Oil companies must step up in energy transition or fail financially: US deputy energy secretary
The world’s top oil and gas companies must embrace the ongoing energy transition and invest in cleaner solutions — and profit as a result — or face financial failure if they stand pat, said US Deputy Energy Secretary David Turk Dec. 6 at the 23rd World Petroleum Congress in Houston.
“I don’t think we’re going to be successful unless major companies step up and are part of solution,” Turk said, noting that some will and some will not. “We cannot delude ourselves.”
In order for the US to meet ambitious net-zero emissions goals by 2050, Turk touted investing in all sorts of solutions from wind and solar to de-carbonizing oil and gas through carbon capture projects and other means, as well as a renewed interest in nuclear power.
“It’s causing people to take a new, fresh look at the nuclear side of things,” Turk said, citing potential modular, fusion and advanced nuclear technologies.
But the bottom line is the bottom line, he said, and much of the necessary technology innovation must be focused on making existing technologies, such as wind and solar, even more affordable.
“We need to innovate; we need to keep pushing those prices down,” Turk said. “It’s simplistic, but sometimes we lose sight of it, and it’s necessary to scale.”
And the US needs transferable technologies worldwide to provide more reliable and affordable energy options, he said.
Making oil and gas cleaner
But the other key is reducing emissions from existing oil and gas operations, refineries and power plants.
“Methane emissions strikes me as one of the biggest no-brainers,” Turk said.
Reducing flaring from oil and gas production, and investing in more carbon capture and storage projects are top priorities.
Turk cited close to $20 billion in the new infrastructure law to invest in carbon capture projects and technologies.
While the CEOs of large integrated companies such as ExxonMobil and Chevron emphasized the need for traditional fossil fuels and for the ongoing transition, they also touted carbon capture and hydrogen projects, including in Houston.
Earlier this year, ExxonMobil said its first major project is a Texas hub to capture and store CO2 emissions from heavy industries around the Houston Ship Channel. It would require $100 billion of investment and aims at capturing 50 million metric tons/year of CO2 by 2030 and twice that amount by 2040.
In November, ExxonMobil targeted shallow-water tracts near Texas in the first offshore lease sale of the Biden administration. The company’s tracts are clustered in the Brazos Area, the Galveston Area and the High Island Area – locations in close proximity to the company’s announced CCS hub.
Houston itself is getting in on the act. Long having touted itself as the “energy capital of the world,” Houston is pushing the phrase, “energy transition capital of the world,” during the World Petroleum Congress.
However, Turk emphasized action is needed more than talk because time is of the essence.
“We’re already in 2021 … and 2050 is not that many years away,” he said. “It’s 28 years. That is not a long period of time.”