Net-Zero and The Future of Natural Gas

Net-Zero and The Future of Natural Gas

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for being here. From Crescent Petroleum. We're joined by the CEO Magic Jeffer. I'm delighted that he's here. The executive chairman of the board from Till O'Ryan is also with us here, Sheriff Suki. And also I'm joined with the CEO from G Gas power Scott straight IQ. So that's our great team here on day. I'd like to actually start

with you, Scott, if I may because I was reading with some fascination your white paper that you just recently put out so I think this will give us perhaps a little bit of an overview and where you see gas at the moment in the role that it will play in mitigating Climate initiatives here, too, and actually really helping as we go forward, particularly into maybe a longer future. What do you sure I'd love to start at the thank You mean at the beginning Clearly, from a G perspective we play and many technologies and the energy space and I've studied this very acutely and as much as it's very clear that Renewables is going to drive most of the new capacity additions and the power sector. There's going to be a critical role for gas to play in this transition, and that role is going toe evolve over time. In this next decade were very much talking about a decade of action. How do we de carbonized, the existing power space is effectively as possible in which Hold a guest Switching is going to play a very material part in that transition. I mean

gas existing installed base relative to an average cold plan is half the carbon emissions. Just that shift can have Ah, dramatic impact, and we've seen that in the US because our carbon emissions in the U. S. Although power demand has been reasonably flat over the last decade. Emissions have come down by about a third, primarily with coal, gas switching and the U. S benefit in that regard because of shale gas. Has become going to become much more available to the rest of the world as LNG supply grows and places that not only care about the carbon but also care about the power density of gas in parts of the world, especially knees or Asia, where they're going to need to produce a lot of power. In a small footprint. So

this decade, maybe very focused on that wall the same time a lot of fast charging power era derivatives to support intermittent renewables. The longer term pathway to zero carbon with gas, whether that be true hydrogen or through carbon capture, and that will be an evolution, but we can't just focus on a net zero and state We need also focus on a decade of action. Now that buys the world more time in gas can help de carbonized that world, especially with cold, aghast switching, and that's a lot of what our white paper talks about. There's many elements of the two will pick up on. You know, as we go through the conversation, because I think it relates to what many other people want to talk about as well. Fatima if I may bring you

in at this point, and when we look at, you know, gas and elegy, particularly here. How would you say that? You know, people and companies can actually make their products more competitive and possibly more acceptable when it comes to de carbon ization. Um hi. Then I'm happy to be again part of the Atlantic Council Global Energy Forum.

Um We? We definitely seen, um the momentum increase recently when it comes to net zero on the deck, urbanization off all fuels. And we've always looked at natural gas and LNG as part of the solution. Um uh, Scott here just gave given example and the U. S is the most recent, But we've seen this as well. In China. We've seen it before.

In the UK, as as the roll off gals is more visible in the energy mix. We see how this impact that the emissions and the carbon Footprint. Uh, but clearly when we're talking about 0 50% lower is not good enough.

So where there is more that needs to be done, And I would like to summarize it in three points. Maybe First of all has producers as well as the consumers. We're looking at the whole value Children. We need to make sure that our operations are as efficient as possible when it comes to the emissions that we image to the to the atmosphere on and this is being also One of our main focus is here and I'd knock. A sum of you've heard with announced that we need to produce our gsg emissions intensity by 25% and 2030.

And if I talk specifically about Adnoc LNG We are translating this into actionable projects that are part of our plants. The second point is carbon capture. On the on the curd is off course, offsetting the impact on I was just doing a quick back of the envelope Calculations just now, with my 10 years old daughter s. So if we assume that a cargo off LNG needs to offset its impact way need to plant something like 240,000. Trees. We toe just offset the whole effect.

We need toe plant trees equal to those and Switzerland multiplied by three just for one year. Away. Clearly there is it's not one or the other. It's all of the above that needs to be done in order for us to Really make and continue having Gaza as a competitive fuel and Andrea Lee, this is going to differentiate the producers as we move on. Yes, indeed. They are there so many elements that we really have

to take into consideration. It's gotta be competitive. It's gonna be available, clean, safe, affordable all of that. So that's got to take all of these boxes and that will actually then ensure its long Germany shake me off. If I could come to you on that sort

of issue in many ways to him. We've heard a lot over recent years. In fact, in terms of you know, is gas. Just a transition fuel or Canada actually be a permanent Component. You know the future energy mix. What do you think? The problem with with Making gas a transition. You know, it needs to be a transition to something else can becomes. What is that Something else Right now, if you're talking about Ah solar wind of photovoltaic solar. Uh, it's growing about 13% a year. It's probably according

to the idea is gonna take up about a third of new energy, new electricity demand. Uh, where's the other team here is gonna come from. There's not enough. Alternatives Right now, I'm not using the Internet or alternatives to mean alternative fuels but actually alternatives to gas for power generation. On that make more sense a zoo first step, and Scott was certainly mentioned this earlier. Switching from coal to gas makes a lot of sense from a carbon perspective, and that is why you K now has gone back to essentially preindustrial levels of carbon emissions.

Just my basic now coal plants and united in the United Kingdom. If the world does starts doing that. That is a huge step towards lowering carbon emissions, But it won't get you to net zero. The another step.

However, is going to have to be dealt with in China the greatest Uh, priest and electricity demand is about somewhere between order to with curative electricity demand in the world right now because of the factories in and Thank economic activity that's going on. However, it's still about three new coal plants per week coming on stream. But how do you control for that? How do you Build a capacity of energy electricity through Three. It is to hydrocarbons or even carbon that that will get you to net zero. I'm really having trouble finding how the mathematics work towards getting achieving that's you know. Without a significant change, Jimmy Pena.

Activity in the world and, frankly, a lower standard of living. So what point here is that in any mix of energy in the future hydrocarbons, Gaspar Electricity oil for transportation. Well, certainly play a part. It'll be a different part over time,

but but there was some of your role in for gas as your question was about a transition. Yes, over the next Period, certainly as China, South Korea and Japan, which constitute a huge portion of, uh of gas meant if they started moving towards their targets, there will be an increase in LNG demand. In Asia and those countries specifically before it actually ever dissipates over time to try to reach the net. Zero policy. So if you're trying to reach next near zero, you will have an increase in gas command. Overtime for theoretically you have then a decrease, which I'm still questioning them.

Yes, indeed. Getting the metrics around there is it's challenging to say the least. But Majid when there's also challenging, of course is, I guess you know it's a challenge out there for the industry to actually get in at zero. When we look at the advantages of natural gas. I think we can see right now. It's absolute necessity. But where would you say are the big advantages that will actually Perhaps building more sustainability forgets.

So I think First of all, I agree very much with everything that's been said already. I do think that climate change challenge is fundamentally how do we win Asia off cold Because that's where the growth is. We've got 80% of the world's current coal consumption in Asia. China alone is half the world's and India another 15%.

S O. Everything that's done in Europe, with the U. S isn't really going to matter If that trend continues with the two or three power plants a week that we heard about Esso Gas will play a key role as an enabler over Neuticles. It's unnecessary compliment. The U. S. Energy policy for 2050

has exactly that balance between their own 40% off natural gas and 40% off renewables on. I do think it's unhelpful that the whole fossil fuels versus renewables mindset that people have Out there in the public. We need to break away from that oil is about transportation and making stuff on bury important stuff, you know, including masks and sanitizers and vaccines and medicines, and all the stuff we've come to rely on. Gas is a power fuel. On it needs to be looked at, But it's actually gas replacing coal.

That's had 100 times bigger impact on reducing Sio two emissions in the last 10 years than all the electrical vehicles electric vehicles in the world, But we don't get the credit Azan industry We do need to measure and improve our operations in terms of meat, a leakage in terms of flaring. I mean, we have Crescent Petroleum were now 85% natural gas. Cut our carbon intensity to a third of the industry average are flaring down 2.7% and trying to push that further, So I think all of that is going to be important for our industry. But in parallel we do need to advocate For the industry. Would Mackenzie's estimated we need $2 trillion

of investment in the industry between now and 2040. The concern is that those sources of financing an investment are starting to dry up because somehow we've been put in this bucket as not part of the solution on until the technologies of storage and hydrogen and carbon capture. Get cracked, and none of them happened in its scale. Yet, let's admit it, gas will will be absolutely unnecessary compliment on destination not not just to transition. Thank you, M Chery probably look at demand on bond check. Now. I've just mentioned it there, too. But let's have a look at the well. I would say the potential growth of energy consumption

on a global basis. You know, we talked about bringing people out of poverty by 2030 2050 a soon as possible, And I think that the responsibility of the world's actually do that. So surely the growth in demand and also we look at emerging economies as well.

This has got to be high on gas is going to be a very strong role there. Talk to me about that. And also in terms of you know what those figures coming out of the International energy Agency or looking like perhaps Well, let's put things in perspective to start with we today consume consume on a global basis. He 100 million barrels of oil equivalent.

Um Off that 100 million roughly is oil. 65 million roughly is gas. 70 million roughly is cold. And renewables is 11 million. So we and and the rest is nuclear So we have to choose. What is the mix that we're looking for? But before we do that, we have to agree on what is the growth rate going to be? So I was a little surprised by the numbers showing that the growth rate is gonna be 1%. But even that over 30 years is a 50% increase in energy consumption.

I'd be surprised to see developing countries that on the word agreeing to that kind of mother's growth rate, there will only materialize if prices have gone to 11 that actually The turf from energy consumption. But energy consumption is very much coagulated to growth of the economy, and I don't think anybody is going to Gladly embrace this. If you're kind to take you population as of poverty and into the middle class. But after that, you have to choose your energy mix. And if you don't want to increase oil and you want to good use gold. You don't want to talk about nuclear You putting it in a tremendous amount of pressure on the new nobles and Natural. Yes.

You can make whatever the assumption you want on the growth of when you would And that is its own limitations. But let's accept whatever whatever number you want a big it is going to still leave an enormous amount that is going to be incumbent on gas. I'm not sure we can do it. I will add one thing. There's a 10 to electrification today. So that's not says 500,000 cars and has a valuation of about $8 billion. Almost that means that their access to capital is enormous. But if you believe

the electrification and you have believed TV's out the future, the implication On the bow generation necessary in order to support this kind of growth. For E. V S is mine Bombing. So I think easy Example. Here in the United States, the governor of California has decreed that we are going to eliminate the combustion engine in California by the 2035.

That would require 100 gigawatts of additional power generation capacity. That's a doubling of the existing capacity in California. So it's nice to say this, but California is not going to put nuclear They're not gonna agree to code. I'm not quite sure. I mean, if you really start thinking in terms of the number of solar panels and the number of women's they would have to put in California to justify this kind of growth. Uh, and energy consumption it would you mind body? So No way have to stop confusing aspirations with practicality.

There are certain steps you can take. That unnecessary. I think it's a big mistake to underestimate the appetite of the developing world for energy consumption. And there's certain things you can do with a price on carbon. Absolutely.

Uh, encourages. Fatima was saying reforestation, even though it's daunting 250,000 per cargo. Maybe we can do a little bit better and plant more trees. But someone I've read that we need a trillion trees to gets to Uh, zero. Net zero. Well, let's get started.

Because I don't know that told some of the solution works in another conversation. Hold that if I can Please imagine I want to bring you in on this because I know it's an area that you're very passionate, too, about the growth agenda. And when we look in the West, actually, a lot of people calling for a complete overhaul of the energy system, and there's a sense of impatience around. But can the world actually pursue economic growth while at the same time really achieved the Net zero ambitions magic? What do you think? I think you know, I totally agree with what should, he said? I think part of the problem. If you look at the U N STDs, and I think they're

in excellent list for most developed countries, the only one that really matters is climate change. The rest of not an issue. But for most of the developing world, health, education, poverty or, you know, all of them are are an issue and energy access is actually a number eight. I think before climate change, we still have a billion people, almost with no electricity. Three billion people with no clean cooking. Relying on word and called on so absolutely the developing world is where the growth is, and it cannot be a Western message that Sorry. You're not allowed to have our standards of living.

I mean, that kind of hypocrisy won't fly that will be seen as a neocolonialism. On it can't just be sorry. You're not allowed to expect grid. Reliable grid power, you know, have a sonar solar panel on the battery and that'll be you done. It's not gonna work on. We haven't even you know, we're still really focused on Asia. Now Africa is coming.

S o. It does need to absolutely take into account the needs of the developing countries and I, for one thing that the developed countries will have to pay for it, not just lecture about it. There's no point spending a trillion euros in Europe when the demand growth is in is in Asia. It's like rearranging the furniture in the bedroom and

the living room's on fire. Yeah, I would have reported. Yes, it's It's very clear, Purcell to see them. Scott, if I could bring you back in here and in your report, also about addressing climate change must be an urgent global priority requiring global action. National commitments. Consistent policy

literary frameworks. But then you also say you believe that Deke organization actions will be determined locally based on the current structure and demands. I mean, it has to run in town them. You think to make sure that they rise together.

Very much, and I think I just would reinforce in that FEMA lot of one. Everyone is saying in the sense that in a developing world without access to reliable electricity, it's really hard to set the bar that they're gonna be de carbon izing their economy today for the hypocrisy reasons framed here. Now in parts of the world that have excess power and still availability of more space. More coal. There's an ability for Developed parts of the world to massively de carbonized as the U.

S has been doing, but they're also going to be parts of the world that are going to gravitate towards the media and that don't have the optionality for renewables because things like power density are just so critical for them to deliver the electricity that's needed that this is going to be a very local solution, and I think we have to look at a Heat map, so to speak of what every local place has available leverage that Gravitate towards a more electrified world while d carbon izing with intensity, But realizing that, um different places have different resource capability and And we need to balance that while While getting people access to a quality of life that we all can stand for. Sensible. I mean, a lot of companies are, you know really putting action in place. They're making commitments there taking action on we've seen, you know, a lot announcing the first green LNG cargoes. You know this, hopefully setting the standard for the future. But again, I mean, how quickly can LNG cargoes turned green and and there's going to be a cost associated with this. How do you see this playing out?

So We've we've heard about the green cargoes. Yet What happened to the market is just hum handful off deals and cargoes. On def We want to reach there then we go toe to make it something sustainable. A lot of work needs to be done.

Um, on many questions need to be answered. The first is around the transparency off such a green card goes and having a clear definitions and measurements off the emissions through the value chain. Off LNG or gas on even when we're talking about a credited, for example, offsets Now that the other part of your question around who pays for it, I think So far, we've seen producers pay for it. And on Bring it back to manufacturing fight. Don't you come in on this one? Yes, in terms of who pays for it? And also, I suppose when we look at you're looking at the demand picture and looking at at the cost on the volatility that we're likely to see in the coming years will ultimately it's always a consumer that baseball it one way or the other, Because if you increase the price of the commodity, or that's gonna happen, it's gonna be more expensive or people who needed and use it.

So, uh, it's absolutely to that in the West, Uh, We can probably save a lot because we can do a large to our great We can do a lot to our buildings. We can do a lot toe Garcia. We have the ability, but we're only 10% of the world's population. The other 90% needs to get out off. I was going to use a bad word, but the whole that there and you can imagine what I was thinking in terms of the prefects to the hole and and they want to get into the same living standards as what we have in Europe in the United States. And when you know that this winter friends reintroduce some coal plants in order to avoid blackouts. That Germany continues to T O Burn lignite.

That in the United States because gas prices have gone up by 60 70% in the last six months is gonna have an impact unless we do something about it on a resurgence off, Cole Generated electricity. And with that An increasing our emission standards, all the things I mean, it's nice to have good intentions. But in the end of the day's the practicality is not translated. We talk, but the actions Not exactly what we're looking for.

No, I would step back and say, OK, we need to do some things that are practical that have to that address the problem immediately. But if not Theo. Answer to your question is the consumer is going to play is gonna pay and if it happens to be the consumer in Indio in China, it's going to be catastrophic for them.

I'm Scott. If I could bring you in here and another part of your reports, very clearly says, you know, it's obviously you know, gives us the Biggers here in terms of cold, the largest fuel source for electricity generation Still in the world today, accounting for 37% of the total, Justus Shareef is saying there and, despite massive renewable investment, cold generation down only 10% good for gas. It's up 33%. But again, there's there's a lot of work to do here. And how do we actually How does the industry begin? To sort of? You know, Phil? Those gaps. I mean, that is the challenge, And it also is a capital challenge. I mean, every $200 trillion. There were $200 million that we're spending

is just increasing renewables penetration by about 1% a year. And, uh, that is gonna take a really long time to solve this problem in a world that also post a pandemic has budget challenges that play also so it comes down to how do we move the needle quickly? Its scale? Hold to gas can do that and also is exponentially our capital efficient in a world where that's going to be a big part of this equation, as we try to gravitate the world towards a better standard of living so Again. This is a very local challenge in different places. It's a lot. Why in our white paper and the podcast we're launching that people can see on g dot com. We're talking about a decade of action.

It doesn't mean we're not talking about 2050 and Net zero Their technologies that will continue to advance over the next three decades that we're not talking about, but there's a lot we can do now. And in that period of time, let's do it to buy yourself some more time, and that's a lot of what we're framing up and in the white paper. Indeed, yes. You know, when we look at the headlines, we would think that the figures were healthier than that. But I mean, it is. It's

the harsh reality of the way things are shit no off when coal to gas clearly is something I think that we need to happen. We want to see it happen. But how my natural gas displaced oil demand and, actually, oil production, of course. And what is this going to mean for You know yourself in Kuwait, indeed. And all of the GCC producers

Mm hmm. Would be Ask your man's will continue to grow as well as we were saying, uh, But it Still will not replace oil demand completely oil. The mass still remains the transportation. No. You still have a lot of oil demand that is not combusted. It is generated into Patrick ethical rules and Uh, another products. So

as we look to the future, looking at even a the oil side of the business, um you have a market that was pre pandemic about 100 million barrels a day. It's Probably around 90 or so now. Uh, but in any scenario, oil demand will continue to increase, at least for the next 10 and 20 years. Uh, but if you have, uh, less investment in supply Then you will have a finish you over supply on enough having enough supply to meet that demand, even if it is decreased. Hey!

2030 million barrels off the off the oil demand picture that is, uh, climb rates of existing fields will more than offset right you have to have additional investment. Same holds true for gas. Aziz. At kopeck. We're doing this and for McQuaid perspective, we're doing

this actually both on both sides of this this equation. Kuwait is a man who is an importer of LNG at comes back weak, LNG produced gas and we'll out around the world fact. Speaking about the work it today with the overheated market. I saw the cargo of elegy

today, which came in it eight points. Let's say much higher than we originally budgeted for this year, so that was actually quite good. But, uh Issue that becomes How do we put Yes, and on Doyle into this energy mix on ensure that we have the ability to meet the energy demands in the future, For example, on Downstream side of our business, Theo QA service stations that we have around Europe, especially northwest Northwest Europe. We are special flying quite a bit of the offerings that we have at this stage. It's not because we're trying to cannibalize The, uh gasoline and diesel demand that we see it at our service station. But it's also because Fleet customers are demanding that we have a full service of options available. So the point of that is that

While government subsidies and government regulation made drive demand for electrification on vehicles and other types of uses. It's not until consumer demand really takes takes charge that it makes a difference because Well, I've seen the statistics Norway, which has massive subs didn't sport. For electric vehicles doesn't make sense to buy a unturned combustion engine in knowing because of being subsidies that you get from from my electric vehicle.

That's why Norway had a for the first time last year, more electric vehicles set Seoul then I see engine in Norway. Take away that sucks it in and taken away in other places around the world. Take that away. You immediately see a drop in the cells. Ondas got was mentioning. Being Countries almost every country around the world right now printing money just trying to figure out how to keep their economies afloat in a pandemic. Uh, no budget. But silver's

you to pay for the types of subsidies that you're gonna need, so it's gonna have to be or consumer Demand driven and unless you can match it must have been offering economics, a solution that Meets. Uh, consumer demand and is competitive against Hydrocarbons. You're not going to see a judge fundamental change that will last. Yeah. I mean, so much needs to be done there, and it's something

again would be a different state from countries. Majid come in here. We had been talking earlier or two. And as you said, you know that the Middle East almost Found gas by by mistake when he was looking for oil, but perhaps in this region, as you said to, you know, Is there more growth for gas? More development for gas? I mean, is this just a good time to be looking at the gas market here in the Middle East because it's really not reached its maturity would you say? Yeah. I mean, our region has 40% of the world's proven National gas reserves. But as you said, most of that was discovered

looking for oil, and it's only really in the last few years, the last 5 to 10 years that organized has become a target for exploration and development. Here in our region in a major way, driven by the rapid growth in power demand and also for for industry and population growth. What we really need. I think to Uh, improve that development accelerated in our region is the right regulations to encourage investments in this part of the value chain. Because gas is obviously not like not fungible. You can't store it and Bond shit that is easily without energy infrastructure or five line So we really need the right regulations to encourage investment and in private sector investment, not just relying on state budgets.

In every element off the chain as well as clear and transparent pricing, you know, in the upstream on that will also require reform of subsidies downstream, particularly electricity subsidies, which is starting to happen, but it still has Further to go, and I think you know worldwide the three things that gas needs to get a potion and in many developing countries, it's air quality that's leading toe push for gas in China and India, for example. But the first is, let's be honest. That 100% renewables today won't work and for the foreseeable future, and therefore there will be an important role for gas and power. And that message really needs to be pitied here for the development banks on some of the private banks, who were turning their back on form, quote unquote fossil fuels and when they do that, and refused to invest in Gas and developing countries. You will have more burning of coal,

and you will have more Sio two emissions and it'll be self defeating the second one that would help sherry mentioned and others a carbon price would help. Bridge that gap because many of these developing countries without that cold will continue to be more competitive. In the third, I think is trade wars are not helpful if these countries don't have large enough domestic resources of natural gas, as in the case of China, for example or in India. And trade wars caused concern over security of supply that will put a dent in the growth.

S so I think those three things would go a big way, particularly developing countries on ensuring the coal to gas, which that complements renewable growth. And that has to be really looked at and paid attention to without a doubt. Now we're more than halfway through our panel on I haven't mentioned the H word yet. So, Fatima, come talk to me a little bit about this, and I know a few of you. I want to engage on it. And indeed a big congratulations to you know Abou Diaby, too, And not too and the work that they're doing it on the recent deal that you put in place there. Do you think that hydrogen and natural gas

will actually You know, compliment each other and that hydrogen is indeed you know the new future in the industry. And that's what we've got you on them on mute. Uh huh. Okay. So you know, I don't know why. Whenever there is a new kid on the block, it's natural gas that is always doubted that will exit the scene. I definitely hydrogen is a promising career for for for energy.

And as you just mentioned on Daz Express expected to be we always invest. Today for the future. We have, of course competitive advantage. We built some experience when it comes to elements that are required for the hydrogen industry to pick up. We have the natural gas as a as a resource for a blue hydrogen. As I said, carbon capture we've got the experience and this we have also must that which is a pioneer and then in the region when it comes to solar and renewable. S o. I think we're ready.

Position well and the region to lead when it comes to hydrogen development on did in the contrary, I don't think it's going toe push gas back. I think guys is required for hydrogen to pick up because blue hydrogen seems to be though that least the starting point. And we're Uh, I believe that there are going to be many partnerships. Uh, On developments for the future. But as I said, this is an investment we make today for the future. And we have to worry about today as well. S O reality remains as everybody in this panel just mentioned

realistic remains that today we have almost nine and And people do not have one and nine people do not have access to energy on do. You can just imagine how much potential this is holding back way all know that the Issue, which is the biggest consumer as well. They they have almost 50% off there.

Energy coming from cold, So I believe there is still a potential for God to remain, and I've heard that I think, and the audience heard that enough today and then this panel repeated by each each of us Um, but I want to refer to something I've heard yesterday with the day before. During His Excellency Dr. So fans the conversation with Thomas Um, there is no solution that fits all the energy mix equation is not an easy one, and it's not One line that we have to draw across every country and every region and every economy. What's affordable here is not affordable there. What's possible here is not possible there and as energy suppliers, we need toe.

Provide options and contribute to the potential of growth. Thank you, Scott. Talk to me about where G our seas Hydrogen at the moment and the future of it, the strength that you think is there Sure, I think from a technology perspective with gas turbines, the capability to burn hydrogen exists today. I mean, we are gas turbine Fleet has over six million operating hours of it. Blend of hydrogen.

And our most advanced age, a technology with new power plants were building the first H A plant that will run on a blend of hydrogen will be in November 21 this year. So the technology is there. It's just a matter of the economics of the stool, advancing to a point that it makes sense of scale. And that's gonna take time without question and It's also to the point is going to be from a combination of blue, hydrogen, green hydrogen, many variables at play to get us there. But we also talked about the fact that we have been wrong over the last 20 years for how quickly solar and wind costs will come down. Hydrogen costs are going to come down, also through innovation, and it's going to play a role.

That's a role that's going to take time and we don't want to just wait for the perfect solution. We want to use the technology. We have now addressed the problem to the best capability. What we have while keeping an eye to tomorrow in which hydrogen is gonna play a role, But let's just not wait for tomorrow. Let's act now in a decade of action today. And I think you know, at least people are talking about different colors on hydrogen and not getting so caught up. In terms of that. There's only there's only one that it has to be green, but sure it talk to me now in terms of, you know, do you see? Do we need hydrogen? It sounds like it's really expensive. It sounds like it's

In the future. I mean, do we have the time to wait? And when we look at the technology that's out there on the technology that we can Andre should deploy, and we've been talking about some of it in terms of C. C s u per violence that Where do you see this? Where do you see the future for hiding him? But I agree with Scott that we always underestimate the speed at which technology improves. That for me is that they is You can take for granted so it wouldn't become affordable.

There is one issue. But you can't get her home. It's the bothered them see. Part of demonic you. It comes from Ch four. It's wonderful to get the full H is but you've got to do something with the sea.

And in fact, you mice cases have a zit voice that can go stick it in the grounds. Uh, Other places. It's not that obvious. So until you resolve the issue of what you're gonna do with the carbon molecules And isolated and stick it in the ground somewhere. And building infrastructure to do that.

It's going to be He is very small solution to the rest of the energy makes If you don't have a depleted the guys avoid. There's nothing you can do with the molecule. You can do a little bit off industrial manufacturing. Yes. Within, you know, in the United States if you wanted to do a hydrogen plant and New Mexico Stick it and some depleted reservoirs over there and send the hydrogen to California that would work. You can't find a lot of Situations like this.

So The issue is gonna be. What do you do with the carbon and the infrastructure you would have to build in order to get rid of the carbon at the moment, it's prohibitively expensive. There's still a lot of work to be done. And then and maybe, you know,

In the meantime, yes is probably still the best answer. Natural gas As we know it is providing, like a lot of answers right now. Shake no talk to me a little bit about your recent project in Malaysia that you have announced to Andre while we're not looking at at hydrogen it all for Kuwait right now. We're certainly as you said, looking at carbon capture on that and also, but to making sure that you're going to be O. Clean gas from this. How are you actually going to do that?

Our guest What Orleans grown over the past few years. In addition to Week Stoner LNG project that we're in Australia. That is when the most efficient producers of Uh, LNG From a carbon perspective. We announced last year theme the discovery of a multi CIA Gas field offshore Malaysia. We're in the process of doing the appraisal

growing right now, and all indications are that it will be quite significantly more on larger than what we even issue of initially expected. It announced last year, so In the interest of making some news today that that is something that is quite large in our minds of one of the top finds over the past couple of years. But it's and it needs to be monetized and extracted in a real environmentally friendly way. And one of the we're working on is

looking at. How do we capture the carbon? Realizing the ball straight s So after the season U. S standards we're looking at what's the best way that we could use to, uh, Theo essentially sequester the carbon out of the out of the production and then use that technology and use that knowledge to bring in Our sister companies here in Kuwait, part of the ABC family of companies to bring in that type of Knowledge to Kuwait because, well, quitting production of oil lies at the left and low end of the Uh, the cost curve from dollar perspective actually lies on the low end and the left end of the carbon curve. So we are still one of the lowest carbon cost producers of hydrocarbons in the world, But we want to be even better. We recognize that in the future. Uh, if oil demand changes over time, we will still be producing because we lie on the low end of both of those curves that I just mentioned.

But it requires development of really effective cc us How to use that carbon not only just to sequester it, but even better to use that to replace gas as An injection, Uh, molecule into a reservoir. It's one underground oil reservoir to maintain reservoir pressure. And stimulates production Right now we have the international community uses gas uses order. Both of them are expensive, Andhra place that with effectively with carbon to inject into not just into a underground cavern and to sit there do nothing but instead Into a normal field. All reservoirs stimulate that production, then

that solves two issues and one action. And it is being done right now. Technologically, it is possible, but it's not very efficient and it is quite expensive something around my 30 and $35 per barrel to do that. Obviously, that doesn't make any sense any time soon. But as micro panels were saying, Don't underestimate how technology will drive the cost slower, and we're trying to work towards driving that cost lower so that we could do is actually two things at once.

I've only got about a minute left for each one of you. And you know some fascinating discussion here. Imagine, if been sort of wrapping up. You can combine a few things, perhaps together with us in the question here from Stephen Green, and just following on from what shape now off was just saying there. I mean, it is. It's expensive and this is investment on technology is absolutely essential. And we also look at the banks really paying attention to yesterday, all of this in place here, but you know, once these new generation assets are put in place, How can this is coming from Steven Green? We prepared to de carbonized them in the future. On what commitments are the industry making to make

sure that they can do it? You happy? There's enough commitments there, So I think you know the risk we have his year after year. There's a new buzzword or new. You know, everybody's talking about every year and they're all great, but they will require a lot of investment. On a lot of time to be able to scale on bare our limits to where the costs will go down. There's unfortunately out there thinking that energy is the same as mobile telephony or computing, and you've got some Moore's law on the cost reductions will be infinite and endless. That's not the case. We're getting close to limits when it comes to solar

On wind. So the takeaway I have. It's absolutely important to make those investments for the long term. But we need to take steps right now. To prevent the growth of emissions That's still happening this year despite the pandemic in Asia because of coal and natural gas is the obvious way to do that, But the world has to take certain steps to make sure that happens. Because at the moment is theirs under investment, and it won't happen.

And that's my combined This too, for your closing remarks with the question. And this, too, from Salma Al Gore, Donny, um particularly with LNG and operations. Where do you see the demand growth for? L injury happening mainly on do you know how is not benefiting from the moment spot prices at the moment? Um no S O l N g. And all scenarios, even the scenarios that is the most optimistic When it comes to renewables. You still

see growth happening in gas and and more specifically, when it comes to LNG LNG has this advantage and specially now, with If it's our use, making it accessible to countries that were not part of that. The list of important countries and on that club is growing day by day by day, so the potential is really great. And as we've hurt Multiple times The benefits are there and available now immediately, and you can sense them and feel them as a soon as you integrate gas and energy into your energy mix. Thank you, Sheriff. When we look at, you know, we've got about a

minute each for the last three speakers. What do we need to do? What is the industry need to do now? To sort of future proof it in many ways. Unfortunately it now What we need to do is be patient because nobody listens to a preacher. Everybody listens to somebody with him on the head with a stick.

So and the stick is going to be the pricing today. Future prices for 2021 Europe of slightly north of $6 and Future prices in Asia. In spite of what just happened on average is $9 that is not sufficient to justify the construction off new LNG facilities around the world or new pipelines. My field is for the next Several decades. Given that we need to increase 150 million barrels equivalent. We don't want to think about anything else. Except when you bols, we're gonna have a serious short.

And we're gonna have a serious press reaction. We will not have enough gas to deliver what is required of us. Nobody wants to see that situation. Yes, picture on that. We're going to have the worst. Turn around where I gotta wrap you up on this one. Forgive me. We're gonna be watching What you talked about What

you write about in the next violet listening, Very careful. Know what's just closing word from you in terms of the future for gas and its role in terms of net zero. You are you optimistic? I'm not mystic moment Gas is going to play. I think one of the things that we have to watch out for in the future is, Is there going to be a decoupling of the gas price and that and the gas market from economic activity? I mean, typically from the oil in the oil market, Steve it follows economic activity.

Right now you're starting to see potentially couple of gas from oil crisis and then also the question then becomes. Are we gonna be couple that from comic innovation that if it if the world economy moves and continues to expand Is there going to be Gassman that that will be decreasing? I think no, I think the answer is at least from bag. The interim period that meat, middle period of 10 years or so 10 or 20 years.

Go find that gas demand will continue to increase. One of the points that she was making, for example, is right now is everybody in the world moves towards a per capita usage of electricity and gas? As in Europe in the EU that will entail an increase of 50% above today's electricity. So a lot of play for here. I need to get this last minute to Scott. Round it off for a Scott. I just say GS, but a leader in the electricity space for over 100 years we've played in coal gas nuclear. Today we have a big wind business. We're committed to onshore and offshore.

We make inverters for solar panels. We believe that the climate crisis is real, But gas is going to play a critical role in this along with wind and solar, and we're investing heavily in our gas business because of a lot of what we've talked about in the last hour, so It's going to take a lot of answers. Gas with renewables is going to be a key compliment in that, and I appreciate being part of the part of this discussion with my co Panelists. The super and thank you all so much, And they're gonna be very thrilled with us that we came in right on time, too. So I was, You know, we never promised complete answers to everybody out there, But I really want to thank you for your red expertise and your inputs. Data about

check now off, Maggie, Sheriff and Scott. Thank you all so much. Or being part of this. This we have to wrap it up now, and I have to hand back continuing programming with the Atlantic Council on Dan Murphy, correspondent from CNBC is standing by and I know he's going to have Conversation with Irena. So, Dan, I'm gonna hand it over to you.

2021-01-28 08:28

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