Day 2 continued
The New map
Day 2 is one of the longest and jammed packed with speakers from all over the globe and many different fields. Previously, we heard from speakers from India, Colombia, Saudi Arabia. Also, from companies like Chevron and politicians like John Kerry and Ernest Moniz.
Dan Yergin started a new session asking Ryan Lance of Conoco Phillips his thoughts on the future of natural gas? Mr. Ryan is convinced that the best way to lower carbon emissions is to use more natural gas. As a company they are reducing flaring down to just 1% in their E&P business. They also have a program to monitor up to 90% of their potential methane release.
In the same session Scott Sheffield of Pioneer Resources (PXD) said they are transitioning all their rigs to electricity away from fossil fuels. The plan is to go on the grid and buy renewables for all their fracking operations. Scott also raised concern with the new Biden administration policies to stop production which will lead the USA back to the days of importing 50% of the USA crude oil needs. Imports will again come from some unfriendly countries.
The conference moved next to a discussion between ExxonMobil, Qatar Petroleum and moderator Dan Yergin. These two companies are partners in one of the largest LNG projects in the world. This is in Qatar, the gas comes from the Arabian Gulf from the gas field known as the north field. This field is the largest known all gas field in the world. QP does have other partners helping develop the field. The north field is also shared with Iran.
Mr Yergin asked H.E. Saad Sherida Al-Kaali, CEO of QP and Minister for Energy Affairs if he thought LNG is a commodity? The response was a traditional view of the LNG business going back to the 1960's. That LNG is a big boy game and different from oil. To develop LNG projects, traditional customers require long term security. Suppliers need long term contracts to justify their investments.
In a follow up question Mr. Yergin asked what the role government was? Mr. Darren Woods, CEO of Exxon Mobil said that the industry requires stability in the law and regulations and that government should not pick winners and losers.
In a following session about investments in downstream one message came through. Today all investments are viewed through an Environmental, Social and Governance (ESG) lens. Yes, better returns for investors are just as important.
In “Reinventing Energy” Dr. Castello Branco, CEO of Petrobras added one of the best phrases of the conference and that was that elephants can dance, and they can also fly. He was trying to say that even large state-owned companies can reinvent themselves. Technology is the key and in Brazil they are moving towards low sulfur gas oil coming from bio diesel.
Baker Hughes is well known as a service company but Mr. Lorenzo Simonelli, CEO talked about reinventing the company by going back to where they began. A technology company.
One of the biggest challenges for the petrochemical industry is plastics. In a following session Dow and LyondellBasell discussed how they are confronting the challenge. The challenge is sustainability and circularity. Jim Fitterling of Dow described how they are making more products that can be recycled reducing the amount of waste going to landfills. Products that go straight to a recycle facility. This ecosystem is still a ways from being reality. Today it is still cheaper to produce from raw materials (virgin materials) so you use it and throw it away eventually ending up in the ocean. Mr. Patel of LyondellBasell had a similar approach but emphasized that you need to start with the consumer. That waste has to be collected at the source. “Molecular recycling”.
Senator Daniel Sullivan from Alaska has a program called save our seas. He started by recognizing the benefits of plastics which are well known. The challenge is handling the waste and that is why the planet needs a circular system. It all depends on the consumer.
Towards the end of this day Mr. Pascual of IHS Markit moderated a Ministerial Plenary to discuss how they were going to achieve net zero carbon emissions. The Ministers were from Norway, Canada, and Japan.
Minister Tina Bru from Norway told how the country is implementing policy to meet certain goals. To reduce emissions by 50% by 2030 and 90-95% by 2050. That Norway will be rebuilding in a green way using carbon pricing (carbon tax). She pointed out that even when we meet net zero we will still need oil and gas.
Japan Mr. Shin Hosaka of METI is concerned about ESG in trying to meet net zero.
In Canada, because of recent legislation, nothing new can get done with out First Nations approval. Speaking about the recent XL Pipeline decision to be canceled the Minister said that the original project was to be net zero but they were aligned with the USA decision and glad there were no more tweets. In a separate statement he says that “we need to build not tear down”. That you need public support. You need to keep jobs and create jobs and that people are important as is their future.
The session ended with a question about the American Petroleum Institute stand on carbon pricing.
The day concluded with a talk about Data Analytics. AWS, Saudi Aramco and ADNOC shared thoughts on the enormous amount of information that is being gathered. So much information that the kingdom just announced the launching of the world's largest supercomputer. ADNOC is working with Group 42 and their AI programs to analyze all its data. AWS helps many oil and gas companies with securing data and protecting against cyber-attacks.
Tomorrow is gas day.