Transforming oil and gas for the low carbon future

We need to think differently about how we use technology so that the oil and gas industry is part of a low carbon future.

I have no doubt The Paris Agreement is driving change in the way we produce and consume energy. The pace of the transition is increasing and this is a positive move.

Still, the role of oil and gas remains important as demand forecast shows it will keep growing in absolute terms. Oil and gas is therefore central to the transition to a different energy mix and the low carbon future we want to live in.

We use oil and gas to power our infrastructure, heat our homes and power our vehicles, but there’s increasing demand for it as a raw material for non-energy use. Oil and gas can be found in more than 6,000 everyday items made of plastic materials, plus if we look at the manufacturing, aerospace, automotive and construction industries we see an increasing use of carbon-based composite materials. The global market for these materials is forecast to be $100bn by 2021 – that’s only four years’ time.

So there’s an important role for oil and gas in the future. We need to think differently about how we use technology so that the industry is accepted as a part of a low carbon energy mix, meeting our needs for energy, materials and climate change.

At the Oil & Gas Technology Centre, we’ve been thinking about this journey, and we’ve identified three technology horizons: fix the challenges of today, change to meet the MER UK objectives, and transform the industry for the long term.

To transform tomorrow we need to consider what the oil and gas industry of the 21st century should look like. How can technology transform it to be part of the low carbon future?

I think it will be an exciting transformation. An industry which is product-driven and low carbon-focused could, for example, produce hydrogen offshore while leaving carbon in the ground. Or it could produce electricity directly from gas offshore and connect to the grid with no need for a pipeline, sharing infrastructure and cables with offshore renewables. Adopting carbon capture and storage or reuse would achieve a super-low carbon footprint.

We see an industry where humans and robots work together, where we use artificial intelligence for augmented decision making. In this future, installations are unmanned and mainly subsea and work is automated, allowing it to be controlled remotely, creating high-value onshore jobs.

Clearly all this requires a transformation in the workforce and in the leadership. This involves new technology, but also new thinking and new behaviours.

As exciting as that sounds, it will take time. Building an industry for the future means changing the way we work over the next 20 years. It means maximising economic recovery, unlocking the reserves stranded in the small pools, leveraging the potential of digital and big data and introducing robotics and composites into the way we work. There’s a big prize if we can do that, not only in maximising economic recovery for the North Sea, but also because all this is highly exportable if we develop it here first. We have a choice to do it and lead, or let someone else do it, and end up importing both technology and hydrocarbons.

So our journey needs to start today, fixing today’s issues. We have some ambitious targets at the Oil & Gas Technology Centre, and I am energised by the level of support and engagement we have received so far from the industry. This is what’s needed to secure the future of our industry.

We have a choice to do it and lead, or let someone else do it, and end up importing both technology and hydrocarbons.

We’re focused on efficiency, reducing the cost of wells by 50% for example, eliminating corrosion as a source of unplanned shutdowns, eliminating vessel entry for inspection, and developing the 3.4 billion barrels already discovered, but locked in small pools.

Technology has a vital role to play in achieving all this. That’s why the Oil & Gas Technology Centre was established and co-funded by UK and Scottish governments to accelerate development, deployment and adoption of innovative technology.

I am excited about the next phase. With continued support and involvement from the across the sector, governments and academia, we can transform the oil and gas industry for the low carbon future.