The Conversation We’re Not Having, About Gas

Introduction

• Hello everyone and thank you for joining.
• It feels like the last few times we’ve come together, our industry has been on a rollercoaster ride – and as we meet now, it still feels like we’re on the same ride… we just hope we’re almost at the end. 
• But amid a lingering pandemic, volatile markets and industry upheaval – members of the International Association of Oil and Gas Producers have done a phenomenal job. Focusing on the job in hand… getting the energy where it’s needed… serving customers and communities.
• And we do that despite the noise surrounding us.
• I don’t just mean the clang of metal, the drone of machinery or the whirr of helicopters.
• I mean the debates and conversations… the many voices discussing the future energy landscape, the rise of renewables, the decline of hydrocarbons. 
• But when there’s a lot of chatter – sometimes it’s not the conversations you can hear the loudest that matter the most.
• But the ones you can’t – the whispers in the corner, the snatched words in the corridor.
• And amid the din in our room, there’s one big conversation that we need to be having much more loudly.
• It’s about natural gas – and its role in the future energy system.
• “Hold on,” I hear you say. “We’ve just been through what some have called a ‘global gas crisis’, COP26 came to a major agreement on methane – and major industry regulators proposed new methane rules. What do you mean nobody’s talking about gas?”
• Well, I’ve heard some of that too, and it’s important. 
• But to my mind – a lot of the conversation we’re hearing misses the bigger picture. 
• Let me explain.

Brussels

• A short time ago, I was in Brussels for work.
• At one event, we were talking about the role of natural gas.
• And there was a gentleman there – I won’t say where he worked but let’s just say he wore a suit. And he didn’t want to engage with our industry – at all.
• He was disinterested, dismissive. Perhaps a little rude. And made it clear that he felt gas should not be part of the future energy mix.
• After the event, as we were packing up, he asked me: “aren’t you ashamed of working in oil and gas?”
• That took me slightly by surprise.
• But I told him – “no”. I was proud. 
• Then he continued: all this talk of the role of gas – it’s just your industry looking for a lifeline.

Why?

• That was a wake-up call for me – many people see gas as a problematic energy source that might be tolerable in the short-term – but should be avoided in the long-term.
• And if we do not change the discussion around gas, we’ll not just be excluded from the conversation – but we may not even be allowed into the room.

Case for gas

• If I’m honest, I think a big reason for that is down to our industry – we’ve been a little presumptive.
• After all, we know why the world needs gas – and why we produce it. And how it can help accelerate the shift to lower carbon:
  • Displacing coal in emerging economies. 
  • Providing a reliable source of energy to supplement the intermittency of renewables. 
  • And looking ahead, offering a low carbon energy source, when combined with CCUS and converted into blue hydrogen. 
• In short, it is one of the biggest levers the world has to get to net zero.
• Perhaps we’ve assumed everyone else sees it the same way. 
• But many people don’t. 
• And that’s a problem.
• Not just for our industry. But for the world.
• Because if gas is not seen as a viable part of the future energy system – if it is not seen as a solution – then:
  • Either the world won’t get enough of the gas it needs – which could hinder economic growth, stifle opportunities and hamper human development.
  • Or gas might not be produced responsibly, perhaps without enough of a focus on reducing emissions – and the world cannot hit net zero.

Winning a seat at the table

• So I think we agree that we need to be at the table – part of the conversation and informing decisions. 
• But if we want that seat – we have to earn it.
• And to do that, we need three things:
• First, our industry – needs to get our house in order on methane. That’s true all the way along the gas value chain. Because our existence as an industry – our licence to operate – hinges on society accepting what we do.
• And we will lose that licence if we don’t get methane under control. 
• What do I mean?
  • We need to detect and measure methane emissions – and I mean every producer committing to this. Technology is making this easier – and cheaper to do. And we cannot afford to delay.
  • Then we have to reduce those emissions with every tool available – allocating substantial resources into preventing methane escaping.
  • You’ve seen the coverage in the global media recently – COP26 focussing on the need to reduce methane – US and EU regulators taking action. 
  • If it wasn’t already obvious, we need to act – and act now. And I would say that is a good starting point for IOGP members to get behind the Oil and Gas Methane Partnership (OGMP) – either by joining or committing to equivalence.
• As you will hear today IOGP already plays a strong role developing industry standards – and stands ready to assist others in the industry as we work to reduce methane emissions.
• Second, as well as tackling methane, we need to take more action on CO₂. 
  • An obvious point – but it’s one thing stopping the unburnt methane getting into the atmosphere. It’s another thing addressing the CO₂ that’s released when the methane is burnt.
  • And the answer here is really about kick-starting CCUS.
  • There’s a lot of talk – perhaps a lot of excitement about the transformative potential of this technology.
  • But to make that a reality – we can’t wait. We need fewer reports and feasibility studies and more steel in the ground.
  • And yes, that means spending hard dollars now.
• Third, we need to work with policymakers. We all have aims we’re trying to reach – whether at company, national or international level.
  • We need to see each other not as hindrances to getting to our destination – but as allies who can help us get there.
  • I firmly believe that policy and industry innovation should work hand-in-hand. And the most long-lasting, transformative changes occur when that happens.
  • We’ve seen that before with tailpipe regulation turbocharging the development of electric vehicles.
  • We need a similar shift if we want to make blue hydrogen a widespread reality – and if we want to see ground-breaking projects like Net Zero Teesside become the norm.
  • The good news is we know this can work – take the relaunched Oil and Gas Methane Partnership. A voluntary initiative which now has more than 70 company signatories, many of which are IOGP members.  It has, in a short period of time, become a de facto standard and has the backing of governments and the EU Commission.
• So we know we can make this work:
  • That we can do more to demonstrate our industry is serious about bringing emissions down.
  • We know we can play a positive role in helping the world reach net zero.
  • And we know we can – and must – work with policymakers to advance the energy transition.
• And let’s remember, whether we win a seat at the table doesn’t just matter to us.
• Millions of people rely on the products we produce.
• And billions of people need the world to get to net zero.
• So there is no room for complacency. And there is every reason to act.

The world’s lifeline

• As I think back to that interaction in Brussels – with that gentleman in a suit saying, “your industry is just looking for a lifeline.”
• I remember my response was instinctive. I told him “it’s not our industry looking for a lifeline. It’s our industry offering the world a lifeline.”
• That’s the truth – but it’s not enough.
• We need to show him – and the many others in capitals across the world.
• And while I’m fairly sure I didn’t convince him, I know we cannot afford to be excluded from the conversation any longer.
• So let’s show we’re serious, show we’re in action – win our seat at the table.
• And let’s make sure that this is a conversation that we can not only hear – but a conversation everyone is paying attention to.
• Thank you.