Is clean technology reshaping the oil industry?
At a recent event in London, the BP chief executive and chair of the oil and gas climate initiative highlighted the extensive progress within the oil industry. Bob Dudley took this time to announce the first projects to secure funding from the fossil fuel coalition climate investment program. This includes a carbon capturing and storage project, a low emission cement production, and a high-efficiency vehicle project.
The event included some of the major players within the oil industry, discussing the development towards low carbon technology within the oil sector. It is promising to see the leading oil businesses supporting the transition towards low carbon services. However, energy experts believe the transition isn’t as rapid, nor as critical as it could be.
Pratima Rangarajan, the CEO of the Oil and Gas Climate Initiative (OGCI) believes the main goal of OGCI is to invest in new, cost-effective technology to reduce overall emissions. Rangarajan believes that there is urgency within the oil sector but admits the impact of any investment will not be seen until projects are expanded globally.
The announcement of the oil industry support towards low carbon technology was challenged by climate and environmental experts, suggesting that not enough has been done to support the development of low carbon and carbon-capturing technology.
The OGCI has announced that there is an additional investment project in partnership with the U.N and EDF to develop a global methane study. The aim of the project is to develop zero-methane emissions from the gas value chain.
Reducing methane leaks within the industry is one of the biggest and cost-effective opportunities for reducing the impacts of climate change. Figures produced by the International Energy Agency suggested it is financially possible to reduce oil and gas methane emissions by three quarters with the current technology and achieve this goal at no additional cost.Energy experts have urged companies within the OGCI to set ambitious targets to tackle methane leakages within the oil and gas industry.
Dudley highlights that the collaboration of ten rival oil and gas companies is a major step towards developing a low carbon investment program. Each company is currently involved in a range of investment programs in renewables and low carbon transition. OGCI companies have invested nearly $20 billion into renewables within the last five years and an additional $3bn into research and development within the clean-tech industry.
Dudley admits that more can be done in this area and believes that whilst renewables is a major focus of transition, the issue cannot be solved with a complete focus on renewables, suggesting we need a combination of renewables and oil and gas.
An additional part of the Climate Investment program is to gain support for low carbon technology from external investors. This could potentially enhance the investment commitments from the OGCI, which have been criticised by environmentalists. Current plans include a collaboration with Energy Impact Partners, which consists of major utility businesses such as the National Grid, TransCanada and OGE Energy.
This recent announcement does signify that the low carbon investments could be boosted beyond its ten current members, which environmental leaders believe is essential in making the aim of the program truly effective.