DENVER, Colorado—Reaching net zero emissions by 2050 may be a goal for nearly every company associated with oil and gas, but it’s becoming clear that E&Ps can’t hit those goals alone.
Speaking during the opening plenary session of the Unconventional Resources Technology Conference (URTeC) on June 13, executives emphasized the need for collaboration between different industries, governments and fellow competitors in order to achieve net-zero emissions goals by 2050.
Developing technology is not enough for the oil and gas industry to overcome the “valley of death” it faces, Amy Henry said, CEO of Eunike Ventures, a Houston-based technology company. While Henry acknowledged she isn’t completely sold on the idea that net zero emissions goals will be reached by 2050, she said inter-industry collaboration is the key to at least getting close to those goals.
“Energy has its own valley of death to cross over, so in terms of mindset, do we have a collaborative mindset?” she said. “Because a lot of these technologies are not going to come from within the energy vertical. They're going to come from other verticals like biotech, space and aerospace.”
Neil McMahon, managing partner at private equity firm Kimmeridge Energy, is already seeing some of the fruits of collaboration within the energy industry. McMahon wants to “make unconventional resources investable in a low carbon world” and is beginning to see that through the prioritization of ESG objectives.
“But one of the big things we’ve found is through peer pressure, through activism…you can do things such as planting trees and generating offsets to offset your emissions. You can take this industry forward, up until the point where hydrocarbons are no longer needed or priced out of the market,” he said. “Unconventional resources are required to meet global energy demand. We just need to make them investible and they need to be relevant in the current world.”
Clay Gaspar, COO of Devon Energy, shares a similar mindset with McMahon, as raising the “investability” of unconventional resources as part of a three-pronged approach to the company’s sustainability efforts.
“We have to make sure that we are always raising not just our investability and our economic standards, but our environmental standards as well,” Gaspar said. “We have long-term goals, but in our first prong, we're thinking a whole lot about control[ling] the controllables: driving down our Scope 1 and 2 emissions.
“How do we flare less? How do we drive down our greenhouse-gas emissions and really think about our facility design to make our emissions significantly better?” he said. “We're making money on those, so they’re pretty easy decisions. It's a matter of prioritizing, applying the right technology and understanding.”
At Hess Corp., the company is embracing partnerships to address emissions, said CTO Rob Fast. He noted that Hess is working with Guyanese officials to store greenhouse-gas emissions and prevent deforestation.
“We are sharing data…we're gathering in the field and trying to collaborate, to understand which methods for reduction and storage work, which ones may need help and how do you tie these disparate sources of data together to really understand and control and reduce emissions?”
Fast said Hess is also investing $750 million in Guyana over the next 10 years to prevent deforestation, which could account for up to 20% of greenhouse-gas emissions going forward.
Teamwork seems to be the only suitable course of action to reach the emissions goals within the energy industry, panelists said.
As Gaspar put it: “The only thing smarter than a single one of us is a collection of us. The only thing smarter than a collection of us is a diverse collection of us.”