ENERGY MATTERS © VOL. 42
an opinion editorial written exclusively for ANZMEX
19 June 2023
By Chris Sladen
Energy matters – What the tech!
It was music to my ears when a global energy investor came to talk to me last week. She said: “let’s discuss technologies that already exist. I want to invest in companies that can lead us to Net Zero”. Over a cup of coffee, she continued: “We need to act now. Which technologies can make the big shifts, gigantic changes in the way the world does energy?”
I offered my views. The conversation was not about technologies that are decades away, or fiendishly complicated or might not work, or address one small market. Instead, we talked about what can be done now, with what currently exists and could be deployed at great scale.
Net Zero in many ways is just a concept and not something to get hung up about. What we need is a ‘world doing energy’ much better than before – better means cleaner, more efficient, much lower carbon, secure, less wasteful, cost competitive, conserving precious mineral resources, sustainable, affordable, not trashing the environment, without spillages, and without accidents, deaths, and injuries.
We should not pretend there is no problem. There is. We must get our heads around the reality that Net Zero doesn’t solve our energy issues. Can it reduce the speed of climate changes that are occurring to our planet? Probably, but it doesn’t return the climate to 50 years ago, or 100 years ago.
Achieving Net Zero is not going to be a sin-cleansing atonement in which our energy problems vanish or fade away. It is more likely a long and at times very painful journey. The worst case is that we go from today’s failures to another set. Trying to control the atmosphere, thinking we can change our climate and weather, or adjust sea-level, probably carries knock-on effects that we don’t even know about yet. Spewing out lots of carbon dioxide and methane clearly makes a mess. But who knows what happens when we release massive amounts of water vapour & heat from burning hydrogen and create swathes of turbulence as the air flows across millions of wind turbines? Nobody knows the full impact, but you can sense it’s probably not great. It has taken us around 5 trillion man-years of effort to mess up the planet. I cannot see things getting fixed in less than 30 years.
Nowadays, governments make lots of pledges about targets for carbon emissions reductions, and limiting temperature rises. Many media outlets make dramatic stories in which every storm, bushfire & heatwave is linked to climate change. Politicians and media keep telling you to be worried; this doesn’t help. It has created a world with billions of people suffering climate anxiety and target anxiety. Ultimately, technologies, companies, investment, people, and behaviours are what will get us to Net Zero. Governments ideally support, set achievable targets and good regulation. Unrealistic demands get in the way of meaningful dialogue. In the 1980s, many energy companies introduced performance contracts for their staff focussed on meeting targets; it took another 30 years to recognise that stretch targets can lead to very poor behaviours and ethics.
Today, each country has its own unique set of supply and demand requirements, and its own issues of energy security and affordability. With many technologies available, there are literally hundreds of energy transition permutations for each country. Finding the best or better technology solutions is key. Countries must decide their own pace and type of transition; some may struggle, others will have ideological challenges, some might do little.
Electric vehicles, rapid charging and automated driving is perhaps the single most vivid example of transition technologies. But it does not mean everyone has to have electric cars. Don’t expect people to choose a solution that you think is best! Don’t expect everyone to do the same thing!!
Criticising different forms of renewable or lower carbon energy is pointless. For example, solar companies lobbying against wind energy, or wind companies criticising tidal power does not move us forward. We need them all. And meanwhile, hydrocarbons, particularly natural gas, and biofuels, remain a bridge into that cleaner energy future. Protesting and activism against someone else’s solutions, their choices and plans becomes futile; achieving Net Zero is pursuit of the concept not nirvana.
Electrifying everything is now achievable, and we clearly have the technologies to get us there. Solar and wind, both onshore and offshore, are delivering the bulk of investment and growth in new electricity capacity, whilst grid-scale battery storage and subsurface energy storage solutions improve day-by-day. Hydro and nuclear, both small and large scale, are needed too. And technology upgrades to the transmission system. They form parts of a new power supply system being built globally. This will enable us to dismantle the older carbon-rich power systems that we no longer wish to have.
Air-source and ground-source heat pumps are growing in popularity; they are a key part of decarbonising heating & cooling in buildings. The US, Europe & China are paving the way with heat pumps, some markets growing 40% per year; the sales & marketing has improved dramatically in the last few years, with many more engineers now qualified. Air source heat pumps sold around 3 million units globally last year. Expect to see major engineering and equipment manufacturers move quickly into the heat pump market. These technologies are becoming more efficient, more compact, and more affordable all the time. When combined with satellite technology that can map heat efficiency in large buildings, this can identify locations for quick wins by adding extra insulation. Collection and use of waste heat from energy intensive industrial processes to heat buildings is another obvious quick win.
The drilling industry is turning to the challenges of drilling wells for heat not hydrocarbons. For shallow wells <200m, that can be connected to ground source heat pumps, drilling efficiency has more than doubled in recent years. Expect to also see high profile projects to decarbonise very large buildings (such as hospitals, datacentres & airports) using heat in fluids produced from deeper wells. Closed-loop technology developed in the last few years now offers a ‘geothermal-anywhere’ solution that does not involve producing and injecting formation fluids. In addition, the technology now exists to convert any onshore exploration well that fails to find hydrocarbons, to provide geothermal heat/power production. And technology exists to convert late life oil & gas wells to co-produce heat, with oil & gas, and eventually just heat.
Carbon capture and underground storage (CCUS) is another technology moving forward. Capturing CO2 from natural gas production that is transformed to make hydrogen, and injecting the CO2 into subsurface storage, typically in depleted hydrocarbon reservoirs, is no longer new. With strong government and financial support, I expect announcements about bold projects in coming months. CCUS and hydrogen is another part of the bridge to a cleaner and more diverse energy future.
There are opportunities in other oil & gas technologies too; for example, improvements to reach zero venting and flaring, while the power sector must target zero emissions of sulphur hexafluoride and other highly potent greenhouse gases. These are low cost, quick wins. Any avoidable emission needs to be avoided!
The good news is that the technologies we need to transition already exist and are being improved all the time. Skills and learning increase every minute as installing cleaner technologies and refining sustainable biofuels takes hold globally. Some may feel there is inertia, but our technologies improve every day, as does operational efficiency. New digital technology – AI, blockchain, big data and machine learning are revolutionising energy operations, payments & procurement. Financial support for developing economies to switch to clean energy technologies will help speed transition.
Universities now produce tens of thousands of graduates each year with deep understanding of clean low-carbon technologies, environmental science, and how to finance and engineer low-carbon energy. These are the workforce that will deliver a transition, innovate, and arrive at Net Zero. Meaningful education does not come from talk-back radio or extremist actions against motorists. We should stop worrying, and protesting, and convert our anxiety so that we support, nurture, and encourage all students studying cleaner energy. This would be time, effort and money well spent. They will need courage and enthusiasm. They are the ones who will deliver and manage clean technology solutions and engineering for flying, shipping, cement & steel making, agriculture and clothing to name a few. We need them to become warriors, overcoming technological inertia wherever they find it.
To complete our conversation my investor friend asked to review which governments are setting policies and frameworks that encourage the energy transition? She wanted to know which inter-government relationships would speed the transition, and which relation bust-ups will slow it? Could traditionally slow-moving State Oil Companies undermine the energy transition? Who might sabotage the transition? A new generation of State-owned entities are appearing, both in sustainable energies and critical minerals, as Governments rush to grab a share, or in some instances nationalise, these potentially lucrative industries. I hope to cover those in a future edition of Energy Matters.
In summary, we are headed into a multi-fuel future in which all clean energy technologies are needed. Technology can deliver less emissions, affordable and more secure energy; it will (and already is) leading us toward a Net Zero future. We have the technologies that we need for the current problems; cost reductions will come from scaling-up, continual technology improvements and operational learning. We just need to try harder and get on with it. There is a heck of a lot to do but rest assured, and don’t worry, the tech is happening. And hopefully it can stall climate change too.
About the author:
Chris Sladen runs an advisory service offering insights to inform, shape a decision, policy & regulation, and guide the next steps for energy ventures, acquisitions & divestments, energy transition and climate strategies. Chris has a unique global experience having worked in 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, Europe 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 has a career of over 40 years in the energy sector, living in Mexico (2001-2018), Russia, Vietnam, Mongolia, China & UK. His contributions to the energy and education sectors have been recognised by the UK Government with both an MBE and CBE, and also the Aztec Eagle from the Mexican Government – the first foreigner in the energy sector to achieve this award. Chris has published extensively over five decades. Chris’ articles for Energy Matters reflect his experience and enthusiasm and are not paid for in any way.
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