Energy Workforce & Technology Council CEO Leslie Beyer described the vital role of oil and gas in energy transition during remarks delivered at the International Association of Drilling Contractors’ virtual sustainability conference.
“Energy transition is already underway and it’s accelerating,” Beyer told attendees. “But it’s not an ‘either/or’ proposition about switching from one fuel source, but the entire energy ecosystem working together to produce affordable, reliable, and cleaner energy.”
The key driver, Beyer said, is the market. Capital flows show investors want to see companies reduce climate impact, improve environmental performance, and make progress on inclusion and diversity, as well as economic and environmental equity.
Beyer emphasized a point made by Rice University’s Ken Medlock, that the world is undergoing multiple energy transitions based on factors unique to each country and region.
“Industry trends, such as digitalization, remote technology, and automation are working to accelerate the transformation of how we produce energy,” Beyer said.
A range of factors are accelerating decarbonization of energy production, including governmental and regulatory pressure, divestment from fossil fuels and investor pressure, falling costs of clean energy technology, and technological innovation, Beyer said.
“This energy transition is unlike any other,” Beyer said. “The drive for decarbonization stems from the demand side with society recognizing the imperative to reduce carbon emissions, and operators are responding to internal and external pressures in an expanded and converged future energy system.”
Beyer said three types of action will set the pace and determine the OFS sector’s success.
- Cleaning the core — Companies can improve their current supply chains, technologies and infrastructures by increasing efficiency, managing demand and improving operational performance. This would lower emissions immediately while creating shareholder value by boosting returns and cashflow.
- Accelerating the transition — The OFS has an opportunity to drive the shift to cleaner energy supply sources by using gas as a transition fuel, and incorporating biofuels and intermittent renewables. This could yield a massive reduction in emissions.
- Extending the frontier — The OFS has a lead role in developing technologies such as green hydrogen, geothermal and other renewables with significant potential that has yet to be commercially scaled.
“Oil and gas will play a key role in the energy industry for the foreseeable future, and we’re making sure to educate policymakers and the public about why,” Beyer said.
The Council is making three points, Beyer said. The first is necessity — energy demand is increasing by 25% over the next 20 years and renewables can’t meet current demand. Second is practicality — existing oil and gas infrastructure is essential today, and can be adapted to transport other liquid fuels. And third, security — shutting down U.S. oil and gas production transfers geopolitical power and political influence to nations like China and Russia. It also could make the U.S. dependent once again on other nations for its energy needs. For example, China controls the majority of materials needed for making the batteries, turbines, and solar panels critical to renewable energy production.
Because of these factors, Beyer said, natural gas will play a key role in the transition to a greener economy. Gas-fired power generation will support renewable generation, meet low-carbon initiatives, and maintain electric system reliability. Natural gas’s affordability and well-developed infrastructure will enable its producers to supply traditional customers (residential, commercial and industrial), as well as emerging sectors (overseas and pipeline exports to Mexico).
The industry is already taking steps to lead the transition to a lower carbon energy future, Beyer told the audience. The shift from coal to natural gas for power generation reduced carbon emissions by 2.8 billion metric tons from 2005-2018 while energy production grew by 4%. Further reducing greenhouse gas emissions and improving environmental performance are top industry priorities, and they’re achievable with technologies being implemented or that are in development.
The Council is working with legislators and policymakers to encourage the Department of Energy to invest in technologies that make oil and gas cleaner rather than ignoring a vast energy resource with a well-established worldwide infrastructure.
“OFS companies have the experience and expertise,” Beyer said. “We know how to scale technologies to deliver energy on a global scale.”
Beyer said technology is changing the future of the OFS sector.
“While continuing to produce the oil and gas the world needs, OFS companies are also diversifying into energy technologies where they have core competencies, including renewables, geothermal, hydrogen and more,” Beyer said.
She said companies are reducing greenhouse gas emissions with carbon capture, utilization and sequestration technology, using drones to monitor for leaks, and driving efficiency with big data, internet of things and dual-fuel turbines.
The Council is working in areas vital to the sector’s future, Beyer said. Among the initiatives:
- First in the OFS sector to establish an online center to provide ESG information and best practices.
- Conducted first ESG certification program in 2020 and currently registering the second cohort now.
- Conducted a ground-breaking study of gender diversity in the OFS sector, and used those findings to develop a toolkit for members and create a curriculum for an Inclusion & Diversity Business Champions Program.
- Increased government advocacy, formed working relationships with legislators from both political parties, and worked to raise the profile of the OFS sector.
- Produce and distribute the Energy in Transition podcast, where Beyer engages in conversations about these topics with energy industry leaders, including Medlock, Allyson Book from Baker Hughes, Rod Larson from Oceaneering, and many more.
For more information about the Council’s work supporting the OFS sector, please contact COO Molly Determan.
