Barry Blacklock, EnergiesNet
During the Opening Ceremony of the 24th World Petroleum Congress on September 17, 2023, Pedro Miras, President of WPC Energy, made the official announcement of the organization’s rebranding from the World Petroleum Council.
WPC Energy’s commitment to leading the global transition to a low-carbon energy system was demonstrated during the congress over the next four days. Delegates were bombarded with information during over 150 plenary, strategic, and technical sessions related to policy, technologies, and other aspects of the global transition to net zero.
There were constant reminders during the congress that 54% of the world’s energy still comes from oil and gas. Although there has been a growing demand in developed countries for clean energy, it cannot be satisfied by sacrificing affordability, safety, and security.
“Scary as Hell”
The transition may be the most exciting opportunity in decades; however, it is also “scary as hell,” to quote Bryan Helfenbaum, Senior Vice President of Alberta Innovates, moderator of an excellent panel discussion on Net Zero Energy Systems.
He and his panelists stressed that net zero objectives are driven by technology and innovation and can only be achieved using diverse energy sources. Hydrogen has a serious role to play, as do Small Modular Nuclear Reactors. A concern they shared was that current analytical models often don’t work because the assumptions they are based on are wrong.
Helfenbaum said that it is generally believed that CO2 capture is necessary to get to net zero. He said direct air capture is the closest thing to a silver bullet, although it is unlikely to be commercial for 10 to 15 years and is perceived to be risky for investors.
The panelists agreed that the biggest adversaries to the transition to net zero include the lack of comprehensive industrial policy, the timeline of necessary change, the speed of global momentum, the lack of consensus in the population, and cultures that resist change.
They further agreed that the Canadian energy sector needs to focus on helping the whole world to transition.
Will Some Be Left Behind?
Much of the content during strategic and technical sessions was Canada-centric, including discussions on the rights of Canadian First Nations and their participation in energy projects. The reality of how quickly international indigenous peoples and developing countries could be left behind during the transition was made clear during Friday’s plenary “Managing the Energy Transition Responsibly.”
Speakers Omar Farouk Ibrahim, Secretary General at the African Petroleum Producers Organisation (APPO) and Anibor Kragha, Executive Secretary at the African Refiners and Distributors Association (ARDA), made a series of critical points, emphasizing that Africa is composed of 54 countries, each with distinct cultures and needs.
They are not opposed to the transition nor questioning that climate change is real; however, they disagree with the direction and speed of the process being imposed on Africa by advanced countries.
They argue that only 2.73% of today’s global emissions are from Africa, with the bulk coming from the European Union, North America and Asia. Therefore, the same metrics on energy transition cannot be applied to developed countries and poorer nations in Africa.
In stark contrast to developed countries, 800 million people in Africa do not have access to basic modern energy. They still use coal, wood, and other biomass to provide the minimum energy needed to survive. Air is dirty in congested areas, causing severe respiratory problems, with many people dying daily from chronic inhalation of toxic fumes, including women who are being slowly poisoned while cooking.
They stressed that to support the energy transition, Africa needs a unique plan that is designed by Africans for Africans. They contend that Africa does not require renewable energy sources like green hydrogen right now. It needs cleaner transport and liquefied petroleum gas so that citizens on the continent have the means to cook their food. To develop food security, it needs to improve its agricultural sector, requiring fertilizer, which it could produce from domestic natural gas.
They also contend that reducing consumption by advanced economies by 10 to 15% would allow developing countries to supply their energy needs from fossil fuels. For people in developed countries, it amounts to sacrificing a little comfort. For a high proportion of the population of the Global South, it could resolve an existential concern.
What About Latin America?
The observations and concerns expressed by the African speakers can be applied to most countries in Latin America, where abruptly ending the use of fossil fuels would be cost-prohibitive, economically and socially.
Social and climate activists argue that, traditionally, investors have developed oil and gas projects in developing countries, taking the production and profits away. The combustion of that oil and gas has fuelled the development of the industrial world while simultaneously pouring gigatons of emissions into the atmosphere for more than 150 years.
Latin America, like Africa, needs collaboration from developed countries to monetize its resources and add value within the region to create economies that can support their growing populations. One part of that strategy could be establishing centres of excellence across both continents to develop the expertise required to evaluate each region’s technological needs and identify and apply solutions.
Brazil’s environment minister, Marina Silva, recently told the United Nations’ Climate Ambition Summit in New York that she has issued a revised set of climate goals to cut the country’s emissions by 48% by 2025 and 53% by 2030, compared with 2005 levels. In the meantime, Petrobras will continue to produce oil and gas while it develops renewable energy projects.
President Petro of Colombia is taking a more aggressive approach, signalling that he is ready to kill the country’s oil and gas industry as quickly as possible. Most other Latin American countries intend to transition to net zero by 2050.
The elephant in the room is Venezuela, where it will be necessary to reactivate the country’s oil and gas industry, its only significant revenue-producing sector, to rebuild the Venezuelan economy. If and when that becomes possible, it is hoped that the most climate-friendly technologies will be utilized to eliminate emissions during the renewed oil and gas production.
Closing Remarks and Observations
Some of the following comments, but not all, paraphrase the closing remarks of Pedro Miras during the Closing Ceremony:
- Financing the transition is a significant global concern. The aforementioned African speakers complained that Africa is supposed to get $100 billion annually, but initial commitments have not been paid. Often, money that is available in the short term comes with unacceptable conditions.
- Miras said ESG needs to evolve. It is going the same way as Corporate Social Responsibility, possibly representing a missed opportunity to use it properly to incentivize investment in transition technologies.
- Climate justice is an ongoing issue that the developed world will continue to face in negotiations with the developing world.
- A rapidly growing global industry is developing innovative technologies to deal with various aspects of climate change, from generating energy from renewable, sustainable sources to reducing methane gas emissions.
- No one size fits all. Local expertise is required to define the needs of distinct geographic areas within more significant regions on each continent and to design and apply appropriate solutions.
- The global oil and gas industry has accepted the challenge of being part of the solution and needs to continue doing its part.
- It is exciting to envision the progress that will be made between now and the 25th World Petroleum Congress in Riyadh, Saudi Arabia, in 2026.
Energiesnet.com 09 25 2023