The chang­ing face of en­ergy

ENOC CEO H.E. Saif Hu­maid Al Falasi ex­plains what na­tional oil com­pa­nies must do to achieve sus­tain­abil­ity and na­tional agenda goals

Gulf Business - - CONTENTS - H.E. Saif Hu­maid Al Falasi is CEO of ENOC

Glob­ally, the move to­wards low car­bon economies and non-car­bon emit­ting sources has trans­formed so­cial and politi­cal dis­course. Across the value chain, na­tional and in­ter­na­tional pol­icy de­vel­op­ments and com­mit­ments are trans­form­ing how we think about nat­u­ral re­sources and our per­sonal con­sump­tion.

In the UAE, mil­lions sit com­fort­ably in their cars and wait un­til they’re full of gas and cof­fee is served – ser­vice par ex­cel­lence. Yet, be­hind the scenes, pro­cess­ing and dis­tri­bu­tion is a rapidly evolv­ing in­dus­try that is in­creas­ingly com­plex, reg­u­lated and de­mand­ing. Th­ese de­mands come at the same time as an ever-greater need to en­sure en­ergy se­cu­rity for the coun­try in the long term.

In the United States, pol­icy mak­ers moved quickly af­ter the dis­cov­ery of huge shale de­posits, li­cens­ing the com­mer­cial pro­duc­tion of shale gas. It is the only coun­try in the world cur­rently do­ing so. Tech­no­log­i­cal break­throughs en­abled US up­stream com­pa­nies to make in­cred­i­ble ad­vances in ex­plo­ration and pro­duc­tion. The shale rev­o­lu­tion in North Amer­ica now means the coun­try will be self-suf­fi­cient for 100 years, ac­cord­ing to the US Depart­ment of En­ergy. Gas also emits only half of the CO2 of coal. In the oil-rich Gulf, the eco­nomic land­scape is en­tirely dif­fer­ent, yet the chal­lenges re­main sim­i­lar.

Achiev­ing en­ergy se­cu­rity while re­tain­ing ro­bust eco­nomic growth and creat­ing jobs for an in­creas­ingly young pop­u­la­tion is a chal­lenge for most Gulf na­tions. Yet it is the im­por­tance of achiev­ing th­ese goals, while also striv­ing for a more di­verse nonoil econ­omy that has fo­cused the minds of UAE pol­icy-mak­ers and turned the coun­try into one of the most ad­vanced clean en­ergy in­vestors in the world.

Na­tional oil com­pa­nies (NOCs) have in­vested in in­no­va­tive tech­nolo­gies in the re­fin­ing, pro­cess­ing and dis­tri­bu­tion of en­ergy prod­ucts that fuel fast-paced cities in the UAE. While the fore­court ex­pe­ri­ence that mil­lions of peo­ple en­joy when they drive in to re­fuel their ve­hi­cles re­mains ex­em­plary, NOCs are also evolv­ing how they op­er­ate be­hind the scenes.

‘De­mand side man­age­ment’ must be at the heart of Na­tional Oil Com­pa­nies to drive to­wards the sus­tain­able, clean use of the coun­try’s en­ergy re­sources. Part of this strat­egy should be to push the agenda on en­ergy ef­fi­ciency and re­source man­age­ment through which com­pa­nies will be able to de­velop ways to re­duce en­ergy de­mand and their car­bon foot­print.

Other en­ergy ef­fi­ciency ini­tia­tives could in­clude the use of ad­di­tives for un­leaded gaso­line that al­low for cleaner com­bus­tion and lower emis­sions. A case in point is where ENOC pro­cesses ad­di­tives at its wholly-owned MTBE pro­cess­ing plant, which de­liv­ers a highly cost-ef­fec­tive and un­in­ter­rupted sup­ply of feed­stock for the com­pany’s Jebel Ali re­fin­ery (the first to be es­tab­lished in Dubai in 1999). The re­fin­ery is now un­der­go­ing a 50 per cent ex­pan­sion project – an in­vest­ment in the re­gion of $1bn – that will man­u­fac­ture prod­ucts for the lo­cal mar­ket meet­ing strin­gent Euro 5 stan­dards for clean emis­sions.

For the UAE, in­vest­ments in cleaner and more ef­fi­cient pro­cess­ing must be matched with the need to meet in­creas­ing de­mand right across the value chain – in­clud­ing jet fuel. Global trade and Dubai’s bil­lion­dol­lar tourist in­dus­try rely on the de­liv­ery of ef­fi­cient, clean and de­pend­able jet fuel pro­vided by its NOC and other sup­pli­ers.

It’s ev­i­dent that en­ergy se­cu­rity is crit­i­cal to al­most every as­pect of eco­nomic ac­tiv­ity. It is there­fore in­cum­bent on oil ma­jors and fuel providers to in­vest in their own in­fra­struc­ture to sup­port the coun­try’s growth. For the long-term, en­ergy in­de­pen­dence that is truly sus­tain­able means ag­gres­sively di­ver­si­fy­ing the en­ergy mix and re­in­forc­ing our in­fra­struc­ture.

The UAE’s three-point na­tional strat­egy aims to re­duce re­liance on fos­sil fu­els, abate car­bon out­put through the use of al­ter­na­tive en­ergy; and en­hance se­cu­rity for the UAE and wider re­gion. Achiev­ing this re­quires the pro­mo­tion of a range of en­vi­ron­men­tal strate­gies to mul­ti­ple stake­hold­ers, in­clud­ing cus­tomers. Th­ese in­clude the adop­tion of waste re­duc­tion and re-use strate­gies to con­serve re­sources and pro­mote a cul­ture of en­vi­ron­men­tal re­spon­si­bil­ity and ac­tion.

Map­ping out a sus­tain­able fu­ture that sup­ports eco­nomic and per­sonal am­bi­tion, as well as en­sures en­ergy se­cu­rity for gen­er­a­tions to come, is a re­spon­si­bil­ity that rests upon the shoul­ders of the world’s gov­ern­ments and in­dus­trial com­pa­nies.

Achiev­ing th­ese goals with low-car­bon tech­nolo­gies is the world’s chal­lenge, and while the chal­lenge is sig­nif­i­cant, in­vest­ment in ad­vanced tech­nolo­gies, es­tab­lish­ing en­ergy ef­fi­ciency poli­cies and in­creas­ing the use of clean ve­hi­cles are prac­ti­cal mea­sures that are al­ready within our reach.

Col­lab­o­ra­tion be­tween in­dus­try, govern­ment and academia is be­com­ing in­creas­ingly im­por­tant for us to be able to achieve na­tional agenda goals and se­cure the fu­ture for the next gen­er­a­tion.

THE UAE’S THREE-POINT NA­TIONAL STRAT­EGY AIMS TO RE­DUCE RE­LIANCE ON FOS­SIL FU­ELS, ABATE CAR­BON OUT­PUT THROUGH THE USE OF AL­TER­NA­TIVE EN­ERGY; AND EN­HANCE SE­CU­RITY FOR THE UAE AND WIDER RE­GION.

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