There is “very, very little” spare production capacity to meet the challenge of a major energy upheaval and although past disruptions have been managed successfully, the challenge brought by the Russia-Ukraine conflict “looks almost to be existential”, Neil Atkinson said.
And the historical under investment in upstream oil and gas is “coming to bite us”, our panellists agreed, with Peter McNally noting that today’s crisis is a stark reminder that dependence on any one source of energy is “not a good idea”.
Turning to potential solutions to the energy crisis, our host Catherine Ford asked how technology is transforming the energy system, including the emerging area of carbon capture and storage (CCS). Several CCS projects have kicked off this year, McNally said. “And it looks like there’s more to come.” Although costs are still high, “governments are supporting this, and large companies really are committing to invest in this space”. Atkinson’s response was that although progress is being made, the commercial scalability of CCS and its rollout across the world “is just not yet there”.
Enormous infrastructure investments are also required in developing countries with burgeoning populations. South America is “fascinating”, our panellists said, highlighting Guyana’s expanding role in oil production, and ExxonMobil and Hess Corporation’s discovery of “billions of barrels” of oil. Africa is important not just from a traditional fossil fuel perspective, but also rare earth minerals that are needed for the energy transition, including cobalt, copper and zinc.
McNally also touched on how the US has shifted from being an importer of natural gas to a major exporter, now a lifeline to Europe. “It is a low-cost resource with an ability to export,” he said. “And that is something that we’re going to continue to watch.”
As highlighted by our panellists, by 2050 there will be another 1.5-2 billion people on the planet. In 2022, the task of meeting soaring energy demand and achieving net-zero goals is greater than ever.
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