As climate catastrophes increase, conference focuses on renewables
The energy transition is well underway at the Offshore Technology Conference in Houston, and everyone in the fossil fuel industry should pay attention.
Following the cancellation of last year’s OTC due to the COVID-19 pandemic, the four-day conference of energy suppliers, producers and supporters will be much smaller. Fewer panels, fewer technical discussions and, more than likely, fewer people.
Consider OTC’s shrinkage a bell
wether for the entire fossil fuel industry.
The summer of 2021 is proving climactically catastrophic, bringing home to people around the world the reality of climate change. From forest fires in the Pacific Northwest to flooding in Germany to downpours in China and a heatwave in England, the crows of profligate fossil fuel consumption are coming home to roost.
The world can no longer burn as much oil and natural gas as it once did and not expect to make life on Earth miserable. Sure, we can capture carbon, and yes, the energy transition will take time. But we must phase out fossil fuels, which necessarily means fewer offshore rigs and less work for the industry.
RBN Energy, an industry consulting firm, notes that between the pandemic and the most active hurricane season on record, oil and gas production in the Gulf of Mexico ebbed to the lowest levels since 2016 with an average 1.65 million barrels a day, 13 percent less than in 2019.
This year and next should show significant growth, with several new projects producing first oil, RBN notes. Royal Dutch Shell also announced plans to move ahead with the Whale deepwater development, which is expected to produce 100,000 barrels a day. Exxon Mobil is expanding off Guyana.
Exploration, though, is down. Most of the new wells in recent years are tied to existing fields. Talk of drilling in the ultra-deepwater has faded. Big offshore projects need 30 or more years to pay off, and the world appears committed to reaching net-zero carbon emissions by 2050. Do the math.
Most oil analysts predict oil demand will peak by 2035. Climate scientists say we should reach peak consumption as soon as possible. Either way, we will need a lot fewer offshore wells.
OTC 2021 is consolidating to find efficiencies, another good example to follow. For the first time, OTC will coincide with the annual National Association of Petroleum Engineers Summit to create what they call a “Synergy in Energy” partnership.
“Globally, the energy industry has been called upon to meet the dual challenges of addressing climate change and meeting growing energy demand,” said Cindy Yeilding, chair of the OTC Board of Directors. “The ‘Synergy in Energy’ partnership represents a significant opportunity for policymakers, business leaders and industry experts to come together to address these challenges and find solutions to continue safely and efficiently powering the world.”
Note her focus on producing energy, not fossil fuels. Every international oil and gas conference these days focuses on the global transition to low-carbon energy and a net-zero carbon emission future. Folks in the oil patch must take notice.
OTC 2019 was the first year I saw a significant renewable energy presence. This year, offshore wind takes center stage, literally.
Sunday’s “Offshore Wind: Supporting a Growing Industry” panel includes Shell’s general manager for offshore wind, the head of wind permitting for Equinor, the Norwegian oil company, and a project manager from Orsted, Denmark’s former state-owned oil company that has transitioned into 100 percent renewable energy.
The next day, the afternoon’s keynote panel is titled: “Bringing Offshore Wind to Scale: Offshore Energy at the Heart of the Transition.” Panelists from Shell, TotalEnergies and many other organizations will discuss how to make money constructing wind farms off the U.S. coast.
“There’s never been a more exciting time for offshore wind in the U.S. After years of permitting delays, the industry is poised to take off,” the panel’s description says. “Compatibilities between offshore wind and oil and gas sectors are resulting in companies’ activities to diversify services and investments and share expertise.”
European oil and gas companies see the writing on the wall, and they are adjusting their organizations and business plans to give customers what they want: clean energy.
The men and women who work in the Gulf of Mexico understand how to build offshore structures and string together underwater systems better than any other workforce. A network of offshore wind projects along the Gulf Coast can meet our energy needs, even during the summer heat or a winter freeze.
The energy transition will not be easy, but that’s why we have an Offshore Technology Conference. The goal is not to pump oil but to produce energy in the most sustainable and reliable form possible.