Perspectives on a Lower-Carbon Future Kick Off Inaugural SPE Energy Transition Symposium

Meeting the energy demands of today while advancing a lower-carbon energy future requires policy support, innovative approaches, capital investments, and time.

Reduce CO2 emission concept.
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In today’s era of heightened awareness about the need for decarbonization, it has become increasingly easier to view carbon as the enemy. However, Adam Sieminski, a senior advisor at the King Abdullah Petroleum Studies & Research Center in Riyadh, sees it differently and that there’s a role for the oil and gas industry in a lower-carbon future.

“Carbon is not the enemy; it’s emissions,” Sieminski said during the “O&G Industry Perspectives of the Energy Transition” plenary for the inaugural SPE Energy Transition Symposium held 22–23 August in Houston.

He explained, for example, that while the percentage of coal in the energy mix has decreased, the world is “using more tons of coal than we ever have, and I have a nagging suspicion that we’re going to continue to use more oil and natural gas.”

He views the industry’s role in a lower-carbon future as one of developing the technological solutions and the not-so-technical to manage those emissions.

“We’re going to continue to put carbon dioxide into the atmosphere, then we need ways to capture that,” he said. “There are technological approaches—direct air capture, carbon capture and sequestration, for example—but nature-based solutions can be pretty effective.”

Sieminski shared how along the US Gulf Coast, large areas of mangroves protect the coast and help sequester carbon dioxide. Seaweed, he said, is also an effective way of removing carbon dioxide from the atmosphere.

“How do we do more with ocean-based solutions,” he queried. “We need policies encouraging many approaches to reducing, recycling, reusing, and removing carbon dioxide. The industry has the financial capital, the intellectual capital, and the technological know-how to do this. And that's why I think this industry will be a main solution provider, not a problem.”

Lower Carbon Intensity a Goal
Sieminski echoed comments made by Chevron’s Jeff Gustavson, president of the company’s new energy business, during the symposium’s opening keynote: The industry has a significant opportunity to move in a lower-carbon direction.

“How you do that is by not abandoning your traditional oil and gas business—that would be a bad outcome. It is lowering the carbon intensity associated with those businesses and leaning into the new ones,” said Gustavson.

“There are two areas where the industry leads. One is the strong motivation to move in this direction appropriately and to focus on the right things. The other is our capabilities—the unique skill sets—we have as an industry to move these businesses forward,” he said.

Moving the new energy businesses forward is made more possible through the customer’s increased interest in understanding and accessing lower-carbon products that are reliable and affordable, Gustavson said.

“Energy drives everything. We can use the existing customer base to scale some of these new low-carbon products,” he said, adding that “not every company needs to be involved in every aspect of the energy transition.”

While he views the increased interest and activity in the energy transition as positive, he said that the key for the industry is to be careful about where it can have the biggest impact the fastest.

Chevron, Gustavson said, has a pragmatic view of the energy transition.

“The energy system is massive, and it’s under-appreciated how much investment and time it will take to make the transition. Our strategy balances the three elements: reliable, affordable, and cleaner energy,” he said.

“We continue to grow and support our traditional oil and gas business, lowering the carbon intensity and growing new low-carbon solutions: renewable fuels, CCS, hydrogen, offsets, and an emerging set of businesses such as geothermal.”

Gustavson held off picking a favorite of these solutions but did identify two for their level of maturity.

“Renewable fuels are the most mature. We've invested the most money as a company in that space, and it's the most profitable today,” he said. “I think CCS is probably the next up. This is an existing technology that’s complicated. You need policy support, which will take time to develop, but that feels closer.”

He said hydrogen is probably the biggest of all the new energy businesses but will take the longest to develop and become sustainable without significant policy support.

There’s a significant opportunity to move toward decarbonization, but the industry must remain proactive and thoughtful. Investing in technological- and nature-based solutions while developing technologies like hydrogen will significantly reduce emissions. However, government policies will remain important for the long-term viability of all solutions.

Learn about upcoming SPE events related to the energy transition. The call for papers will soon be open for the new SPE Europe Energy Conference, to be held in June 2024, in Turin, Italy.