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.