Oil and Gas Energy transition
Future-proofing the offshore industry The energy transition and the UK’s drive to net-zero requires the oil and gas industry to embrace energy efficient operations, while supporting the growth of CCS, offshore renewables, and hydrogen, writes Mark Dickson at io consulting
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il and gas as a source of energy is a significant fraction of the 2050 energy mix, despite many opinions in the popular press to the contrary. Limiting global warming to 1.5°C will require ambitious, internationally cooperative policy environments that transform both supply and demand, and in turn, this will put pressure on oil and gas. By 2050, in the latest International Renewable Energy Agency Renewable Energy Roadmap reference case, fossil fuel use for energy would fall to one-third of today’s levels. Oil and coal would decline most, by 70% and 85% respectively. Natural gas use would peak around 2027 and would be the largest source of fossil fuel by 2050, however with production declining by 30% from the present level. Undoubtedly, oil and gas will be around for a while.
investor appetite for a quicker payback Carbon lobby groups applying pressure to avoid the development of higher carbonintensive resources – such as heavy oil, tar sands, and so on.
The volatility of oil and gas prices – for example the recent oil price crash stimulated by COVID-19 and the unpredictable nature of geopolitics related to energy Government pressure for the oil and gas
Is future-proofing possible? It seems, in current months, oil and gas assets and developments face a continuous stream of emerging risks – some old and some new. Facing a full range of emerging risks and the pressures from climate change, how can the industry design future oil and gas developments, and is future-proofing realistically possible? We see the major risks facing the industry as follows: The pressure to reduce methane emissions – according to researchers from the US University of Rochester, methane’s effect on global warming has been underestimated by 40% The availability of, and competition for, capital – with the emergence of shale gas, where investment tranches are smaller in size and shorter in tenor, with increased
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