30/01/2020
Earlier this week, AAPG IFP Student Chapter organized a talk with the topic “Climate change and the oil and gas industry: Conflict or Cooperation?” Our speaker Ray Leonard, described the current situation very clearly by giving us solid shreds of evidence on climate change.
Fossil fuels have led to a profound increase in world living standards but the emission of carbon dioxide and methane into the atmosphere from their use is a primary factor in climate change. Atmospheric content of carbon dioxide and methane has risen 146% and 257% since pre-industrial time and the rate of increase is accelerating. Climate change appears to have three phases; until 1980, the increasing greenhouse gas content in the atmosphere appeared to be absorbed with little or no effect on the climate. Since that time, the effects have become increasingly clear and severe in multiple ways. A third phase may be reached in the 2030-2050 time frame, described as a “tipping point”, in which the steady changes may be replaced by a large-scale change in the climate system. In order to forestall or at least delay (in order to prepare) for that eventuality, it is imperative that the oil and gas industry actively join the global transition to a lower-carbon economy.
Fossil fuels currently account for more than 80% of world energy. There is, however, a substantial difference in the level of CO2 emissions from different fossil energy sources. The lowest level is from natural gas and ultra-light oils, including natural gas liquids. Liquids produced due to “fracking” are 85% ultra-light. Natural gas production has increased from shale gas plays and as an associated product from tight oil plays, and from new super-giant gas discoveries. By 2030, 25-30% of world liquid production will be ultra-light oil, including NGL’s. However, in the rush to development in the USA, the potential benefits of the low-cost gas and ultra-light oil production have been undermined by the increased flaring and methane emissions coupled with the relaxed regulatory environment of the current administration. Greenhouse gases emitted by fossil fuels would plateau and decline if coal production is substantially replaced by natural gas over an approximately 20-year period combined with a plateau in oil production within the coming decade. World economic growth should be able to continue to increase at its current pace with the combined growth of natural gas and renewables plus nuclear energy sources. The urgency of reducing greenhouse gas emissions, particularly CO2, in the next two decades leaves no real viable option, given the economic growth that will occur in the developing world, to replacing coal with natural gas in a transitional phase.
The following actions are currently being implemented on a limited and inconsistent scale (some companies have progressed much further than others) by the oil and gas industry, but need to be accelerated on a global basis in order for the industry to be viewed as part of the solution in the transition process: (1) acceptance of climate-change science, applying all of the geoscience tools we have developed to understand the process (2) accelerated shift to production of natural gas and ultra-light oils (3) reduction of CO2 and methane emissions from operations, (4) eliminating natural gas flaring and venting and (5) increased research and application of carbon capture, use, and sequestration (CCUS).
Ray Leonard is currently President of Anglo Eurasia LLC, a consulting firm for the Oil and Gas Industry. He has held executive positions with Amoco, FIOC, the Russian Oil Major YUKOS, the Hungarian National Oil Company MOL, and the Kuwait Energy Company and was most recently Chief Executive Officer of Hyperdynamics, an NYSE-listed independent oil company exploring for oil and gas in West Africa. He has been active in publishing and presenting on world oil and gas reserves, the oil and gas industry in the Former Soviet Union, and climate change for many years, presenting and publishing at forums such as Council on Foreign Relations (1994 and 2014), Center for Strategic Studies (2001), International Energy Agency (2003), the AAPG Hedberg Conference (2006), Aspen Forum (2008), Emirate Center for Strategic Studies (2013), the 26th World Gas Conference (2015) and the World Economic Forum at Davos (2019).
IFP School and IFP School AAPG Student Chapter are very delighted to have him on board with us this week. Thanks to Lerat Olivier, our program advisor for the Geosciences department; and Eric Deville our AAPG IFP Student Chapter advisor, we managed to have an informative session. Thanks to all AAPG members of IFP School, this event was a great success! AAPG Student Chapter of IFP School is looking forward to holding more interactive events like this with the energy industry professionals near the future.
