“Undoubtedly, yes, the world must accelerate its transition to renewable energy. Cost is no longer a major barrier for renewables.”
That’s Sir Mark Moody-Stuart, chairman of the United Nations Global Compact Foundation, an organization dedicated to finding what it calls “lasting solutions” to the world’s pressing global needs, including, for our purposes here, energy. Moody-Stuart, a director of Saudi Aramco and an advisory board member of Envision Energy, said there is no magic bullet to the problems facing the energy sector, but the hurdles – one specifically, upon which all change hinges – is changing.
So, if cost is no longer the beast in the room – or the well, as the case may be – what is?
He said “intermittency” – the need to develop technologies to store energy for periods of little or no wind or sun. To this end, batteries are one answer, he believes, but still face problems concerning scale, resource availability and environmental challenges.
“An alternative is to use spare capacity at times of high renewable availability to split water into oxygen and hydrogen. The hydrogen can then generate electricity or drive heavy transport, aircraft or processes not easy to electrify,” he said.
The Will for Renewables
But before any of that is accomplished, industry must be able and, as importantly, willing to pursue renewables.
How’s that going?
“We’re at an early stage,” he said of the pursuit generally.
“European companies, such as Shell and BP have acknowledged the challenge since the late ‘90s,” said Moody-Stuart.
But progress is being made across the industry.
“Now all companies in one form or another have acknowledged it and have called for a price on carbon to accelerate it,” he said.
This is essential, he believes, if carbon capture and storage is to work. And if that works, the transition will happen sooner rather than later.
“I believe that the oil and gas majors have a very important role to play in the transition using their skills and cashflow,” he said.
There are signs they are doing so.
“At major industry conferences, CEOs are stressing the need to form alliances with others and work with society to address major environmental and social challenges such as climate change,” said Moody-Stuart.
Further, these energy giants have the temperament and know-how to work across international boundaries. While politics are often divisive, business, on the other hand, if it deals in openness, can be a stabilizing, civilizing factor to progress and growth, he explained. Industry, however, will not be the only player in the game, for consumers and governments have a stake in not only the outcome but how the game will be played and what rules will govern the transition and the future.
The UN Global Compact acts in a sense like an umpire. It came out of a challenge 20 years ago by then-Secretary General of the United Nations Kofi Annan, who wanted to put what he called “a human face on globalization.” The Global Compact is the league office, of sorts, committing itself and its members to a set of overriding principals, including human rights, labor, the environment and anti-corruption. At present, the Compact has more than 10,000 businesses engaged in countries all around the world and many local networks.
Moody-Stuart, who was chairman of the Royal Dutch/Shell Group from 1998 to 2001, said, “The Global Compact Foundation simply looks after the private sector money going into the UNGC, as the organization is 85-percent funded by business.”
The Role of Geoscientists
He addressed such issues at this year’s AAPG Energy Transition Forum in Edinburg, Scotland last month in a seminar entitled “Geoscientists in Transition.” Much of the 2019 program built upon the discussions held during the 2018 form, with an added emphasis on the individual in the new energy era.
When asked where many of the world’s geoscientists are in this process, Moody-Stuart said they are where their companies want and need them to be.
“A major employer of geoscientists (the petroleum industry) is in transition, which affects them. (There is) emphasis on more gas and eventually less exploration, but this will take time,” he said.
While there are, as mentioned, major opportunities in CCS, there are other areas of growth.
“New jobs in geothermal and engineering geology for renewables – turbine tower foundation and geoscience in the widest sense, not just marine geology but oceanography,” he said.
To the matter of cost, though, while it may not be the force it used to be, there will have to be some long-range thinking about how much of a shadow it will cast.
“First, we all need to unite to support regulatory and fiscal frameworks,” said Moody-Stuart.
This can be accomplished by using taxes or market mechanisms to establish a carbon price high enough to drive significant change, with proceeds used to support those negatively affected parts of society.
“The poor are more adversely impacted by pricing, so we should mandate strict performance standards for technologies or ban some energy sources unless mitigated,” he said.
In 2011, Moody-Stuart wrote, “Responsible Leadership: Lessons from the Front Line of Sustainability and Ethics,” a book part autobiographical, part confessional and part manifesto. In it, he talks about the philosophical, political and industry challenges of the 21st century.
Today’s reality, he reminds us, is a call to action.
“Finally, renewable-energy projects are currently less profitable than oil and gas projects. The challenge for both oil majors and their investors enjoying high dividend yields is how to profitably apply their cashflow and project skills in the new energy world,” he said.