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Carbon capture, storage vital for successful energy transition

Sep 11, 2019
4 min read
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Gas and renewables will be the only energy sources for which demand is higher in 2050 than its is today.

However, according to a new forecast by energy industry technical advisors DNV GL, they must work together to ensure a greater uptake of carbon capture and storage (CCS) to secure a rapid energy transition.

The 2019 Energy Transition Outlook provides an independent forecast of developments in the world energy mix to 2050. By this time, gas will account for nearly 30 per cent of the global energy supply.

The outlook states there is no single pathway to a decarbonised energy mix.  But a combination of energy sources – primarily gas and renewables – will be the quickest route to delivering a supply of affordable, decarbonised energy in the lead-up to mid-century.

As gas secures its place as the world’s largest energy source from the middle of the next decade, its production and consumption must be decarbonised to help achieve national and international targets for climate change mitigation.  CCS – the only currently-available technology to deeply decarbonise hydrocarbon use – will not be employed at-scale until the 2040s unless governments develop and enact more definitive policies on its use,says the report.

“All major routes to successfully decarbonising gas rely on the large-scale uptake of carbon capture and storage. The future of CCS largely lies in the hands of policy-makers setting a higher carbon price than the cost of the technology. Industry can also play a role in stimulating quicker adoption by focusing on finding ways to reduce the cost of CCS technology,” said Liv Hovem, CEO, DNV GL, oil & Gas.

“The energy industry must however also shift its mindset from ‘gas vs renewables’ to ‘gas and renewables’ for success.”

Approaches to integrating hydrocarbon and renewable technology for decarbonised gas production and consumption include the introduction of new, carbon-free forms of gas, such as hydrogen.

DNV GL also highlighted power-to-gas, with existing gas pipelines used to transport hydrogen produced from electrolysis of seawater using offshore wind power, or from offshore-based methane reformers, along with gas-to-wire, where gas is used to produce power offshore for transport to shore via nearby windfarm cabling.

Offshore platform electrification, with offshore windfarms installed nearby, so platforms can import renewable electricity directly is also a factor

According to DNV GL’s analysis, global oil demand will peak in the mid-2020s and gas demand will keep rising to 2033. Gas demand will then plateau, and the fuel will remain dominant until the end of the forecast period in 2050.

Significant investment will be required to ensure production meets demand, including realising the potential from stranded gas reserves and for reserve replacement. DNV GL forecasts global upstream gas capital expenditure to reach US$737 billion in 2025, and US$ 587 billion in 2050.

Other forecasts for the future of natural gas include unconventional onshore gas  to increase from 2019 through to the end of the forecast period, growing by 68 per cent from 2017 levels with production will principally to come from North AmericConventional onshore gas production will be maintained at today’s output rates until the late 2030s. It will then decline slowly to mid-century, while offshore gas production will rise until 2040, when it will be 58 per cent greater than in 2017. In 2050, it will still be more than a third higher than in 2017, with the Middle East and North Africa providing the greatest production volume.

Power generation will be the main consumer of gas in most regions, challenged by manufacturing in China, India, and Latin America.

DNV GL highlighted that the long term, sustainable future of the oil and gas industry is dependent on its license to operate today.

“Our sector will only have the opportunity to decarbonise if it maintains society’s trust through a sharp focus on safe operations and environmental performance. Companies’ ability to display the highest standards of safety and sustainability today will win the public support that the industry needs to decarbonize for tomorrow,” added Hovem.

 

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