Oil & Gas 360


“Fossil Fuels are not going away. Natural Gas is the bridge to climate change nirvana.” – Stu Turley

There seems to be several common threads to our mixed-up world in 2020. Everyone seems to have forgotten what it means to be human, and there is a mixed message about fossil vs. renewable. Just take a look at California exemplifying the results of decades of a poorly implemented Green Energy plan. A well balanced diet of nuclear, natural gas, solar, wind, hydro, and other renewables will get us to climate change nirvana quicker with the lowest kWh for the consumer.

ESG Investing Meets The Covid Challenge -oilandgas360

While Covid helped define the first half of 2020, the oil and gas industry’s financial models were already changing. Too much dept, and large CapEx budgets. Investors are no longer willing to wait years for returns. They are looking short term profits such as quarterly or even months. We often talked about ESG, and CSR, are critical across all industries, but even more important to investors and consumers in the energy market.

The economic recovery both in the United States and International, is primarily around renewable power projects. To understand where the priorities are placed; follow the money. The renewable projects will require fossil fuels for manufacturing, marine shipping, and providing sustainable power continuity, for years to come.

In the current environment companies and politicians take the path of least resistance. In many corporate sustainability and ESG reports you will find that reduction in greenhouse gases will be achieved through the retirement of coal and all fossil fuels.

The International Maritime Organization’s regulations in the MARPOL Annex had increased regulations on pollution and required the maritime shipping GHG output in line with the Paris Climate Agreements. These regulations in pollution output have had major a major impact to increased technology and changing the fuel from Sulphur laden fuel to LNG throughout the world’s fleets of shipping vessels.

The worlds shipyards have a significant number of orders for LNG carriers, LNG cruise ships, LNG ferries, LNG container ships, and LNG vehicle carriers. Qatar Petroleum just recently signed a record-breaking LNG shipbuilding agreement. These agreements could reach over 100 + new LNG carriers. LNG is poised to take the lead powering the world’s commercial shipping.

Getting the lowest cost kWh to the world’s population is critical to helping elevating people from poverty. India has 4 LNG import facilities and have 2 more in process. The Indian leadership is focused on providing low cost energy to all its citizens. They have also included wind, solar and coal in their energy mix. The wind and solar projects are being subsidized by the Chinese companies that have been awarded contracts. Without the additional financial support, the price would be much higher for kWh than the natural gas energy plants.

Currently in Europe and the Middle East there are many disputes over territorial waters. The disputes are primarily over the large natural gas fields that are currently in production, and known reserves. The Israel and Cyprus governments have current pipeline projects from the Israeli Leviathan fields to Cyprus.  Figure 1 shows the pipelines that are currently in production or negotiation. The primary reasons for the increased natural gas projects and cooperation between countries is financial, economic, and social.

New technology has been announced in blending hydrogen into natural gas pipelines. The turbines powering the pipelines will now pump 20% hydrogen and 80% natural gas. As hydrogen is on the list of socially accepted green fuels, transportation of natural gas subsequently gets included with the green movement. There are some real advantages to using the natural gas pipeline systems to transport hydrogen. The biggest advantage is using the existing infrastructure.

 

Political: Breaking the Russia natural gas dependency and political control.

Economic: Natural gas is the most cost-effective source of abundant energy generation.

Social: The worldwide green movement is committed to eliminate fossil fuels. That said, there is more of an acceptance to use natural gas as the “bridge” to green nirvana.

Conclusion:

I personally liked this quote – “iPhones do not grow on trees, but rather from under the ground.” – Terry Edam, Author, “The End of Fossil Fuel Insanity”.

People assume that they can simply get rid of fossil fuels and still have life carry on as it always has. The facts are undeniable: Oil, and its byproducts, are used to provide almost all goods and services, and fossil fuels are the most economical source of kWh across the globe.

Like it or not, the political and social view will determine the availability of capital, and therefore shape the oil and gas industry. Natural Gas is the flagship of most energy companies plans to phase out their carbon footprint. Definition, articulation, and implementation of an ESG program is the critical response from the surviving oil and gas companies.

Resources: 

Japan Inc. to invest $14bn in LNG development in Africa

ESG Investing Meets The Covid Challenge

Qatar Petroleum signs record-breaking LNG shipbuilding agreements

New pipeline tariff, authorisation policy to push for higher share of gas in energy basket

Growth in India’s LNG imports will depend on completion of connecting pipelines

QP signs deal to reserve LNG shipyard capacity in China

Exxon Mobil eyes LNG-to-power projects in Vietnam: government

Oil giants including Exxon set first joint carbon target

Samsung Heavy Industries and Bloom Energy Advance Plans for Clean Power Ships with Joint Development Agreement

Exclusive 360 Energy Expert Network Video Interview: Gareth Foulks-Jones – The international view of energy and renewables

Aramco plans downstream shake up

After the Bushfires and Amid the Pandemic, Australia’s Fossil Fuel Industry Is Gaining Steam

Samsung Heavy Industries and Bloom Energy Advance Plans for Clean Power Ships with Joint Development Agreement

Global natural gas production to fall by 2.6% this year: Rystad Energy

China targets rise in oil, natural gas output this year

BP outlines how quickly global carbon emissions would need to fall to reach net zero by 2050

EU defines green investments to boost sustainable finance

Equinor testing new LNG-powered shuttle tankers

Hess Corporation Releases 2019 Sustainability Report, Continues to Show Industry Leading ESG Performance

Sonatrach, Total sign LNG deal extension

Port of Marseille Fos looks to promote LNG and become a regional hub

Asian Development Bank to end fossil fuel financing

Trend

Equinor testing new LNG-powered shuttle tankers

Accelerating the Energy Transition in Germany: Industry Leaders Discuss the Opportunities Offered by Innovation and Grid Optimization

Hudong to deliver third Yamal LNG carrier


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