil & gas? What skills can be transferred across to energy transition.

• What is the competition? China seems to be dominant in battery supply chain but are there opportunities for the UK to effectively compete in the battery supply chain? Need encouragement to be innovative in the space.

• Ethics, as in doing it the ‘right way’. Consumers have to take responsibility and accept that there is a premium to do it ethically.

• Concerns on whether there are in fact enough resources available for the battery supply chain.

• The lead time from exploring for and then operating mines is 10+ years, which shouldn’t be overlooked.

• Recycling is effectively ‘urban mining’ and is an energy intensive set of processes that doesn’t necessarily support the image of ‘clean and green’. Is reusing a better solution?

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SESSION 7 | 20 AUGUST 2020

Geothermal Energy Moderated by Dave Offer

Meet the Speakers

John Gluyas Executive Director Durham Energy Institute

Robert Winsloe VP Business Development Eavor Technologies Inc.

Phil Townsend Director & Chief Associate Town Rock Energy

• Jon is currently the Executive Director of Durham Energy Institute.

• Robert has nearly 40 years international business development, sales, marketing and management experience in the energy industry.

• Phil had subsurface technical, and significant leadership roles in the global oil and gas E&P business for over 30 years, mostly with one of the oil majors.

• Graduating with a degree in Mechanical Engineering, he lived and worked in Indonesia, Australia and India for Schlumberger.

• He has a background in exploration geology and notes wryly that whilst finding hot water was never the intent he has quite a track record of success!

• He began work for BP in Aberdeen in 1981 and roamed the world with BP until 1996, returning then to the UK and mid-cap Monument plc. Jon was a founder of Acorn Oil and Gas in 2001 and Fairfield Energy in 2005.

• Since joining academia he has served as head of the Earth Sciences Department and Dean of Knowledge Exchange. His main research interests are geothermal energy, carbon capture and storage, helium exploration and human induced seismicity.

• In addition to serving as PESGB President in 2009, John has been President of the Earth Science Teachers Association, Chairman of the British Geological Survey and he is currently a member of the Strategic Advisor Panel on energy for UKRI. • Jon is currently a director of three university spin out companies: GeoEnergy Durham, Geoptic and TerraMotion.

• Returning to Europe he joined IBM, before going on to build and manage international sales and marketing organisations for Halliburton and IHS, as well as personally closing multi-million dollar energy related contracts across the world.

• He advised Chinese state companies on strategic gas development and has been a frequent consultant to the World Bank on projects ranging from energy planning in Angola, to infrastructure development and capacity building in Mauritania.

• Phil brings expertise to TRE in managing uncertainty and risk, project management and opportunity evaluation.

• Phil has had a long term interest in renewables and climate change.

He has investigated and invested in energy efficiency, biomass, solar PV and electric cars. He believes that the many small actions of the many are a powerful force for change in seeking a more sustainable future. Acting as an adviser and technical expert for Town Rock Energy is another step in the right direction.

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Summary Taking into consideration the intermittency of some key renewable energies such as wind, is there an opportunity to ‘boost’ available energy through the likes of geothermal? As part of this webinar session, the industry experts set out to share their knowledge of geothermal, new technologies and opportunities for utilising waste products in the production of another sustainable energy source to help better manager energy availability.

Q&A What are the main technical, and non-technical, blockers to Geothermal being a key part of the future energy mix in the UK (both offshore and onshore)?

“For closed-loop systems like Eavor-Loop the main obstacle is demand. With 50% of the UK’s energy consumption being heat and the conversion of geothermal heat for direct use being 90% efficient that is the obvious place to start. In the Netherlands they are committed to taking the whole country off gas by 2050. That is driving massive innovation and planning and refitting of cities to run on district heating. I do not see the same long term vision from the UK government.”

What role can UK oil and gas operators play to drive geothermal developments in future?

“The oil and gas sector is absolutely pivotal to the future success of geothermal. If you take Eavor-Loop we are drilling at least 50Km or horizontal well section for every system. And we intend to drill thousands of systems over the next 10 years. So every skill set and near all the technologies for oil and gas will be needed.”

Participant Reflection “A resonating point I always get with Geothermal energy is that it very much feels like the ‘runt of the energy vector litter’ - as there are a lot of misconceptions around its feasibility, economics, etc. One of the key blockers ofcourse is public perception and government backing. As a comparison, Hydrogen technology has been around for a while now. It is produced from fossil fuels by steam reforming or partial oxidation of methane and coal gasification. The whole climate agenda is to minimise the utilisation of fossil fuels, yet, Hydrogen till relies on utilisation of fossil fuel use - which is a very interesting contradiction in of itself. Yet, it is still more favourable and gets more attention and backing in comparison to Geothermal. All other energy vectors are above surface and geothermal offers a unique subsurface contribution to to the mix - however, it still seems not to be getting the right amount of backing. I am keen to see what the true potential of Geothermal would be if it got the same amount of legislative backing, investor confidence and public acceptance as Hydrogen has gotten to date.”

Contribution by Sylvester Bamkole R&D Technical Consultant

“Geothermal energy has great potential in the development of new technologies and the improvement of the existing ones, and its application in the least developed countries can represent a crucial theme in the near future.”

Contribution by Luigi Massaro, PhD Student “Two revelations...that (if I understood this correctly) the North Sea has produced as much energy as waste heat as it has with hydrocarbons, and the pointer to the MyGridGB website (which was slightly off-topic as it relates to Electricity generation). I’d like to see a MyGridGB for the domestic and industrial gas network - I know from personal experience that by using smart appliances and solar panels it’s possible to achieve net zero electricity consumption, but during the winter months we use around eight times more Kwh on gas for heating than electricity. District heating through geothermal should try to offset gas in population centres, and outside these areas the gas network switched to hydrogen.”

Contribution by Paul Britton, Director, StrataData Ltd.

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SESSION 8 | 03 SEPTEMBER 2020

Energy Transition Final Thoughts Moderated by Lucy Williams & Hamish Wilson

Meet the Speaker Marc Gerrits | Executive Vice President Exploration Shell International • Marc is the Executive Vice President of Exploration for Shell International and has been with the company for 35 years.

• Having joined Shell in Australia, Marc has had an international career working in Angola, Egypt, Libya, Singapore and Europe.

• He returned to Europe working in exploration leadership.

Firstly…I think we are in a transition and it’s the role of oil & gas companies to continue to produce hydrocarbons safely and efficiently whilst the transition is happening….We can’t take our eye of the current ball.

Secondly…. There’s a hugely important role for oil & gas companies to participate in the debate that’s ongoing, to educate….It’s very important for the industry to have its voice in all of this.

Thirdly…the industry needs to participate in the energy transition.... Directly, in terms of for example exploration…making our own operations more efficient. Then there’s the wider participation, in the sense of oil companies moving into new energy

space [such as carbon capture & wind].

There is time for us all to get into this, to participate in this, ...to get experience with new energies as in a lot of cases, we really don’t know exactly how we’ll be making money in that space. ...our role to educate about the realities. There is no scenario in the short to medium term that oil & gas won’t pay a very big part in the energy picture.... It is just the reality. It’s super important that we play a responsible role in continuing to produce oil & gas and to participate in the transition but people should be under no illusion that it’s not something that can be switched off overnight.

“

“

Marc’s response to “What’s the role of oil companies in the energy transition”

Marc talking about the perception of geoscience & it’s future in the energy transition. “ I would invite geologists to come into the industry to participate in that [climate change]. That’s be partly to do with oil & gas as we see today, then to transition into these alternative technologies that we are talking about and to use skill sets that they’ve got to get into project management, HSE... that will be applicable in whatever form of energy we have in the future...

[Talking about younger generations]... We want them to educate themselves, become interested in, participate in that energy transition narrative.... Make the story about how this is important for the future and how they can contribute to that, and I firmly believe that we can make an energising story that’s around technology etc. but we’ve got to put the effort in.

It’s about education everybody in their role on this, and making sure we play our part in that transition....”

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Summary The last session of the Energy Transition Webinar Series offered a round up of what had been explored over the 14-week programme. Joined by industry expert Marc Gerrits (Shell International), the final conversation revolved around 3 broad topics led by participant feedback: The Energy Transition in general, The Role of Exploration, and importantly, Careers and Employment.

Participant Reflection

“The Energy Transition – A Matter of Perspective As a young man, I was struck by a 1986 Guardian TV advert called “Points of View”. The viewer initially sees a skinhead sprinting away from a car. The perspective then changes to show him racing towards, and grappling with, a respectablelooking man - seemingly trying to wrestle a briefcase from him.

The final clip reveals the skinhead rushing to protect the man by pushing him away from a palette of falling bricks. The voiceover summarises: “It is only when you get the whole picture, that you can fully understand what is going on”.

The Energy Transition too, is multi-faceted. There are many perspectives, and it is challenging to see the full picture.

The Coronavirus Lockdown has seen a proliferation of Energy Transition webinars from diverse organisations.

These have shown alternative perspectives, including from environmentalists, renewables providers, and the oil and gas sector. Different perspectives suggested different

solutions. One panellist saw development of a hydrogen sector as something of a deadend. His background was the automotive industry and he spoke against hydrogen fuel cells based on energy efficiency and refuelling infrastructure.

For domestic heating, he argued that green electricity should be used directly for heat rather than converting it to hydrogen in an energy-inefficient process. Perhaps he has a point, but I have heard compelling arguments in other webinars in favour of a hydrogen economy, particularly for some of the hard to decarbonise sectors. My takeaway is not to presume one side is right or wrong but to recognise the differing perspectives.

We are unlikely to succeed in delivering the Energy Transition if we remain in our silos and press stubbornly ahead. We need to understand alternative perspectives through discussions with those who hold differing views and work together to provide new solutions.

As a PESGB audience, we see the Energy Transition from an Oil and Gas perspective. “Is the industry part of the solution?”, we

ask. “Well, of course it is”, comes our response. However, there are plenty outside the industry who believe that the oil companies are the problem and therefore should not be part of the solution. We need to make sure our house is in order, engage with the wider community, and ensure we retain a social licence to operate - as well as access to funding from financial institutions who increasingly need to comply with ESG criteria.

In my view, the Energy Transition must include a significant scaleup in Hydrogen production (for heating, heavy transport, and some industrial processes). This can only be achieved swiftly, costeffectively and at scale through Blue Hydrogen (methane reforming with CCS). Green Hydrogen from electrolysis will be phased in as Green Electricity supply increases.

In the coming decades, gas will still play a significant role in power generation for load balancing, and hydrocarbons will continue to be used in certain industrial processes and the petrochemical industry. To decarbonise these sectors, CCS will be essential.

That is my perspective.”

Contribution by Barry Brennan, Consultant

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Participant Reflection “I am still not sure whether Energy Transition and net zero carbon can be achieved by 2050 - but 30 years is a long way away. At the moment I see many potential issues, but scientists are incredible at solving problems. I believe we need to try all approaches to energy transition. And I believe the G&G community, and the skills they have, can be part of the way forward. All the pieces of the ET jigsaw have ‘warts’ and I will quote Scott Tinker (Switch Energy Alliance & University of Texas) who at the ONS conference on 31st August said “no form of energy is affordable, reliable, available and sustainable (secure)”. He

also said we should not get rid of fossil fuels but we do need to clean them up. I agree with this statement. I worry that only a few countries - mainly in Europe - are pushing ahead with expensive ET programmes. These will need subsidies like those given to kick start the uptake in offshore wind power generation, and will be to the detriment of the individual countries. Costs for energy will increase. Will this disadvantage the UK when competing on the world stage? How does this all fit in with UK plc, MER (Maximising Economic Recovery) & ensuring we use indigenous resources rather than importing energy with

a higher carbon footprint from elsewhere? It would be good to hear an independent view on ET. What we have heard is mainly from those with a ‘finger in the pie’. We need to put all the initiatives into perspective with pros and cons, impact, costs etc. to try to rank them in some way. Lastly how to educate the public that oil & gas cannot just be ‘switched off’ without serious consequences to their lifestyles & wellbeing.”

Contribution by Alyson Harding Technical Manager, NW Europe E&P

“

Educating ourselves (geoscientists, industry colleagues) about the nature of the energy transition is vital if we are to have an informed debate going forward. We now need to communicate the realities of the energy transition to others. Looking at the data in BP’s Energy Outlook 2020, >900 Billion Barrels of Oil and >2000 TCF of gas are required by the global economy from now to 2050 in a rapid transition scenario. Some of that will come from existing discoveries, some from new exploration. In either case, finding and producing with minimal carbon intensity will be key. Carbon storage may be needed alongside this, but its unclear if the energy needed to capture and store the CO2 results in a net gain. The bottom line is that as stated by Shell (https://www.nasdaq.com/articles/exclusive-no-choice-but-to-invest-in-oil-shell-ceo-says-2019-1014?amp), the industry is needed and is here to stay. There are those in society who may want to wish them away, but hydrocarbons as an energy source can’t be quickly replaced without massive societal disruption.

Obviously this is a very difficult message to communicate, but nonetheless we must try.

“

Contribution by Mike Simmons, Haliburton Technology Fellow for Geosciences

“The energy transition is no longer a debate. It is real and it is very exciting (speaking from someone who is part of it). However, there remains huge doubts in my mind as to the future need for geoscientists in these areas. A few specialists certainly, but will we need the number of geologists currently working in the O&G industries? Unlikely. And that is why there are no job adverts for ‘CCUS geologist’ or ‘Energy Transition Geologist’. Geologists are simply repurposed from current roles.”

Contribution by Matthew Booth, Senior Geoscientist

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Energy Transition Final Thoughts Moderated by Lucy Williams & Hamish Wilson

“My personal view is that energy transition has already begun and that the E&P industry’s response has been predominantly reactive – seeing alternative energy streams as presently uneconomic or as peripheral – whilst public opinion and governments in the OECD nations have already committed to these solutions a result of concerns on climate change. However, government roadmaps to change are still highly conceptual and frequently reliant on economic subsidies to keep them on track. Through the energy transition webinar series, two key areas of concern/ opportunity stood out to me as being critical as it relates to us as members of the PESGB – the E&P industry needing to adopt a constructive engaged approach, and how we address this as part of the bigger energy supply picture.

At the moment we are seeing some innovative approaches and some companies re-positioning themselves – including Lundin, Shell, BP, Equinor, Total – but not acting in concert - and I fear

that the industry runs the risk of becoming side-lined if it doesn’t act together. Firstly, the debate about energy transition has moved on rapidly and we are already in the implementation stage in many regions, with Northwest Europe (including the UK) leading the way – so the broader E&P industry is at risk of not having its voice heard where it matters - with the decision makers (regulators/ government/investors).

There are plenty of lobbyists for and advocates of particular alternative energy solutions who see E&P (including the skillsets we possess) as shortly to be irrelevant or redundant. At the same time, these same industries do not have an overarching integrated approach, so none are able (on their own) to provide effective solutions to regional or national energy requirements. The E&P industry has enormous relevant expertise and experience to offer - but what is the best way to get a seat at the table - is it through industry bodies, co-operation with universities or through better

engagement with the new energy providers? Secondly, whilst there is a great deal of enthusiasm and growing expertise in alternative energy in the UK, Europe and North America and a desire to build on this, likely creating export opportunities – this is obviously a global issue requiring global solutions. The recent COVID pandemic has shown the West’s supposed scientific/technical expertise and ability to lead by example as questionable, so we should not assume that Europe, the UK and North America can simply tell the rest of the world what to do and expect this to happen. Energy poverty and security is a bigger driver than green energy in much of the developing world, affecting billions, so how can the E&P industry play its part in framing a total energy approach that is flexible, whilst encouraging and accelerating energy transition?”

Contribution by John Francis Bell

“There is no silver bullet with the energy transition. The energy mix will be a combination of various energy vectors with each playing their part. The interesting bit will be establishing how best to integrate all these disparate vectors within a cohesive system, required to reach NetZero2050. Although there are challenges with the technologies, a lot of the main blockers with accelerating the transition are around political will, public perception, legislative backing, etc. Thus, in terms of transferable skills for geoscientists, a broader skillset will be needed at the table. Finally, I am of the opinion that O&G/Mining (and the accompanying expertise) is vital to the Energy Transition. Whether that is for mining lithium, in lithium-ion batteries, mining metals (copper, aluminium, etc.) for manufacturing wind turbines, in Offshore Wind technologies, or simply fuelling the transition - O&G has a very vital role to play.

Contribution by Sylvester Bamkole, R&D Technical Consultant

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Energy Transition Final Thoughts Moderated by Lucy Williams & Hamish Wilson

“A general but important point is that all the talk is about an Energy Transition. This implies a process that is gradual, with no big shocks and which is manageable by individuals and organisations.

A more realistic term to use is Energy Disruption; as that is what it actually is. It will be the destruction of many industries related to fossil fuels in power and transport and their replacement by something else; in many cases that replacement is already clear.

In this sense the “transition” will happen faster than anyone expects it to and it will come with sudden changes.

It is likely that the Covid-19 pandemic has brought forward this change and that the world saw peak oil demand in 2019.

The simple fact is that although the world still needs fossil fuels the technology to replace them in very many uses already exists.

These replacements are becoming rapidly cheaper and are a better solution to energy provision and transportation than fossil fuels.

The single largest use of oil is in internal combustion engines for road transport, ~45% the last time I looked (for a 2016 conference poster about the impact of EV’s on our business). All of that usage is now redundant, electric motors and batteries are replacing ICE’s in everything from small city cars to large SUV’s, buses to mining trucks and road machinery. That change is a very clear disruption and the rapid eriod of change hasn’t even started yet; when it does it is likely that new car sales will switch from 95% ICE to 95%

BEV in less than a decade; then whole fleet replacement happens quickly. Although that may seem that there are a few decades to go it is not the case. Pre-Covid annual oil demand growth was about 2% p.a. so the EV transition does not have to progress far before it displaces that 2% growth and oil demand is in a permanent decline. Declines have never been good for industry investment or job prospects. There are valid points regarding the intermittency of renewable generation for countries like the UK and we will need to have gas power available to cover those low wind scenarios; almost regardless of ultimate wind capacity. That will maintain a need for gas for some time but CCS/ CCUS from gas power plants will only be a stop gap. It will never enable that industry to continue indefinitely.

Space heating and hot water can be replaced by heat pumps and thermal batteries (https://www. sunamp.com/) and in some cases geothermal. So again the solution to gas for domestic heating and hot water is already with us; it just needs to be built out.

It is important to realise that these changes will happen regardless of what we in the oil and gas business do. The replacements are cheaper and better and will naturally be chosen. This is a decline that just has to be managed and endured as best as possible and I think it is important that the PESGB recognise that, accept it and do not try to resist it; or waste time arguing that oil will still be vital well into the future - it may well be

necessary in some circumstances but it will be a vastly smaller industry.

I often hear people say “but we need hydrocarbons as a feedstock for the petrochemical industry and for heavy industry”; and whilst this is true it is a small percentage of produced hydrocarbons and alternatives are being developed. Unilever have recently pledged to remove all fossil fuel derived carbon from their cleaning products by 2030 (https://www.unilever.com/news/ press-releases/2020/unileverto-invest-1-billion-to-eliminatefossil-fuels-in-cleaning-productsby-2030.html) and everyone is trying to move away from single use plastics. But even if that didn’t happen and oil demand for petrochemicals doubles it is still a minor fraction of demand; nowhere near enough to keep the global oil business in its current form.

There is just no sensible scenario in which oil demand is not in decline in the very near future.

And the impact of that on jobs globally is clear and negative.”

Anonymous

Page | 26

“I see that there is a huge range of options and choice out there within the energy transition, but the one thing that I didn’t hear at all...was any economic solution...the value is actually on the planet it’s not a monetary value.”

Stand out message: Opportunities to produce hot water and hydrocarbons at the same time, offering a win-win situation with both a financial and green incentive.

Contribution by Maddy Slatford, final session participant

“I’ve come away with a bit of an altered outlook. I’m optimistic about the net zero challenge, having seen these many different available technologies, some already well established and growing, like offshore wind, which I wasn’t aware of the scale before. However, I’m also uncertain about the future as other industries like geothermal and CCS seem to be calling out for government funding and their rate of deployment seems much to slow to be effective... ...The current energy industry seems to be in a state of evolution, oil companies going to energy companies, and this may provide a lot of opportunities but also uncertainty regarding career decisions. There’s been welcome talk regarding decolonisation and targets by mid and large size energy companies, which demonstrate to me - at least - that internally minds have changed and that’s resulting in change of behaviours.

However the actions are yet to be carried out and those targets are yet to be fulfilled, and the impact of announced changes are yet unknown.... ...One of the answers...seems to be energy diversification. The future of the energy industry seems to be diverse. The future energy mix is uncertain but there are many potential pathways and options to achieve the energy transition.”

Contribution by Sam Head, final session participant

“In any transition, there are those who fear the change and there are those that embrace the change, and what I’ve seen from the wind industry, the hydrogen, the batteries, the mining, is that ambition, that exciting, that innovation to drive that change. It really shocked me at how quick they’ve moved. ...What does that do though for geoscientists...we have had many people talk about transferable skills from oil & gas but every time I’ve noted down those transferable skills it does seem to rely on engineering and offshore capabilities, more so than subsurface so I think that, unfortunately, that will be a change that happens.... ...All of these things are up in the mix at the moment. There is no one stand out technology that is going to be able to solve the CO2 challenges, and how we integrate all those things, i think, will be the biggest skill needed going forward.”

Contribution by James Faroppa, final session participant

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Conclusion and Final Thoughts from the Committee 8 EVENTS 8 SMALL TALKS

Over the 2 month journey, the webinar series toured through many interesting aspects that will become of the energy 22 INDUSTRY EXPERTS transition for our industry. The journey started by looking at what low-carbon targets for oil & gas companies really 16+ HOURS OF DISCUSSION mean, travelling through a diverse range of topics including implications on the North Sea and Geothermal Energy. Discussions were brought back to exploration, what the role of oil & gas companies may look like, and importantly, what skills geoscientists may be able to offer to the changing industry.

Although there still seems to be scepticism around the viability, in a commercial sense, of some of the alternative energy opportunities, and reaching the 2050 net-zero target, the overall feeling seems to be that of confidence and optimism that oil & gas can and will continue to play a role in the energy industry.

“This series of webinars seemingly appeared at the right time to engage a wide audience (newly introduced to a pandemic-induced lockdown).

Our intention to “explore the energy transition” was just that. Many of us have thin knowledge of the evolving energy landscape and how it will progressively affect change across our industry.

This webinar series and the excellent contribution of our speakers, coupled with a community of curious minds, helped all of us to deepen our collective knowledge considerably. The organisers were also able to adapt and repeat this event program (with some additional speakers) for the GeoNetZero PhD students with the Centre of Doctoral Training in October 2020, engaging a whole new audience. The PESGB and the “Exploring the Energy Transition” Special Interest Group, will deepen that journey in 2021 and we look forward to welcoming you back”.

Neil Frewin Energy Transition Committee Member

“I believe we covered a lot of ground with this webinar series. I hope like me, our delegates also learnt a huge amount about this diverse topic from below ground geoscience and engineering to above ground evolving policy and societal impact.

On the back of presentations (from our fantastic speakers), I was overwhelmed by the open, honest questioning and feedback from participants during the debates and discussion forums. For me this enriched the whole experience. In reality however, I think as a PESGB SIG we are just out of the starting blocks. The potential to explore the energy transition space is immense and I for one have many un-answered questions. So I look forward to continued involvement and to delivering further content to the PESGB community. We would welcome your thoughts on what you’d like to hear next.”

Lucy Williams Energy Transition Committee Member

“The evening webinars were always designed to be interactive, a space for discussion, questioning and opinion, as well as science. The Energy Transition is not passive, this is a full participation topic and the Geo community did not disappoint. I learnt an enormous amount through this series and can now elucidate, to friends and family, about the future of energy.”

Maria Iredale PESGB Executive Director

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What’s Next for Energy Transition?

Join the ‘Exploring the Energy Transition’ Special Interest Group (ETET SIG)!

Energy Transition will not happen overnight, nor even over a couple of years. There are still decades of work to be done in research, developing technologies and processes and improving standards across the industry.

Perhaps most important of all, is the need to educate the public about the role that they play, and will continue to play in the future of the energy transition. Knowledge sharing and open discussions could lead the way in helping to raise public perception of oil & gas in the journey to a greener, more sustainable environment.

The PESGB want to offer a platform for those conversations.

Together with the REA, we are delighted to share that we will be hosting a follow up series, delving further into the Energy Transition story. Taking a lead from the UK Government’s Energy White Paper and it’s net zero carbon commitments, the event will further explore how these goals could be achieved utilising a mix of energy resources. The series will also look closer at policies and regulations, to help better understand how the seemingly unachievable can be achieved.

Looking to further explore the options available for geoscientists in a changing industry?

The ETET SIG offers a platform for knowledge building and reflection, enabling members to consider what opportunities may emerge in Energy Transition for subsurface professionals.

Joining the SIG is a member benefit and there is no additional fee to belong to them. Head to the PESGB membership platform to join.

Initially hosted online in a variety of formats, the aim is to end the series with an in-person event in Q4 of 2021, where attendees can come together to review, and even challenge, the topics covered.

As we know, the possible implications of the energy transition and the Energy White Paper will affect much of the oil & gas industry, and so we hope this brand new series will play a pivotal role in developing discussions on ‘what’s next’ and helping participants gain better insights across the board!

Energy Transition Webinar Series 2.0 13 May 2021 - 08 July 2021

Series Price

£99.00 Individual session bookings available

Find out more at: www.pesgb.org.uk/events/energy-transition-webinar-series-2-0/

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