Earlier this year, climate protesters descended on London. They blocked off major bridges and thoroughfares, interrupted transport networks, and glued themselves to offices and buildings. London was just one example.
Their message was clear: the world is not doing enough to tackle climate change and that industries like ours must change.
The good news is we get it.
The dual challenge of providing more energy with fewer emissions may be the defining issue of our times.
The oil and gas industry has an important role to play and we are working hard to reduce emissions and help advance the transitions to a lower carbon energy system.
At the same time, we also want economies to develop, people to be lifted out of poverty and living standards to improve. I’m sure that’s something most of the protesters also support.
For that to happen, the world is going to need more energy. The International Energy Agency (IEA) suggests in its most likely New Policies Scenario, that a growing global population, with improving living standards, could see energy demand increase by 25% by 2040.
That’s a dramatic increase and it will require many types of energy to satisfy demand.
Even in a world consistent with the Paris goals, the IEA’s Sustainable Development Scenario projects oil and gas providing 48% of the world’s energy needs in 2040. In other IEA scenarios, the importance of oil and gas in the energy mix is even greater.
There’s no question that the global energy mix is changing. But it is even more important for us to improve how we produce our current mix. After all, the route to solving the dual challenge does not lie in the race to renewables but, rather the race to lower emissions.
Our role in tomorrow’s world
As an industry, it is our responsibility to provide the energy the world needs in ways that are cleaner and more efficient.
The International Association of Oil & Gas Producers (IOGP), brings together more than 80 members. We welcomed the Paris Climate Change Agreement of 2015, in which countries agreed to keep the global temperature rise to well below 20C and aim to limit them even more, to 1.50C. Our industry has responded positively and at scale – both to reduce emissions from our operations and to invest in lower carbon products and businesses.
Each company has its own targets and strategies for reducing emissions.
But the truth is we can only make real progress if we work together – with others both inside and outside our industry. That is the best way we can all help advance the energy transition, with greater potential to achieve large-scale reductions.
Take one example: The Oil and Gas Climate Initiative (OGCI), brings together 13 producers representing 30% of the world’s production. Recently, the OGCI announced the creation of a $1 billion investment fund to support projects that will reduce greenhouse gas emissions and recycle carbon dioxide for sustainable uses.
Most recently, the OGCI announced an investment in what could become the largest carbon capture and sequestration project in the United States. If it goes forward, the project plans to capture and sequester up to 1.75 million tons of CO2 annually from an ammonia plant.
Projects like this show that energy providers have an important role to play in advancing the energy transition. They have the technical capability, international reach, financial capacity, and understanding of energy demand to make a real difference. Crucially, the industry is showing it has the will to embrace the dual challenge and find solutions.
Changing fuel mix
As society transitions to a lower carbon future, renewables are going to play an increasingly important role. They are the fastest growing energy source in history and present exciting opportunities for energy businesses.
But our industry’s core products – oil and gas – will continue to provide vital energy and products to improve people’s lives.
Thanks to the cleaner-burning qualities of natural gas, 95 million tonnes of carbon dioxide did not enter the atmosphere in 2018, due to the switch from coal to gas in power generation. Without this progress, the increase in global emissions would have been 15% greater. And the future of gas is even more compelling, as opportunities to decarbonize it through carbon capture and storage and hydrogen conversion technologies become more viable.
Oil will continue to fuel transportation for many years to come. Twenty years from now, if recent trends continue, BP estimates there may be 300 million electric vehicles, equivalent to 15% of vehicles on the road. But this would only reduce oil demand by a few percentage points and have a modest impact on emissions. And heavy-duty vehicles, ships and planes are likely to require liquid fuels for the foreseeable future. So, fuel efficiency, hybridisation and gas to liquids are likely to have a greater potential for bringing down end-use emissions.
The task ahead of us is clear. The world needs clean, affordable energy – and a lot of it.
That means the industry will have to carry on producing, while striving to do that as responsibly as we can.
I know there are people who disagree and see no future for oil and gas. That can be uncomfortable for those of us who work in the industry.
But, as I set out earlier, I think, fundamentally, we want the same things. We want society to get the affordable, cleaner energy that it needs and that will see the world move onto a sustainable path. That can only happen if we listen to one another, understand each other’s perspectives and then work together to find solutions.
I’m confident that if we stay focussed on constructive dialogue, while continuing to produce cleaner energy, then the world can meet the dual challenge.
Fawaz K. Bitar was appointed Head of the BP Upstream Executive Office in October 2018.
Prior to this, Fawaz held the position of BP’s Head of Global Operations, Upstream for eight years. In this role he was directly accountable for the delivery of all aspects of operations performance and strategy, including safety, production and cost. He was also accountable for managing the HSE discipline for the Upstream.
Fawaz has been with BP for over 30 years. He has held leadership positions in the UK, US, Azerbaijan, Colombia, Egypt and Indonesia. He has extensive operational experience having held key positions such as Project Director, Engineering and Operations Manager and Offshore Installation Manager. He also led the construction and start-up of BP’s first LNG plant in Papua.
Fawaz has a Bachelor of Engineering degree from Newcastle University and is a chartered UK and European Engineer and a Fellow of the Institute of Materials, Minerals and Mining. He is a graduate of the London Business School Accelerated Development Programme and was formerly BP’s Executive sponsor for Imperial College London. He is currently undertaking a doctorate at the University of Aberdeen where he is also a guest lecturer.
Fawaz was a US Navy Liaison for safety and risk management and has provided expertise as part of the US Navy’s Strategic Readiness Review. He is Chairman of the AkerBP Safety, Environmental and Assurance board sub-committee.
Fawaz is a Fellow of the Royal Academy of Engineering, a member of the Royal Institute of International Affairs and a Freeman of the Tallow Chandlers’ Company. He is also Chairman of the International Association of Oil & Gas Producers (IOGP).