COVID accelerating progress in the energy sector

With loss of life and liberty mounting daily, it is difficult to find anything positive to say about COVID. Yet, as is often the case in war, this conflict is accelerating scientific and technical progress.

The remarkable speed with which the world’s scientists and medics have collaborated to create, approve, manufacture, and now distribute a vaccine in huge quantities is perhaps the most shining example of what can be achieved when, out of necessity, the various parties act in concert. A process that would normally take a decade has been completed in under a year.

But technology in general has risen to the challenge, not least in an oil and gas industry that was already under pressure to clean up its act in the face of growing public and investor concern over pollution and climate change. The major companies – suffering additionally from a slump in the oil price because of lack of demand due to COVID – have been compelled to respond.

At the start of 2020, CMS, the specialist international law firm, published a report examining the energy transition strategies of the world’s largest oil and gas companies to assess how far they were committed to new and alternatives energy sources. The report found that only 3% of capital expenditure budgets was being invested in renewables.

Eleven months on, ‘Energy Voice’ reports that global investment in renewables is, for the first time ever, outstripping the amount of money going into traditional oil and gas projects. The transition to a greener future is suddenly under way, which must be a good thing given that oil typically accounts for 40% of global CO2 emissions.

Strategic alliances are rapidly being established between some powerful forces. Shell, for example, has undertaken to supply renewably sourced energy to Microsoft in a project that will see the development of artificial intelligence software and digital tools that ultimately will improve onsite safety. Shell is also working with Wells Fargo to power 1,200 properties in California

Elsewhere, BP is financing offshore wind projects in the US. Here in the UK, the Acorn Project, which involves a mix of different technologies, began as a carbon capture and storage project. Now we learn that it is likely to lead to blue Hydrogen production.

Proof, then, that the pace of change is accelerating, albeit that meeting net zero targets will still represent a huge task for the giants of the industry. That said, every company, irrespective of size, has a useful role to play.