En­ergy driven - Bob Dud­ley, Group chief ex­ec­u­tive, BP

Oil and Gas - - CONTENT - SOURCE: BP Me­dia

The world is on course to need around a third more en­ergy over the next two decades, and most of that is com­ing from de­vel­op­ing economies. Ex­cerpts of the speech by Bob Dud­ley, Group chief ex­ec­u­tive, BP on ‘The big­gest chal­lenges and op­por­tu­ni­ties fac­ing the global gas in­dus­try’ at World Gas Con­fer­ence, Wash­ing­ton DC

Last year, gas ac­counted for the largest source of growth in en­ergy con­sump­tion with pro­duc­tion grow­ing by al­most twice the 10-year aver­age rate. We are liv­ing in re­mark­able times and the con­tri­bu­tion that en­ergy makes to that is of­ten over­looked. Just in the past 30 years, the global pop­u­la­tion has gone from 5 bil­lion to well over 7 bil­lion. We’re liv­ing seven years longer, on aver­age. Global GDP has gone from

un­der $20 tril­lion to well over $70 tril­lion. And ex­treme poverty has been cut in half. All in the space of three decades. And in that same pe­riod of time, global en­ergy con­sump­tion has in­creased by around 80 per cent, and that’s no co­in­ci­dence. En­ergy has been es­sen­tial to hu­man progress. It still is. The world has its chal­lenges, but the big pic­ture is that it’s get­ting bet­ter, not worse. It’s a pat­tern that’s set to con­tinue and en­ergy de­mand will keep go­ing up to sup­port it - up around a third over the next two decades, on re­cent trends. The down­side of that growth is the pres­sure it cre­ates through in­creas­ing green­house gas emis­sions. That’s why gas is go­ing to be more im­por­tant than ever as part of the en­ergy mix. We know that be­cause gas is abun­dant, it’s af­ford­able – and if you use it in­stead of coal for power gen­er­a­tion, you can cut the sec­tor’s car­bon emis­sions by half. That’s im­por­tant, par­tic­u­larly given the uptick in emis­sions we saw in 2017

Here in the US, we’ve seen how switch­ing from coal to gas has re­duced emis­sions lev­els down to those last seen in the 1990s. Over in the UK they’re down to lev­els of the 1890s. In short, gas can sup­port the dual chal­lenge of in­creas­ing en­ergy de­mand while low­er­ing emis­sions. We all know that. But step out­side this room, this con­fer­ence, our in­dus­try – and you get other views. Some peo­ple may not be aware of the ben­e­fits of gas. Oth­ers see the ben­e­fits, but are gen­uinely con­cerned about meth­ane emis­sions. That’s a le­git­i­mate con­cern and we share it – in fact, we’re in ac­tion. Then there is an­other camp in­tent on dis­cred­it­ing gas as an op­tion, even if meth­ane emis­sions are ef­fec­tively con­trolled. That’s un­for­tu­nate as it risks deny­ing the world of one of the key means of de­liv­er­ing the Paris goals – which is sub­sti­tut­ing gas as the pre­ferred fuel into the power sec­tor. We have an obli­ga­tion to counter this view – to make the case for gas in a way that re­moves any doubts about its long term ben­e­fits. And to do that, we need to do two things.

TACK­LING METH­ANE EMIS­SIONS

The first of those is to get ahead of the game on meth­ane emis­sions. When gas is in the pipes or be­ing used ef­fi­ciently, then it’s a great re­source. But that’s not so much the case if it leaks to the at­mos­phere be­fore it’s con­sumed. That’s be­cause nat­u­ral gas is, of course, mostly meth­ane which is a strong green­house gas if it finds its way into at­mos­phere – more po­tent than car­bon diox­ide in the near-term. With that in mind, it’s great to see how much is al­ready hap­pen­ing in com­pa­nies in­di­vid­u­ally and across the in­dus­try col­lec­tively. To­tal, Shell and BP along with 7 other com­pa­nies are part­ners in the Oil and Gas Cli­mate Ini­tia­tive, the OGCI, which has set tack­ling meth­ane emis­sions as a pri­or­ity.

Ex­perts from across the in­dus­try, academia and NGOs have also drawn up a set of Meth­ane Guid­ing Prin­ci­ples to help us pro­mote best prac­tice on meth­ane. That’s just two ex­am­ples of how we can work to­gether to limit meth­ane emis­sions, and there’s a real prize if we can. The more we can lower the in­dus­try’s meth­ane in­ten­sity – that’s the pro­por­tion of emis­sions rel­a­tive to gas pro­duc­tion – the more we re­in­force the en­vi­ron­men­tal ben­e­fits of gas. In BP, we’re aim­ing for a meth­ane in­ten­sity tar­get of 0.2 per cent in our own op­er­a­tions. The Na­ture Con­ser­vancy see it as a good step and it’s been de­scribed as strin­gent and con­struc­tive by the En­vi­ron­men­tal De­fense Fund. Pro­fes­sor Steve Pa­cala, a lead­ing cli­mate sci­en­tist at Prince­ton Univer­sity says it’s in­cred­i­bly rig­or­ous. So it’s a tough tar­get but we’re de­ter­mined to meet it and we’ll share what we learn as we go along.

The sec­ond chal­lenge is help­ing peo­ple recog­nise gas as a des­ti­na­tion fuel, not just a tran­si­tion fuel – one that’s part of a low car­bon fu­ture, not just a fuel for get­ting there. That means win­ning a num­ber of ar­gu­ments.

• For in­vest­ment in in­fra­struc­ture and open mar­kets to cre­ate a more glob­alised mar­ket for gas. • For back­ing in­no­va­tion and tech­nol­ogy to de­car­bonise gas, par­tic­u­larly in car­bon cap­ture and stor­age. • For part­ner­ing gas with re­new­able power,

• And for car­bon pric­ing, which will help to make all of those hap­pen.

To quickly sum up, the world is on course to need around a third more en­ergy over the next two decades, and most of that is com­ing from de­vel­op­ing economies. So as well as be­ing cleaner, the ex­tra en­ergy also needs to be af­ford­able. That’s why gas is a vi­tal fuel for help­ing ad­vance the en­ergy tran­si­tion, and why I be­lieve we should be tak­ing all the steps needed to make the case for its ben­e­fits.

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