Hydrocarbon Processing - January 2021 - 40

Sustainability
to " big energy " companies with a broader
and more diverse portfolio. Any delay in
this transition may challenge the industry's license to operate in some regions.
Therefore, longer-term success is dependent on proactively driving this transition
rather than being a major carbon contributor. Key solutions include electrifying
offshore platforms and oil and gas assets,
reducing flaring and venting, increasing
efforts to detect and stem methane leaks
and obtaining efficiency gains through the
digitalization of the oil and gas value chain.
A cleaner, greener energy mix. As
the demand for natural gas declines from
the mid-2030s, this outlook points to
three pertinent predictions:
1. The amount of natural gas used
for power generation will start
to decrease as renewables scale
significantly and electricity is
increasingly used to replace
natural gas in sectors where
it is feasible to do so.
2. Natural gas will become partially
decarbonized through gas
reforming, with carbon capture
and storage (CCS) to produce
blue hydrogen, resulting in rapid
growth toward 2050.
3. Hydrogen produced from
renewables (i.e., green hydrogen)
will join decarbonized gas in
replacing some of the final
demand for natural gas, largely
in hard-to-abate sectors such as
steel, cement, aluminum and
glassmaking processes.
The outlook forecasts that 13% of
natural gas will be decarbonized in 2050.
This follows rapid growth in hydrogen
production from natural gas, and of natural gas with CCS in power and industry
sectors over the next 30 yr.
In terms of lowering the emissions of
natural gas consumption, the forecast asserts that hydrogen-produced from fossil fuels with CCS and from renewables
via electrolysis-will supply 23% of enduser demand for gas. Around half of this
hydrogen will be produced from fossil
fuels in 2050-with approximately 70%
coming from natural gas. The other half
will be produced from electricity derived
from predominantly renewable sources.
Both the decarbonization of natural gas
through CCS and the use of hydrogen as
a vector to reduce emissions from natural
40 JANUARY 2021 | HydrocarbonProcessing.com

gas consumption will be led by Europe,
China and North America, and by Pacific
countries that are members of the Organization for Economic Co-operation and
Development (OECD).
The transition to decarbonized and
green gas, with related scaling of CCS
and hydrogen, will not be quick enough
to meet the goals set in the Paris Agreement, as neither CCS nor hydrogen processes will begin to scale for at least 15 yr.
Although the technology is available and
viable, the policy framework is only now
just taking shape in selected regions. Governments must quickly incentivize industry to adopt these solutions to climate
change (such as through a competitive
carbon price), so that the cost-learning
curve will become financially viable.
Proactive partnerships and policies
are vital. Forming partnerships among

government, industry and associations
will be crucial in scaling innovation and
new technologies for decarbonization.
Public energy strategies are key, not just in
setting out the path for the world and the
oil and gas industry to reduce and remove
carbon, but also in deciding how fast the
world will reach that destination.
The outlook points to policies in Europe, China and North America to create the impetus for scaling hydrogen and
other low-carbon fuels globally and to
propel recognition that scaling CCS will
be essential to meet climate targets. Such
policies are influenced by the available energy resources and by societal pressures,
which include rising concerns over climate change and calls for cleaner energy.
Some of these policies will affect demand for existing oil and gas products
and will drive companies to reduce their
carbon footprint-while other policies
may completely transform the oil and gas
industry. Ultimately, these policies could
transform the oil and gas industry into
being the decarbonizer of hydrocarbons
and the supplier of CCS. The mid-2030s
is estimated to be the point at which these
policies will begin to act as a catalyst for
this transformation.
All regions are balancing decarbonization with the need to ensure an increasing
supply of secure and affordable energy. In
Europe, net-zero targets have launched
the region's energy transition, and these
efforts are now being extended to hard-toabate sectors. The European Union (EU)

is also considering a CO2 border tax that
would extend a price on carbon to include
imported products. Greater China's emissions reduction trajectory is also vital to
the global energy transition. From 2030,
the region will account for more than half
of the world's net emissions reductions.
A patchwork of policy targets and
incentives at state and federal levels in
North America will drive decarbonization through increases in renewables and
electrification, and, additionally, by lowering the carbon intensity of fuels. Policies in the Indian Subcontinent, Southeast Asia and Sub-Saharan Africa regions
will largely focus on the transition from
coal to natural gas, and on growth in
renewables and electrification, thus ensuring the regions' increased energy
independence and their ability to meet
growing pressure to curb local pollution.
Urgent action required. Pressure is

mounting on the oil and gas sector to address the climate change crisis. However,
while the move to greener gas will help to
significantly reduce emissions, the forecast doubts that this will have much of an
impact on meeting the tough goals set out
in the Paris Agreement.
Ultimately, realizing a brighter, greener
future for the energy mix requires quicker
transformation of the industry. Although
leaders, innovators and regulatory bodies
are making some headway in putting this
energy transition at the top of their agendas, climate change and their ambitions
to reduce it are outpacing action. The
benefits of the energy transition are clear
and achievable, with hydrogen and CCS
complementing renewable electricity, advanced battery technology and alternative
low-carbon fuels.

LITERATURE CITED
1 DNV GL, " ENERGY TRANSITION OUTLOOK
2020-Oil and Gas Report: A Global and Regional
Forecast to 2050, " October 2020, https://eto.dnvgl.
com/2020/oil-gas/
FRANK KETELAARS is the Director
for Oil and Gas Operations for DNV
GL in the Americas region. His
responsibilities include oil and gas
operations in the U.S., Canada,
Mexico, Brazil, and Trinidad and
Tobago. His experience covers
verification and advisory work for offshore and
onshore operations, with a focus on safety and
regulatory compliance, integrity management and
performance improvement. Mr. Ketelaars earned an
MSc degree in electrical engineering from the Delft
University of Technology in the Netherlands.

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