An expansion of nuclear power, as well as more natural gas-fired power generation in developing nations, appear to be two technologies crucial to achieving global net-zero carbon emissions by 2050.
Oil, both as a fuel and chemical feed stock, isn’t going to disappear in the near or medium term, if only because so many of the world’s economies are tied to it.
And hydrogen, perceived as a long shot at the start of the Biden administration, is emerging as the one element thought to be capable of bridging multiple technologies, solving storage for renewable power, for example, while also replacing natural gas and gasoline as fuels.
These are some of the assertions that emerged during a four-day series of webinars produced last week by the Atlantic Council to coincide with the annual Abu Dhabi Sustainability Week. The four hours of rapidly paced discussions were also a prelude to the 27th U.N. Conference of Parties (COP27) scheduled for November in Egypt.
The 2022 Global Energy Agenda
Majid Hamid Jafar, CEO of Crescent Petroleum, based in the United Arab Emirates, said the long-term oil supply situation is the larger and more important question because the switch to renewables is going to take many years.
He said “climate activism” has damaged the infrastructure of the oil and gas industry.
“There are always short-term geopolitical impacts and volatility when it comes to energy markets. That’s always been the case and likely always will be the case.
“My bigger concern is the longer-term trends we’re seeing in the underinvestment: 25% lower investment in the upstream [exploration and production] than pre-COVID, but half the level of a decade ago.
“I think there needs to be this realization that oil and gas is still going to be needed,” he said. “It’s just how we produce it will be cleaner, and how we use it will be different.”
He said Crescent has gradually transitioned more from oil to gas. “We’re now at 85% gas. We reduced our flaring to near zero, and by offsetting the remainder we actually declared net zero not in 2050 but last October.
“The gas we actually produced in the region displaces diesel for electricity that actually avoids more emissions than all the Teslas on the planet,” he said.
“I think that impact is underappreciated. Yes, solar and wind power costs have come down, and they’re very promising. But the energy from them can’t be stored. So you need stable background sources like natural gas or nuclear as the U.S. energy policy has demonstrated.
“And on the oil side, even if cars become electric, they’re still made from products of oil, as are solar panels [and] wind turbines, and if we just look at the COVID pandemic, everything we’ve relied on, from smartphones, masks, sanitizers and vaccines, are all made from oil products,” he said.
In response, Francesco La Camera, director-general of the International Renewable Energy Agency, said the global oil industry lacks resilience. But he argued that the solution is moving more quickly toward renewables.
“What are the technologies that today are most competitive and cheapest way to produce energy? What are the technologies that ensure more resilience in the system?” he asked rhetorically.
“What are the technologies that can assure us to be in line with the Paris Agreement goals? What are the technologies that ensure that the energy transition will also … reduce the inequality existing today in the world?
“And as far as I can answer, the only way … is going faster and faster toward renewables.”
Hydrogen: Energy System Integrator?
The role hydrogen might play in decarbonizing transportation, stabilizing electric grids dependent upon increasing amounts of wind and solar generation, and eventually displacing natural gas in heavy industry was the focus of the Jan. 20 discussion.
“Our aim is to look at how hydrogen could become an energy system integrator,” Randolph Bell, director of the Global Energy Center at the Atlantic Council, said in opening remarks “tying together the worlds of electrons and molecules, leveraging the expertise of both the hydrocarbon and renewable energy sectors, and decarbonizing hard-to-abate sectors.”
That hydrogen has stirred global excitement was evident during the discussion.
Marco Alvera, CEO of SNAM, an infrastructure company headquartered in Milan, said the question of hydrogen’s future was “spot on.”
“We’ve had for too long a debate whether it was going to be molecules [or] electrons,” said Alvera, who wrote a book published last year, titled “The Hydrogen Revolution.”
“Because it’s a molecule, [and] you can make it with electrolyzers through electrons, you’re simply bridging the gap and that really helps the sector coupling. …
“Hydrogen allows us to produce great quantities of renewable energy, where there’s no grid, where there’s no market, and we can … produce hydrogen from the renewable energy. And we can easily transport that hydrogen — whether through liquid hydrogen, through [converting it to] ammonia, through methanol, or directly via pipes — we can move it to where the markets are.”
SNAM operates 30,000 miles of pipeline in half a dozen European nations and has already blended up to 10% hydrogen with natural gas. It has also done an engineering assessment of its system, determining that 99% of its pipeline system could run pure hydrogen, he said.
“The quality of the steel that was used in the ’70s, ’80s and ’90s to build our natural gas pipelines [is] exactly the same that we would use today to build a dedicated 100% hydrogen pipeline,” he explained.
The company has plans for enormous expansion.
“We have committed to our investors to have a hydrogen backbone to be able to move green hydrogen molecules from North Africa into Europe before 2030,” he said.
Pipeline companies in the U.S. will probably have to replace existing gas lines because the steel in the lines is harder than what was used in Europe in recent decades and could become brittle transporting hydrogen, Alvera said.
But that would not likely be as expensive as it sounds, he added, because the new lines could run in existing rights of way, side by side with the gas line, or even inside the old lines.
Wind to Hydrogen to Liquid Fuel
Houston-based Highly Innovative Fuels (HIF) is a company with big plans to make liquid fuels from hydrogen produced from water in electrolyzers using power produced by wind.
HIF has a project planned for Texas where site selection is underway, one planned for Australia and another in Chile where a plant is already under construction.
In Chile, the capacity factor of wind turbines is 75% (compared to 45% in Texas), said Meg Gentle, the company’s executive director. That means the wind farm will not have to be overbuilt to compensate for as much down time. And that means less expensive power to run the electrolyzers producing the hydrogen.
“We will be combining the hydrogen with CO2 that we will capture from the atmosphere,” Gentle said. “And when you do that recombination, you have methanol, which can easily be synthesized into gasoline, eventually into jet fuel or, in fact, used by the shipping industry simply as methanol. So, it creates a way to convert electricity into liquid fuels.”
Hydrogen Production in the Middle East
HIF will likely find itself competing with Middle Eastern companies, including one headquartered in Abu Dhabi that has similarly big plans.
“We have been a country that relied for decades on the rich hydrocarbon resources. This [hydrogen] gives us an opportunity to transition to a clean energy supply system,” said Alexander Ritschel, head of technology at Masdar Clean Energy.
He said his company will use the expertise and infrastructure it developed to move oil and refined products to instead transport hydrogen-based products, including aviation fuel.
He added that the company will make both green hydrogen with electrolysis and blue hydrogen, made from methane. And it has begun projects to make hydrogen from renewable methane made from municipal waste.
Moving the hydrogen out of the Middle East won’t be a problem, he said. “We have a lot of international sea routes, leaving from the UAE, going to all destinations in the world.
“But most importantly, the UAE is known as an aviation hub; we have one of the largest airlines in the world. We have launched a pilot project now … producing sustainable aviation fuel, purely made with solar electricity, [hydrogen] and recycled CO2,” Ritschel said.
Pathways to Net Zero
Friday’s webinar looked a little more closely at the range of strategies that nations, by resource necessity or for reasons of security, are expected to choose on the way to achieving net-zero carbon emissions.
“Our panelists will explore how different geographies, resource endowments, politics, financing and so on can impact a country’s net-zero strategies,” the Atlantic Council’s Bell explained in opening remarks.
Moderator Ryan Heath, a senior editor at POLITICO, noted that governments appear to be ahead of companies in figuring out exactly what net zero means and how they might reach it.
Quoting a recently released PricewaterhouseCoopers global CEO survey, Heath noted that when all business sectors are included, rather than just energy companies, only about a quarter of companies have actually created a net-zero target.
Melanie Nakagawa, special assistant to President Biden and senior director for climate and energy on the National Security Council, said governments are “trying to shape a policy landscape that can help enable other companies and entities to put forward their own net-zero targets.”
“We can create a demand pool for … innovative technologies, and we can be the enabling environment in many countries around the world for investment.”
One administration effort to create that “enabling environment” that garnered a lot of attention at last fall’s COP26 in Scotland was a commitment to immediately work to reduce “fugitive” methane emissions, the majority from oil and gas operations, by 30% by 2030. More than 100 nations formally agreed to the commitment.
Alain Ebobisse, CEO of Africa50, the infrastructure investment platform capitalized by the African Development Bank and more than 20 African nations and central banks, echoed Nakagawa and the Biden administration’s goals but stressed that solving energy shortfalls immediately is just as important as figuring out a future net-zero strategy.
Noting that Africa as a continent “contributes roughly 4% of global emissions” and that the majority of Africa50’s energy investments are already developing renewable technologies, Ebobisse stressed that many African nations are in the middle of an energy crisis, partly because of a global natural gas shortage.
Arguing that more natural gas infrastructure must be developed, Ebobisse said cooking gas prices in many African nations have nearly doubled, from $9 to $17, for a 12.5-kg canister and that people are switching to firewood and charcoal, which is adding carbon pollution.
“The main point that I would like to make is that we believe that natural gas should be part of the transition fuel solution, because of course it’s the cleanest burning fossil fuel, but also because it can … provide baseload power that works well with intermittent renewables,” he added, echoing an argument often made by the gas industry.
Brice Raisin, head of sales for GE Gas Power in Europe, the Middle East and Africa, built on Ebobisse’s assertion.
He said utilities and power generators face a “trilemma”: a growing demand for electricity; the obligation to provide reliable, affordable and sustainable power; and now net-zero targets.
Gas generation, he said, can provide the fastest solution to the problem while the buildout of solar and both on- and offshore wind continues and small modular nuclear reactors are deployed.
And, in a nod to the potential of hydrogen, Raisin added, “When you invest in a gas plant, you don’t invest in a plant that will always emit CO2. You invest in a plant that technologically is able to burn all the types of fuel.”
Tim Holt, a member of the executive board and labor director at Siemens Energy, agreed with Raisin, adding that the ability of the industry to quickly build new gas turbine power plants would give renewable technologies the time to continue efficiency improvements.
Adam Sieminski, a senior adviser to the King Abdullah Petroleum Studies and Research Center’s board of trustees, further buttressed the argument for continued use of fossil fuel.
“Hydrocarbons and net zero are not incompatible,” said Sieminski, a long-time energy analyst, former U.S. Energy Information Administration administrator and National Security Council member under President Barack Obama.
“Net zero does not mean no hydrocarbons. What it means is controlling the carbon from those hydrocarbons. I think at some point, we’re going to go to below zero. Right? We want to have negative emissions, but that still doesn’t mean [no] hydrocarbons.
“Alain mentioned that in Africa, natural gas is a good solution. Look, there’s more than a billion and a half people who don’t have clean cooking fuels. Propane might be [an] answer to that,” he said.
“Let’s figure out a way to deal with the carbon associated with the propane. Carbon is not the enemy. There’s living carbon … trees and breathing. There’s durable carbon that locks up the carbon, and it doesn’t create a climate problem. The problem is fugitive carbon. The problem is not the fuel,” he argued.
“Concentrate on the solutions: Direct air capture and nuclear and green initiatives are a way to accomplish that. We just have to push the cost down.”
Completing the circle of that argument, Sama Bilbao y Leon, director general of the World Nuclear Association, noted that energy technologies are rapidly changing.
“I think that the energy systems of the future are not really going to look very much like the energy systems that we are used to right now. We are trying to electrify a lot of things. We are going to see a lot of coupling between electrical grids and mobility. Hydrogen is going to play a role.
“I think there’s a real need for political leadership and pragmatic leadership. We really need to be very much technology-neutral. We need to put in place both policies and market structures. We need to look at what technology can support the system,” she said.
“Obviously, we are really going to need all proven low-carbon technologies, including of course, nuclear. There is not going to be not one size that fits all. Countries are going to pick the energy mix that fits best: their natural endowments; their socioeconomic situation; their cultural preferences. So obviously, there’s going to be a huge diversity,” she said.
“I think that advanced economies are going to have to focus on decarbonizing; however, when I look at emerging economies, I think their focus needs to be energizing.”