The energy transition is a pathway to achieve net zero by transforming the energy sector into one that is low-carbon while maintaining energy sustainability and security—increasing and utilizing the demand for oil and gas throughout the transition while reducing greenhouse gas emissions.
Challenges of the Oil and Gas Industry in Energy Transition
The oil and gas industry is facing challenges to produce energy economically and sustainably as policymakers seek emissions reductions through carbon pricing and trading. According to the International Energy Agency (IEA), the transition of oil and gas should consider three main focus levers:
♦ Rising demand for energy due to a growing global population
♦ Affordable and reliable supplies of liquid and gas, since the industry plays a critical role in economic systems
♦ Reducing the energy emissions contribution in line with the decarbonization movement to achieve net-zero emissions.
Recommendations for the Oil and Gas Industry
According to the Atlantic Council Global Energy Center, recommended steps to support and lead the transition movement in the oil and gas industry include:
• Develop strategies for decarbonization to reduce emissions and ensure profitability
• Support policy development of clear objectives for investors
• Invest in promising projects, technologies, etc., that support achieving net zero
• Implement approaches to transition oil and gas products to low-carbon products like hydrogen (H2).
Oil and Gas Energy Transition Pathways
Pathways in the energy transition that the oil and gas industry is embarking on include:
1. Energy efficiency
2. Hydrogen system
3. Carbon capture, use, and storage (CCUS)
4. Low-carbon fuels
The energy efficiency lever can play a role in reducing emissions and enhancing energy in the power sector. Hydrocarbon facilities have a chance to utilize and convert oil and gas sources to hydrogen – a clean product – but must capture CO2 sources to achieve blue H2. The captured #CO2 sources from hydrocarbon facilities or the air can be collected in a hub to be directly used in the cement and concrete industries – just one potential opportunity to utilize captured CO2 – or stored directly underground with specific geological formations.
This article is contributed by Sonia Isabella López Kovács – Reservoir Engineer Advisor at Repsol.