In the last few weeks, it has been announced that H.E Sultan Al Jaber, Chief Executive of the Abu Dhabi National Oil Company, will also take centre stage as COP 28’s President. Whilst many climate activists have been angered by the decision, this could arguably be one of the best ways for the Oil & Gas industry to showcase the crucial role it plays in emissions reduction and energy supply and finally play a real role in delivering results.

Recent EIA forecasts show that world production of petroleum and other liquid fuels will increase by 1.1 million barrels per day in 2023 and 1.7 million b/d in 2024, reflecting large growth in several non-OPEC countries. In addition, the United States and other non-OPEC producers outside of Russia will add 2.4 million b/d of oil production in 2023 and an additional 1.1 million b/d in 2024. Meanwhile, global GDP growth (based on forecasts from Oxford Economics) will rise from 1.8% in 2023 to 3.3% in 2024.

These numbers show the growth of both global supply and demand. The bottom line is that, despite the increasing penetration of renewable energy and the progress of the low carbon transition, oil and gas demand is projected to increase until 2035, and potentially beyond, as developing countries demand more energy.

The Oil & Gas Industry’s Quiet Decarbonisation Story

Whilst oil and gas will be included in the energy mix for the foreseeable future, even if the nature of that picture – shaped by a range of market and geopolitical concerns – is decidedly different than it has been in the past, there is no doubt that the industry is adapting and re-defining its role in the transition showcasing a myriad of different pathways towards decarbonisation. But they are doing so quietly. The inconsistency on behalf of the industry to frame a successful narrative around its value in a decarbonizing energy system has allowed there to be a consistent lack of energy literacy amongst the wider public and, perhaps more importantly, the press. A 2019 Boston Consulting Group (BCG) report framed this issue pointedly, arguing that:

“Many oil and gas companies are highly skilled at building localized support for projects or specific issues. But they have not sufficiently developed compelling narratives about their role in the transition to new global energy systems.”

There are hundreds of examples of major company-level and industry-wide initiatives focused on the commercialisation and scaling up of net zero technologies, including decarbonizing technologies to target Scope I emissions and large offset programs to address Scope II and Scope III emissions. In an article at the end of last year written alongside Crescent Petroleum, we extolled the virtues of the potential for gas to serve as a low-carbon baseload and indeed act as an intermittency solution to renewables. Going one step further, if gas can be combined with CCUS to further lower the carbon footprint, or if upstream electrification can be used to further decarbonize gas production, there are additional opportunities to decouple gas from oil and gas branding as a fossil fuel and convert environmental pressures into assets, positioning gas as a tool in the low carbon transition rather than a roadblock.

Developing decarbonized oil and gas is a key strategy that the industry is deploying in response to the low carbon transition. CCS offers another avenue for decarbonizing hydrocarbon production through capture at the wellhead and hydrocarbon use with capture at the point of generation, whether in power generation, refining, petrochemicals, or industrial use. In addition, hydrogen is one of the most promising pathways for decarbonizing petroleum. Options include “blue hydrogen,” combining naphtha or natural gas steam reforming and CCS, or “green hydrogen,” leveraging “electricity to liquids” electrolysis from solar or hydro-electric power. Either process results in a zero-emissions liquid fuel with greater energy density and, as such, is better able to power heavy transportation than batteries.

Oil & gas companies, small, medium and large are also busy embedding climate based ESG principles into their business models. Whilst more work is needed on standardisation, working within ESG frameworks allows heightened transparency at every level of the organisation as well as for investors and other stakeholders.

The Oil majors, despite their core business being O&G production, are among the largest investors in clean, low carbon or decarbonisation technologies in the world, yet their commitments are underreported. bp has committed $5 billion annually to clean energy investments by 2030, with Shell committing a similar amount; TOTAL Energies has agreed to channel 10% of its revenue towards clean energy investments; while the likes of Aramco’s partner company ACWA Power has committed $30 billion to renewables projects. ExxonMobil also recently highlighted its $15 billion of investment into lower-emissions technologies. And let us not forget, the Oil and Gas Climate Initiative (OGCI) led by thirteen of the largest international and national oil companies. OGCI supports both a venture capital and research and development program for net zero technologies as well as supporting policy frameworks to enable net zero.

Back in 2021, I quoted H.E Sultan Al Jaber at the World Energy Capital Assembly’s Awards of Excellence when he said: “We must progress with pragmatism. In order to prepare ourselves for the energy system of tomorrow, we must support and invest in the energy systems of today”. In my opinion, this is well said, but whilst there are countless examples of real innovation, real spend and real change in the energy systems of today, the overriding narrative in the press is still one of oil & gas vilification. As climate activists continue to affect financiers’ capital allocation strategies, shareholder reputation and the general public’s perception, is it not time for the oil & gas industry to shout louder? What role can we play as an industry to have a voice that is more widely heard? The Oil & Gas industry is rich in resources, in science and in technology – I am sure there is more we can do to educate and to advocate.