Page 18 - Gi_November2020

gas takes centre stage

recognition that scaling CCS will be FIGURE 1 WORLD NATURAL GAS DEMAND BY SECTOR
essential to meet climate targets. It is
estimated it will take 15 years for
policy on lowering carbon to become
a catalyst for action.
A key parameter is the assumed
carbon price (Figure 3).
The quicker governments incentivise
industry to adopt technology, such as
through a competitive carbon price, the
quicker industry will drive down the
cost from concept to commercialisation.
Based on sensitivity studies, DNV GL
forecasts that if predicted carbon prices
for 2050 (USD80 in Europe, USD60
in Greater China and OECD Pacific,
and USD50 in North America) were FIGURE 2 WORLD NATURAL GAS PRODUCTION BY FIELD TYPE
brought forward, then the level of CCS
deployment in 2050 (2.2 GtCO₂/yr),
following the scaling of CCS in the 2040s,
would be brought forward along with it.

The quicker governments
incentivise industry to adopt
technology, such as through
a competitive carbon price,
the quicker industry will drive
down the cost from concept to
commercialisation

FIGURE 3 CARBON PRICE BY REGION
This could transform the oil and
gas industry into the decarboniser of
hydrocarbons and the world’s primary
supplier of CCS. It could potentially
transform the sector into an essential
contributor in realising climate
ambitions, rather than missing them.
Forming partnerships among
government, industry and associations
will be crucial in scaling innovation
and technologies for decarbonisation.
Working together to make hydrogen and
CCS safe, effective, and commercially
viable will give the oil and gas industry
the certainty it needs to manage new
risks and accelerate its transformation will shape demand for clean energy in help shift the mindset
towards a low carbon future. their respective industries. and the timeline,
As the sector seeks to maintain While the industry recognises that from preparing,
its licence to operate in a carbon- its licence to operate in a carbon- to delivering
constrained world, several oil and constrained world depends on its decarbonisation in the
gas industry associations – including ability to reduce its carbon footprint, coming decades.
Oil & Gas UK¹ and the Norwegian Oil the longer-term success of the sector
& Gas Association² – have published may hinge on its ability to drive References
roadmaps for reducing carbon output proactively the necessary transition
from oil and gas production. These rather than passively react to societal ‘Pathway to a net-zero
basin: Production
include medium-term emissions pressure. Recently, major producers³ emissions targets’, Oil &
reduction targets (towards the 2030s) have transformed from ‘big oil’ to ‘big Gas UK, June 2020
and longer-term targets (towards energy’ companies, with many setting ‘The energy industry of tomorrow on the
mid-century). Furthermore, industry near or net zero carbon emission goals Norwegian Continental Shelf: Climate strategy
organisations in other sectors, and investing in a diverse range of towards 2030 and 2050’, KonKraft report 2020-1
such as the International Maritime sources, carriers, technologies and ‘NET ZERO: European integrated majors outpace
Organisation, are setting greenhouse distribution models. US E&Ps, Midstream on climate goals’, S&P Global
gas emissions reduction targets, which We encourage all stakeholders to Platts, 27 July 2020

18

15/10/2020 10:59
DNVGLEnergyOutlook.indd 3
DNVGLEnergyOutlook.indd 3 15/10/2020 10:59