Galp Petroleum Engineering Open Days Debate on Sustainable Energy

“This event has turned into a classic”, began Galp´s CEO, Carlos Gomes da Silva, at the closing session of Galp Petroleum Engineering (GPE) Open Days 2018. For two days, the approximately 300 participants, both Portuguese and foreign, had the opportunity to give their opinions on and discuss the central issue of this fifth edition of the event: environmental sustainability, comprising energy transition, the challenges facing the industry on a global scale and their role in sustainable development. As far as Thore E. Kristiansen, a member of the Galp Board of Directors and Executive Committee and head of E&P business, is concerned, this was “a fantastic opportunity to discuss, collaborate and learn from one another”. Moreover, as he underlined in his opening speech, “sustainable solutions for the future need to be found”, specifically in relation to the decarbonisation of society with a focus on innovation, and “our industry”, he guaranteed, “is both a part of the problem and a provider of solutions”.

GPE Open Days was held in Lisbon on 02 and 03 July, and featured almost 50 speakers. One of the most talked about issues was energy transition, and the approach to the same presented by David Hobbs, director of research at KAPSARC– King Abdullah Petroleum Studies and Research Center. His presentation, “Short and long-term balancing of the oil market through energy transition” brought a short and long-term vision of how the oil market is going to perform and balance out, subsequent to the crises of recent years, in relation to supply, price and investment. He also stressed that “the paradigm of energy security is changing, from physical availability to the volatility of the price”, and that, as such, the economies need to be protected. Hobbs also pointed out that the future is both unknown and a major challenge at the same time, and, as such, should be viewed with humility and low expectations as a means of appreciating any small achievements registered. Moreover, with regard to the energy solutions we possess today, he left the subconscious message that we shouldn´t “end relations with what we have without finding something better first”. To fight climate change, he said, we should not be focusing on the source of fossil energy itself but on the emissions of this energy, emphasising the vital role of investment in technology in this field.

The speaker Harrie Vredenburg, a director at the University of Calgary (Canada), in whose opinion these events “are extremely important, not only for business but for political decision makers as well”, opened the second day with the lecture “Post-Paris: Calgary (Canada). Renewables or gas-fired power?” Vredenburg began by reminding those present of the assumptions of the Paris Agreement, negotiated in 2015 by 195 countries during the United Nations Conference on Climate (COP21), the goals of which are to open up a path towards a low-carbon global economy as a means of mitigating human-induced climate change, which includes the commitment to restrict an increase in temperature by reducing emissions of greenhouse gases. This academic, the founder of the MBA in “Global Energy Executive”, provided examples of good practices being implemented at the Pacific Centre for Renewable Energy & Energy Efficiency and specifically put into practice on the island of Nuku’alofa, Tonga, and in Fiji, reviewing some of the principal alternative energies, including wind power, solar panels and biomass, while underlining the issues in relation to the periodic nature of these kinds of energy, such as solar energy in countries and times of the year with less sunlight. The solution to these issues may lie in natural gas. “It is highly unlikely”, he stated, “that the price of natural gas will increase and it will certainly compete with renewable energies in the future: these are two major sources of energy that will prevail in the future”.

Still based on the Paris Agreement, Brian Sullivan, the CEO of IPIECA, a global association in the oil and gas industry for environmental and social issues, introduced the role of the global oil and gas industry in sustainable development to the debate, in addition to the view of IPIECA on the challenges to be faced in relation to climate change, not only within the scope of the Paris Agreement, but also the 17 Sustainable Development Goals (SDG). Sullivan also mentioned the report “Mapping the oil and gas industry for the Sustainable Development Goals: An Atlas", issued by the United Nations Development Program (PNUD), the International Financial Corporation (IFC) and IPIECA, which illustrates how the oil and gas industry can support and contribute in a more effective manner to achieving the SDGs through the roles and responsibilities of the key players, in addition to supplying examples of good practices and existing knowledge and resources available in the industry.
“The transformation of the energy system is challenging but possible”, stressed the specialist. The future requires almost double the energy used today to meet the needs of the increase in the population and to reduce emissions in accordance with the Paris Agreement, “which demands increased efficiency, energy savings, reduced emissions in the production and use of energy, turning to alternative sources”, he added, while emphasising the importance of collaboration among public and private entities: “Governments, civil society, universities, services and industry will need to create commitments with the aim of finding sustainable solutions for the problem of climate change”.

ENERGY: DEMAND IS NOT GOING TO STOP

This was one of the most pertinent issues addressed at the two open days held by Galp. As Carlos Gomes da Silva underlined, “energy is what makes the world go round today. Its importance in today´s society is indisputable, enabling us to live for longer and better and, as such, the demand for the same is and will be increasingly greater”. In 30 years, the population of the planet is expected to rise from the current 7 billion to 10 billion by 2050, and consequently, energy needs are not going to stop increasing in the coming decades. The challenge is enormous and complex: “We know that demand will increase, but we don´t know exactly what is going to happen, so we need to work by scenario with a focus on three major contributions to development: innovation, knowledge and trust”.

Trends and forecasts

Based on the 19th edition of the World Energy Markets Observatory report, an annual publication issued by Capgemini monitoring the main energy market indicators, Philippe Vié, vice-president of this French consultancy firm, presented a general panorama of the utilities industry at GPE Open Days: “From Global Energy Transition to Elon Musk, Robots and RenTechs”. He began by stating that the sector is undergoing significant levels of disruption, and the key message arising from his lecture was the apparent paradoxical need for the sector to share and reduce costs, on the one hand, and to invest in innovation, on the other. “Major changes are taking place in the energy markets in general, and in the commodities markets in particular, making it impossible to predict the future”, however, the need for companies in the sector and their business models to adapt is unquestionable.
Capgemini believes there are five prognostics for this year:
1. The energy markets will be challenged by the growth of RenTechs (a disruptive impact on renewable energy technologies and other companies in the sector).
2. Consumers will consider energy production communities for self-consumption versus traditional utilities.
3. Elon Musk (Tesla Motors) will test the potential of technology applied to energy storage batteries.
4. Artificial intelligence and robotics will restore consumers´ trust in utilities.
5. Utilities transformation programs will speed up and start to bear fruit.