Last week in Aberdeen, the 50th iteration of the Offshore Europe conference began with Kamel Ben Naceur, Chief Economist at ADNOC, warning against large increases in taxation for the oil and gas sector, arguing that it would be unwise to reduce oil and gas exploration, and praising the UK government’s recent decision to grant hundreds of new North Sea oil and gas licences.

Meanwhile, Graham Stuart, UK Minister for Energy Security and Net Zero in the UK government’s Department for Energy Security and Net Zero (DESNZ), confirmed that his government ‘firmly believes that UK oil and gas is part of the solution not the problem’ as domestically produced gas is around ‘four times cleaner than imported LNG’ – overlooking the fact that the rather larger Scope 3 emissions are the same, regardless of where gas is produced.

Both men emphasised the importance of CCUS for the energy transition. The ADNOC economist said that there is ‘the prospect for 100mn tonnes of CO₂ to be stored globally by 2030’. He called for greater collaboration to increase that figure by the three orders of magnitude needed for net zero emissions, according to many scenarios. Similarly, Stuart stated that: ‘Without CCUS, there will be no net zero. And its traditional oil and gas companies who will deliver this.’

Overall, Stuart’s speech had a nostalgic tone as he reminisced about the time when fossil fuel production in the North Sea helped restore the UK’s energy security, drive down prices and stimulate the economy in response to the 1973 oil crisis. The comparison with today was obvious, though of course the current energy trilemma is substantially different than the 1973 crisis; and it certainly cannot be solved with more fossil fuels and CCUS alone.

Even with regards to energy security, more North Sea production will not help improve the situation in the UK as the vast majority of oil and gas is sold on the international market.

Audience members during Offshore Europe 2023
Photo: Offshore Europe 2023

CCUS – silver bullet or waste disposal? 
Some of the other speakers supported the assertions of Stuart and Ben Naucer concerning the promise of CCUS; others were less optimistic. Daniel Carter, President of Decarbonisation at Wood, declared: ‘CCUS is key to decarbonising the energy infrastructure we have today – which billions of dollars has been invested into.’

Steve Nicol, Executive President of Operations at Wood, mentioned the ‘fantastic facts’ around CCUS, with ‘potential for 50,000 jobs by 2030’. In response to a question about whether the development of renewable energy challenges the traditional oil and gas infrastructure, he said that ‘there are differences… but hydrogen and CCUS need the same kind of infrastructure as hydrocarbons, such as pipelines, lots of specialist technology etc.’

Of course, the true value of CCUS is not in sustaining the world’s fossil fuel infrastructure, its similarity to oil and gas roles, or even in providing jobs – it is in its potential to decarbonise hard-to-abate sectors. But revealingly, it was the panellists of the CCS Projects technical talk who were the most cautious when discussing the current practicality of the technology.

For instance, Elaine Campbell, Subsurface Manager at Soregga, spoke at length about the particular complications of developing a CCUS project due to the multiple stakeholders involved. She said that: ‘Everyone is still learning when it comes to CCUS. There are many questions we have as an industry to answer and work through.’ Finally, she reminded her audience that CCUS is ‘a low margin business… it’s essentially waste disposal’.

Campbell’s co-panellist, Wouter Schiferli, Senior Flow Assurance Engineer in CCUS at EBN, presented on the complications of storing CO₂ in highly depleted gas fields. He discussed how the behaviour of CO₂ is very different to hydrocarbons – for a start, small changes in pressure result in high phasal changes. But ‘pressure will be high, even in shallow wells; and aquifers can vary greatly, meaning that injection philosophy has to be adapted to each aquifer’, he noted.

Schiferli said that although depleted fields appear attractive for storing CO₂, there are many issues. For example, it is better to repurpose an old well than to drill a new one as the latter option is tricky in a depleted reservoir. However, older wells may have corrupted and there is a risk of seismicity. Moreover: ‘Ideally you want wells close to shore so you don’t need to do warm injection as local heating makes the economics unattractive. CO₂ cannot be kept warm over long distances and local heating requires large heaters on platforms – which is costly.’

Left to right: Glenn Brown, EVP Subsurface and Portfolio at Harbour Energy; Dan Carter, President of Clean Energy & Decarbonisation at Wood; Nicola Grieve, Senior Vice President at Aker Solutions; Arne Gürtner, Senior Vice President of UK & Ireland at Equinor; Sian Lloyd Rees, UK MD at Mainstream Renewable Power
Photo: Offshore Europe 2023

What’s needed for the transition? 
CCUS is a potentially vital part of the complicated jigsaw puzzle that makes up the energy transition and it is included in all reputable net zero scenarios. So, what will it take to ensure that CCUS (and other vital technologies such as hydrogen, renewables and storage) are sufficiently scaled to fully decarbonise the energy sector?

Sean Martyn, Managing Director & Head of Baker Hughes Capital Solutions, summed up many panellists’ thoughts on what needs to happen to ensure the UK and Europe reach net zero when he said: ‘It sounds like we’re all saying we need a European IRA [Inflation Reduction Act] – but with a different acronym!’

Or as David Harris, Manager of JIP33 Published Specifications at IOGP, put it: ‘If you look at initial projects for CCUS being proposed, the EU is not doing enough… We need a market mechanism [like the IRA] that gives very clear market signals. The ETS [European Union Emissions Trading System] is somewhat outdated. If the US government can come up with the IRA, and it can have such a clear and obvious impact on big projects, why isn’t the EU doing the same?’

A people problem 
‘The most important thing as we head towards net zero is in the people,’ according to Wood’s Nicol. But many panellists felt that the energy industry, particularly the oil and gas sector, had a problem attracting and retaining the right talent. For example, Christina Horspool, Vice President, Sustainability & Climate Action at X-Academy, said there is ‘a shortage of people due to a number of factors – competition, visibility of roles, fear/confidence, job appeal, skills and experience, retention’.

Approaches to attracting and retaining skilled people varied widely. Terry Allan, Chief Executive Officer of Global E&C, argued that: ‘Future leaders and workforce expect their leaders to be making a meaningful impact on the future of the planet. They have an acute sense of the planet’s health – much more than previous generations did. If we want to attract future talent, we need to make a meaningful shift to genuinely decarbonise our industry and wider.’

Dave Whitehouse, CEO at OEUK, was more brusque: ‘If you want to change the world, this is where you come to do it. If you just want to talk about it, go elsewhere.’

But the altruistic angle was not seen as the priority for some of the other speakers. Sarah Cridland, Vice President of Subsea Projects and Commercial & Country Manager, UK at TechnicFMC, commented: ‘We can give fantastic careers in this industry. You can travel and live abroad, and meet great people, and learn a great deal.’

Indeed, for Cridland and others such as Michael Ziegler, Vice President, People and Transition at TotalEnergies, the solution to attracting and retaining talent is to change the narrative about the oil and gas sector and publicise the perks. ‘Our job is to convince people in and out of the company that there is more to working in oil and gas, more opportunities,’ Ziegler said.

Changing the narrative 
Jenny Stanning, External Relations Director at OEUK, was also in favour of ‘changing the story’ when it comes to oil and gas. Reflecting Graham Stuart’s line that ‘We need to tell the [energy] story so people who don’t care about nuance, screaming in the streets about energy policy, end up directing policy,’ she told her peers to ‘get out there and tell our story, bringing credible facts and data to what is a very emotional debate’ in order to help convince young people to follow a career in the oil and gas sector.

Likewise, in a discussion about getting the public and politicians to trust the industry, Stanning said that ‘politicians… don’t see the community benefits of the industry’ and that changing this ‘comes back to storytelling and how we communicate with policymakers’.

Perhaps young people and politicians would be more trusting of the fossil fuel industry if they saw more tangible evidence of genuine emissions reductions, commitment to net zero strategies, and greater investment into low-carbon solutions than new oil and gas projects? Global E&C’s Terry Allen had made a similar point on the priorities of the next generation of the workforce.

The other side of the coin 
The tone of the Offshore Europe 2023 conference may have been set by the two opening speakers, one from a national oil company, and the other a British Conservative politician. But whilst it’s true that the world will continue to need some oil and gas as late as 2050, ultimately the future of energy was depicted more accurately by the third keynote speaker, Jarand Rystad, CEO of Rystad Energy.

Supported by facts and statistics, Rystad demonstrated that renewable energy will dominate. The demographic of the conference attendees, heavily represented by the UK offshore oil and gas sector, did not prevent Rystad from emphasising that North Sea hydrocarbon production peaked in 2000 with 9% of the global total, and has been in decline ever since (currently at 4%). His predictions showed that by the time we reach net zero, that figure will have fallen even further to just 2%.

‘The North Sea is one of the best locations globally for wind, with 25–30% of the global market predicted. It can replace the whole oil and gas service industry by 2050,’ Rystad said. ‘It is predicted that there will be 300 GW of wind energy produced in the North Sea by 2050, producing much more power than the demand. The surplus can be used to create hydrogen or power oil and gas production in the North Sea.’

Pointing to the power of economics, Rystad emphasised that ‘solar, wind, hydro, biomass and nuclear will push fossil fuels out’ of the energy market. The price of renewable energy sources in comparison with those of the traditional hydrocarbons will ‘take care of shutting down the older energy sources’, predicting that global power installations in 2023 for fossil fuels will be around 185 GW, whereas low-carbon will be at 520 GW. ‘And this will just accelerate based on economic competitiveness,’ he concluded.

Energy efficiency was not a main topic of discussion at Offshore Europe and Rystad was one of the few to compare electrification with fossil fuel-based power. For instance, he reminded the audience that two-thirds of fossil fuel energy ‘is converted to heat losses when used for purposes other than heating, meaning that two-thirds of the energy contained in petrol is wasted when used in a car.’

He pointed out that in Oslo in 2013, electric vehicle (EV) penetration was just 5%; last year EVs accounted for 79% of new passenger car registrations. And this is not limited to small wealthy Scandinavian countries. So far in China in 2023, 36% of all car sales were EVs and Rystad predicted that Chinese petrol demand is likely to peak this year. As the largest global emitter of greenhouse gases (by country though not by capita), developments like this in China are significant. As Rystad put it: ‘We are dependent on China to make the transition. China and the US need to collaborate, or the transition will be delayed.’

‘The North Sea is one of the best locations globally for wind with 25–30% of the global market predicted. It can replace the whole oil and gas service industry by 2050.’ – Jarand Rystad, CEO of Rystad Energy

Nevertheless, the energy transition in the North Sea (and elsewhere) is a massive opportunity for the organisations and companies currently working in traditional energy industries. The International Energy Agency (IEA) has reported that there are already more jobs in renewables than in fossil fuels. As speakers on geothermal energy commented, the skills and expertise of oil and gas are highly pertinent to this growing sector, particularly with regards to drilling. And this applies to CCUS, hydrogen and other low-carbon industries too.

Organisations such as the IEA, the Intergovernmental Panel on Climate Change and the World Health Organisation have all calculated that the world cannot open any more fossil fuel projects without exceeding global warming of 1.5°C above pre-industrial levels. This view, from three of the best-informed international organisations working in this area, should be difficult to ignore.

Reaching net zero is an enormous and convoluted problem, and undoubtedly there are strong arguments from many angles. But we should not forget the fact that, ultimately, tangible reductions in emissions are the only true solution. Tricky technologies such as CCUS would be less important for the transition when we’re not producing so much CO₂ in the first place.