Big challenges like the drive to reduce greenhouse-gas emissions need big solutions. While technology can help the industry answer the challenge, change won’t happen overnight.
Speaking during the “Oil and Gas Perspectives of the Energy Transition” plenary session at SPE’s Energy Transition Symposium on 12 August, Doug Conquest, vice president of sequestration project development for 1PointFive, said sometimes it’s important to choose to move forward on a project even if available technology is “not optimal.”
Typically, the confidence in technology “has to be high” to minimize risk, he said. But the world has “a clock on us because of the amount of greenhouse gases in the atmosphere.” In that situation, he said, the question becomes one of whether to wait for technology to be developed, or to move now regardless of the state of technology.
“There's a value moving today,” he said, adding that “when you have a big problem like global greenhouse gases in the atmosphere, you have that big solution.”
Big solutions don't come from pilot projects, Conquest said, so companies must decide, “What's the value of doing nothing versus the value of developing something” that later technology will overtake?
Rob Wingo, EQT’s executive vice president of midstream, compared development on energy transition technologies to “the Manhattan Project on steroids.” He said it seems like nearly daily there’s a new technology on offer from someone who wants investments or a pilot project.
“There's different types of technology risk,” he said. “When you're building a project, a lot of the stuff that we're looking at, you've got the individual technology risk, right? But you also have the risk of all of these new technologies working together as a system, and that's a big risk.”
David Reid, NOV’s chief technology officer, said there are many promising energy transition technologies available, but questions remain around scalability and cost. One of the biggest challenges around renewables, he said, is cost.
“Lots of the renewables companies are just on that journey to going away financially,” he said.
In renewables, he said, the questions might be, “Who's making money, where's the money? The answer is, there is no money. There's just people trying to answer a problem,” often subsidized by the government.
Incentives and stable policy are important factors in giving companies the confidence they need to make plans for the long term, Conquest said. So are, he added, ways to be sure there will be revenue related to projects.
“The product price is not really there,” for carbon for many industries, he said. “You need to have policies to support in terms of incentive, or a stick to force the industry to be creative.”
As the industry works to solve global emissions issues, Reid said, it makes sense to “do all of the above until we have a good solution. I don't know what it is yet, but I do know the pursuit is important.”
Reid called carbon capture and sequestration (CCS) “probably the most honest solution” to the world’s emissions problem.
Conquest said one key to success for CCS and carbon capture, utilization, and sequestration (CCUS) projects revolves around community acceptance. 1PointFive, a direct air capture company formed by Oxy Low Carbon Ventures and Rusheen Capital Management, is working on the Stratos DAC facility expected to begin operations in 2025 in the Permian Basin.
He said community education can help people understand the global benefits of such projects.
“The ability to work with those communities and understand how we are as an industry, a good neighbor, and we equitably share the benefits of those projects,” Conquest said.
Being a good neighbor and winning over the community aren’t the only hurdles to getting major projects going. Permitting can be a major headache.
Wingo said lack of policy creates uncertainty for companies like EQT that want to pursue risky, large projects.
“Having that type of uncertainty makes it very difficult to get projects off the ground,” he said. “We've got to work with the regulatory agencies to define their processes, define how they are going to approve permits. Make sure that the federal and state laws are clear and easy to understand, and don't have loopholes in them that can be abused.”
Beyond that, he said, it’s important to make sure agencies are appropriately staffed to process permit requests.
“That's a big issue right now,” Wingo said, citing as an example a backlog at the Environmental Protection Agency for action on Class VI permits for wells used for geologic sequestration of carbon dioxide. “It’s taking longer now than it otherwise would.”
