(WO) — One of the most interesting and thoughtful panel discussions last week at the Schlumberger Digital Forum in Lucerne, Switzerland, focused on the energy transition. The discussion about what should be done and how to do it, as well as who should lead the way, was wide-ranging.
Vicki Hollub, President and CEO of Occidental Petroleum
Panelists included Occidental Petroleum President and CEO Vicki Hollub, OGCI Climate Investments CEO Dr. Pratima Rangarajan, and Schlumberger Strategy and Sustainability Director Dr. Katharina Beumelberg.
Industry’s role in the transition. Asked about the role the oil and gas industry should play in driving the energy transition, Oxy’s Hollub had clear and precise ideas. “I would say our industry is uniquely positioned to lead the energy transition,” Hollub said. “The reality is that we can’t have a transition without oil and gas, and sometimes we like to say that’s really an add-on. It is an addition of additional means to supply energy. But oil and gas will be with us for a long, long time. »
The CEO of Oxy further explained that CCUS is another reason why the industry is leading the transition. “We are the industry that manages the most gas for the industry, that manages the most CO2 and we are the industry that can actually drill the wells to bring the CO2 underground in order to sequester it or use it. in oil and gas reservoirs. So I think we’re part of the solution. The other aspect is that we’re an industry that’s always been able to innovate to solve problems. And I believe that in the next five or ten years, there will be such an increase in the level of innovation in our industry, I think, that it will exceed anything we have seen before.
Use of carbon monoxide2. Asked by the panel moderator how she should explain the concept of net zero oil to her climate-conscious daughter, Hollub provided an excellent, albeit lengthy argument/explanation. “It’s a concept that if the world doesn’t understand [it]then there won’t be a just energy transition, because we won’t be able to afford [it]. So the concept is, and the way it works, imagine you have a granite countertop and you’re in your kitchen, and your husband is spilling red wine. It goes on the counter, and if it’s not sealed, every wine line is going to stain and it’s going to stay there. And these are very small marble pores. This is exactly how CO2 sequestration works in a tank. So instead of putting what we think of as a commodity – the CO2—in a saline tank, where you never get any extra benefit from it, we should put CO2 in all the oil reservoirs in the world where we can introduce it. Because, if you do that, it produces extra oil that comes from residual oil left in the ground that you can’t get by natural means or by pumping water.
“In conventional reservoirs,” Hollub continued, “typically you only get 15 to 20 percent of the oil underground, and in shale reservoirs it’s only 10 percent. So we leave between 70, 80 or 90% of the oil in the ground If we inject CO2 in that reservoir, in those little micropores where the oil molecules are that cannot be moved by water, the CO2 will become immiscible. And for those oil molecules, it makes each molecule bigger and makes it less viscous and pushes it out of that little micropore. Then CO2 enters this micropore. This is how you get extra oil with CO2— the oil is then pushed to a production well and produced. It is net zero or net negative oil, because it takes more CO2 injected into the tank than what the barrels produced from this injection will emit when used. If the world understands this, it means that every possible reservoir of oil must be produced with CO2 enhanced oil recovery. The last barrel of oil produced in the world is expected to come from CO2 enhanced oil recovery.”
SLB Digital Forum Day One, second panel (Hollub, Rangarajan and Beumelberg)
From an investment perspective. Meanwhile, the moderator asked OGCI’s Rangarajan from a more investment angle, how she assesses the industry’s ability to drive the energy transition. “If you think about human development in energy, it’s an almost linear progression for the early stages of energy,” Rangarajan said. “It’s only in the West, where we have enough energy to plateau, and we’re using more than our fair share. So for the rest of the world, it’s absolutely critical. This transition is everyone’s transition. It’s not just about the energy industry. And frankly, the message we should be sharing is that everyone should get involved and make sure this industry takes a leadership position, not pushes us away.
Rangarajan said the second fact that came up earlier in the Forum, which she thinks is very important, is that the role of different energy sources has not changed. “Oil and gas is still 40%,” she analyzed. “Coal is still 40%. Renewables still make up less than 10% of the energy mix, and that’s only because we continue to increase our consumption and demand. If we really want to get out of this ratio, it is clear that we must at least modify the signals of demand, which we have talked about. But I don’t think it’s credible to get to net zero without changing demand signals, however unpopular it may be for those of us in the West.
The OGCI executive then mentioned a third factor, which has to do with other sectors of the global economy. “The other sectors are downstream from the energy sectors,” Rangarajan proposed. “And they need energy to produce, whether it’s cement, iron, steel, or all of the above. But keep in mind that if you do that, for steel or cement, which together are responsible for 15% of carbon dioxide emissions, equivalent, only half of their emissions come from energy. The rest comes from the process. This is because we live in a carbon world. So all of these industries, none has innovated as much as the energy industry. So I think it’s imperative that this industry take a leadership position, not just to lead the industry itself, but to lead the way for other sectors that haven’t been as innovative.
Bring it all together. The moderator referred to the “energy trilemma” of keeping energy affordable and sustainable, while making it green and decarbonized, and, at the same time, ensuring that it is reliable and secure. She asked Schlumberger’s Beumelberg how to do all of this simultaneously. “I have to say that I was very impressed with how [Saudi Aramco President and CEO] Amin Nasser spoke about it because I think it was absolutely right and paved the way for the reliability and affordability that we all want and need for growth, for the development of our planet “said Beumelberg. “In fact, we need oil and gas, and we need to make sure we decarbonize it. And for this discussion, this decarbonization, we need industry-relevant investments. And then on the other side, to make the industry more sustainable, we actually, as you said, need to invest in invention as well.
Beumelberg acknowledged that the oil and gas industry has many strengths to satisfy the trilemma. “In addition, we have a lot of long-term experience, capabilities and knowledge that the industry has accumulated,” she said. “We can use it to really scale the kind of new energy system that’s coming alongside the oil and gas industry, and that will help decarbonize our energy supply, overall. And I think that’s something we really need, like Vicki [Hollub] developed, where we have to rely on the underground know-how we have and the enormous digital know-how. This will allow us to scale these technologies much faster globally, and it will help the transition.