In recent years, the transition to a low carbon future has shifted from being a topic of debate to a matter of urgency for many companies in the oil and gas sector. There’s an array of European-based fossil fuel companies that have proactively been pushing toward green energy, such as Dutch Shell, BP, Equinor and Total. While it’s likely to be a while before we transition from fossil fuels completely, we have seen more investment in green energy, for example in the form of Vestas Wind Systems – which is the world’s top supplier of wind energy. The oil and gas market is highly volatile, so it makes sense that businesses focus on and embrace renewables. But what can oil and gas companies do to prepare for this transition?
The changing energy landscape
According to We Forum, renewables could power the world by 2050, with various studies showing how different countries can work together to create sustainable energy solutions. Over the years, the standard of living has increased dramatically, which means this has affected the demand for global energy. Oil and gas prices have been in decline since 2014, which was accelerated by the COVID-19 pandemic. This further fuels the argument about the importance of green energy and why companies need to prioritise renewables. Also, renewable energy has become much cheaper than fossil fuels. The cost of solar power projects has fallen by 82% since 2010. Renewable energy projects were once notorious for their high costs, but they’re now below traditional fuels – which demonstrates how much the energy landscape has shifted. Now’s the time for oil and gas companies to adapt to a less carbon-intensive strategy. But how?
Paving the way for the renewable revolution
Many oil and gas companies are moving forward with the renewable energy transformation and there’s a range of different projects on the horizon. For example, BP partnered with Danish energy firm Orsted to launch the Green Hydrogen project, which is expected to be operational in 2024. Comprising of a 50 MW electrolyser system installed in North-West Germany and powered by an Orsted North Sea offshore wind farm, it will be able to produce around 9,000 tons of green hydrogen per year. This project is BP’s first full-scale hydrogen venture and the company could help massively with reducing emissions.
Green hydrogen is created using renewable energy, which is made through electrolysis. Mitsubishi Power and fuel storage company Magnum Development has been working on the Advanced Clean Energy Storage (ACES) project, which is scheduled to be operational by 2025, and it aims to build a storage facility for 1,000 megawatts of clean power. Having large-scale storage space for green energy will help curb the demand and increase the transition to renewables. Investing further into creating a pathway for renewable energy is a great way for oil and gas companies to embrace a green transition.
Protecting the environment
Oil and gas companies will always be needed, but the future lies in renewables. However, it’s not enough for companies to invest in green energy to protect the environment. There needs to be a mindset shift internally. One of the ways oil and gas companies can do this is by redefining their corporate strategy to align more effectively with climate change. For example, ensuring that best practices are applied for mining and drilling projects will help reduce water and environmental impact from production. Businesses also need to build strategies that minimise carbon use, as well as developing a talent attraction framework that showcases oil and gas as a ‘green sector’, in order to inspire the younger generation of workers to join the industry. The oil and gas sector is under increasing pressure to become more sustainable, but with the right investment and strategies, companies in the industry can embrace a green transition.
Let Petroplan help your business
Petroplan is a specialist talent workforce and solutions business that has over 40 years of experience in recruiting the top professionals into roles within the oil, gas and energy industry. We have an outstanding track record of building great relationships with our clients and candidates, and we have a strong understanding of the energy sector, including renewables. We’re always up-to-date on the changes in the industry and are well-placed to advise companies on how to recruit the best talent, in preparation for the changes over the next few years. At Petroplan, our consultants are dedicated to helping businesses develop and grow. Contact us today for more information on how we can help and keep reading our blog for interesting articles and insights.