ENERGY MATTERS © VOL. 9
an opinion editorial written exclusively for ANZMEX
30 October 2019
By Chris Sladen
Energy matters – Something in the air
At the most recent ANZMEX energy debate, the key question in the room was ‘Can Mexico achieve zero net emissions?’ There was no doubt amongst the panellists and the audience that ‘yes, Mexico can achieve zero net emissions’ but that Mexico is not yet on the right path to reach this.
The issue of reducing greenhouse gases in the air and the importance of getting this done has been highlighted for over two decades. Major oil companies began to raise the issue from 1997 onwards, yet many governments and political parties are still to develop meaningful legislation, clear policies and binding targets. Many, but not all, of the major oil companies have now embarked on programs that lower their greenhouse gas emissions and gradually transition them into less carbon intensive business models. Many executives have performance pay linked to meeting targets to reduce emissions. Elsewhere, most medium sized oil companies now have a climate policy and well-intentioned statements on their internet site but only a few are willing to attempt any meaningful change. Their stock price and their ability to repay debt is often heavily dependent on the oil price. The existence of many smaller oil companies is often determined by results of just one or a few exploration and appraisal wells; their focus is not on long term emissions reductions.
So the challenge for change and less carbon returns to the door of the oil majors. They alone have the capabilities – scientists, technologists, researchers, engineers – as well as the finances and motivation to test different alternatives at an industrial scale. Good examples are projects for the capture and underground storage of carbon dioxide, or decarbonising natural gas to produce hydrogen that can be burnt without emissions.
Climate change has definitely become an urgent global issue requiring global solutions. The science is beyond dispute. In recent months, activists and protesters have done much to rightly highlight the climate issues, often bringing city centres, airports and trains to a standstill. The solutions though will not be found amongst activists and protesters who superglue themselves to trains and planes.
Mexico has the capability to reach zero net emissions by 2050. It has all of the skills needed. But on its current path, reliable estimates indicate it will take until at least 2070 or beyond. By then, the climate issues may well have become irreversible. Mexico has the opportunity to step up and take a global role. It requires leadership and cooperation. One possibility might be to insist that all companies across all industries in Mexico use technologies that have the lowest possible emissions.
At the same time, energy companies in Mexico will have to evolve to become part of global solutions. This includes working on devising solutions for emissions from offshore and onshore oil & gas fields, from natural gas fired power plants, from pipeline systems, and from major emissions producers such as refineries & petrochemicals plants.
Without changes, that something in the air may eventually kill us.
About the author:
Mr. Chris Sladen runs an advisory service offering insights to inform, shape a decision, and guide the next steps for energy ventures. Chris has a unique global experience having worked in the energy sector of over 40 countries. This is underpinned by extensive knowledge of petroleum systems and where best to find oil and gas, notably in the Gulf of Mexico & nearby areas, and NE & SE Asia, as well as the development of midstream, downstream & renewables investments in many emerging economies. Chris has extensive experience acquired on the Boards of companies, subsidiaries, business chambers & organisations. Chris had a career of over 37 years with BP, living in Mexico (2001-2018), Russia, Vietnam, Mongolia, China & UK.
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ANZMEX ORG A.C. is a politically neutral business council with no political affiliation. The views expressed in this column are not necessarily representative of the official views of ANZMEX or any of its officers or staff.