“There really has been a change in 2019”. In Europe, “there are indicators of an historic shift in the attitudes and intent of the oil and gas industry” – DNV GL, January 2020.
The new publication, ‘New Directions, Complex Choices’ provides numerous insights into the oil and gas industry, charting changing sentiment over the course of the past year, with quotes from industry figures. Highlights include:
• To resolve the energy conundrum – of how to ensure a secure, affordable supply of decarbonized energy – the industry will need to exploit the synergies between gas and renewables, not choose one or the other.
• Gas remains the quickest way for major economies to displace coal and oil in energy-intensive industry, power generation, and heating. Moreover, until battery technology, hydrogen, and other energy-storage solutions mature, fast-starting gas-fired power plants remain the best way to secure baseload electricity generation to complement intermittent wind and solar. It will deliver further efficiency gains when coupled with CCS, which currently remains an unattractive, costly option in the absence of carbon price movement or similar incentives.
• Globally, 85% of emissions are unpriced and the remaining 15% is mostly priced below US$10/tCO2. The number of carbon pricing initiatives is growing, but any meaningful price increases are set several years into the future.
The economies of scale afforded to wind and solar, made possible by government incentives, must now be applied to and realised in carbon capture, whether it be for storage or utilisation (CCS/CCU). CCS plays a role in virtually every forecast/scenario put forward to date. It will be critical, alongside energy efficiency gains and the expansion of renewables, to achieve our climate goals.
Ref: ‘New Directions, Complex Choices’ at dnv.com