AD­DING VALUE

Gas has the big fu­ture it de­serves, not just the tran­si­tion fuel for a lower car­bon world, but as a des­ti­na­tion fuel for many, many decades to come. Ex­cerpts of the speech by Bernard Looney, BP chief ex­ec­u­tive, Up­stream at World Gas Con­fer­ence, Wash­ing­ton

Oil and Gas - - EXPERT SPEAK -

There is a sig­nif­i­cant con­stituency around the world that be­lieves gas is part of the past, not the fu­ture – part of the prob­lem, not the so­lu­tion. That’s an is­sue be­cause the low car­bon tran­si­tion we are on is tough enough al­ready.

By 2040, the world will need around a third more en­ergy than it does to­day – but it also needs emis­sions from that en­ergy to come down by around half.

That’s a tough chal­lenge – a dual chal­lenge:

• A third more en­ergy

• Half the emis­sions.

That’s why gas is so im­por­tant. To meet that chal­lenge in any re­al­is­tic, prag­matic way you need more gas in the fuel mix.

I’m sure we all know that, but not ev­ery­one agrees. The op­pos­ing ar­gu­ment goes like this: nat­u­ral gas is a hy­dro­car­bon. It is also mainly meth­ane and meth­ane in the at­mos­phere is a po­tent green­house gas – much more po­tent than CO2. That’s an

over­sim­pli­fi­ca­tion — it also misses what I be­lieve is the big point. Be­cause it doesn’t take ac­count of how gas – used in place of coal in power – has mas­sively brought emis­sions down here in the

US, and even more dra­mat­i­cally in the UK. There’s a pa­per re­cently pub­lished the highly re­spected jour­nal, Na­ture. It re­ports the im­pact that switch­ing to gas has had on power gen­er­a­tion in the UK. Gas is the main rea­son car­bon in­ten­sity in the sec­tor has come down by 47% in five years.

So there is much more to the ar­gu­ment than meth­ane. But we have to ad­dress the meth­ane is­sue. We have to make our case – the case for gas – re­ally sim­ple and com­pelling. If we’re go­ing to keep the lights on, if the world is go­ing to keep mov­ing, if bil­lions of peo­ple in poverty or on low in­comes are go­ing to get a bet­ter qual­ity of life. Then the ar­gu­ment for gas needs to be won.

That is why meth­ane is such an im­por­tant is­sue. Ev­ery meth­ane mol­e­cule we can keep in the pipe, helps keep at­mo­spheric con­cen­tra­tions down (and helps to re­in­force the ar­gu­ment for nat­u­ral gas). In­ci­den­tally, ev­ery mol­e­cule that stays in the pipe is also a mol­e­cule you can sell. So con­tain­ing meth­ane is good for busi­ness as well as good for the en­vi­ron­ment. We are re­ally fo­cused on the is­sue in BP – work­ing in­side the busi­ness and work­ing in col­lab­o­ra­tion with oth­ers across the in­dus­try.

We are one of the 10 com­pa­nies in the Oil and Gas Cli­mate Ini­tia­tive, which is pri­ori­tis­ing meth­ane. And we are sig­na­to­ries to the Meth­ane Guid­ing Prin­ci­ples drawn up by a coali­tion of pro­duc­ers, in­ter­na­tional gas bod­ies, NGOs and aca­demics – de­vel­op­ing best prac­tices on meth­ane emis­sions re­duc­tion. In our own op­er­a­tions, we are up­grad­ing our fa­cil­i­ties and our tech­niques to min­imise meth­ane emis­sions.

Just to give you some ex­am­ples of that, here in the US:

• We used to have around 10,000 high­bleed pneu­matic con­trollers across 5 mil­lion acres of our on­shore gas busi­ness, from Texas to the Rock­ies.

• We have had a ma­jor pro­gramme run­ning to up­grade them and we are down to the last 145.

Our ground op­er­a­tions are be­ing scanned by meth­ane-de­tect­ing cam­eras we have got drones in the air pin­point­ing leaks and we are look­ing at meth­ane mea­sure­ment from space us­ing satel­lites. We are also look­ing at how we de­sign out meth­ane emis­sions in new projects. In Oman, we built a sin­gle cen­tral pro­cess­ing fa­cil­ity out in the desert, re­mov­ing the need for pro­cess­ing equip­ment on hun­dreds of in­di­vid­ual wells. In Azer­bai­jan, we are pi­lot­ing new tech­nol­ogy for mon­i­tor­ing meth­ane at our newly ex­tended San­gachal fa­cil­ity – part of the gi­ant Shah Deniz 2 project. Two months ago, front­line lead­ers in our Up­stream busi­ness gath­ered for a work­shop, bring­ing to­gether our in-house meth­ane ex­perts and ex­perts from Prince­ton Univer­sity, where some of the world’s lead­ing re­search is done. We iden­ti­fied a list of nearly a hun­dred ac­tions we can take – in ad­di­tion to all the ac­tiv­ity un­der­way al­ready. All those ac­tions to­gether are de­signed to keep our global meth­ane in­ten­sity at 0.2%, which is where it is to­day. That 0.2% fig­ure is re­ally sig­nif­i­cant. It’s been de­scribed as strin­gent by the En­vi­ron­men­tal De­fense Fund and in­cred­i­bly rig­or­ous by Pro­fes­sor Steve Pa­cala, a lead­ing cli­mate sci­en­tist at Prince­ton. The Na­ture Con­ser­vancy also say it’s a good step. For me, it is a key plank in win­ning the ar­gu­ment for gas. And if we win the ar­gu­ment, gas has the big fu­ture it de­serves, not just the tran­si­tion fuel for a lower car­bon world, but as a des­ti­na­tion fuel for many, many decades to come.

In­ci­den­tally, ev­ery mol­e­cule that stays in the pipe is also a mol­e­cule you can sell. So con­tain­ing meth­ane is good for busi­ness as well as good for the en­vi­ron­ment.

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