Energy transition: solving a global problem requires a holistic pursuit (ERTC)

The Covid-19 pandemic has sparked a renewed focus on planning for sustainability and achieving the goals of the Paris Climate Agreement (PCA).

Darren York and Mel Larson

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Article Summary

These fundamental shifts are strongly evident in the European Union. EU capitals have been put under pressure to agree to reducing greenhouse gas emissions by 60% by 2030 compared with 1990, after the European parliament voted in favour of an ‘ambitious’ climate law that would also oblige each member state to be carbon neutral by 2050. www.theguardian.com/world/2020/oct/08/eu-parliament-votes-carbon-greenhouse-gas-emissions-reduction-2030

It is important to provide a holistic view, specifics, and clarity to the PCA as the limiting of global temperature increase to 2°C is focused on atmospheric CO2 emissions reductions within this century. The two basic pathways to achieve the PCA’s goal are: 1) Carbon capture and sequestration (CCS) or 2) Energy production and consumption without any fossil source. Given the fact that the timeline to reach the goal is increasingly being shortened from this century to 2050 and that by any historical measure a complete energy transition occurring in just 30 years is incredibly unlikely, the solutions will simply not be one or the other. In fact, if the world is to accomplish this goal, it will take cooperative effort involving all energy sources, technology, innovation, governance, and capital to achieve secure, accessible, affordable, and sustainable energy on a world scale.

Public opinion is clear that climate change is at the forefront of thinking and concern. The lockdown across the globe has had a short-term impact on noticeably cleaner air and water pollution in rivers ‘disappearing’. The lockdowns have also instigated a social shift from commuting into a central congested area to an office, to working from home. This has resulted in less travel overall and a shift from mass transportation to more individual cars in regional areas. These changes along with a dramatic decrease in commercial aviation traffic and others are yet to be determined as what the new ‘normal’ will be. Regardless, the social contribution will have to be significant as well if we are to accomplish these climate goals.

An energy transition to 2050 is a very ambitious goal and will require participation from all traditional sectors including fossil fuels and nuclear to new alternative forms in wind, solar, hydrogen, and other emerging and innovative sources. The energy transition should be in harmony with a holistic ‘well to wheel’ analysis. This technique has been applied to fossil fuels and must be applied to ‘green’ technologies equally to ensure that we avoid unintended environmental and social consequences by singularly considering greenhouse gas (GHG) emissions.

Adding another global challenge to achieving climate goals will be the dramatically changing world we live in over the next 30 years. Global population growth, with the expected addition of 1.9 billion people, and economic migration to a larger middle class with a substantial GDP growth dramatically increases total energy demand in all forms. It is easy to see and promote ‘green’ energy in the electric energy space with easily understood pictures of windmills and solar panels. However, moving to a greater share of total energy being electric power generation and a more ‘electrified’ transportation system has other implications as well.

Energy production and storage impacts for these systems include a 10-fold increase in mineral extraction compared to fossil fuel electricity. Similarly, replacing just 50 million of the world’s estimated 1.3 billion cars with electric vehicles would require more than doubling the world’s annual production of cobalt, neodymium, and lithium, and using more than half the world’s current annual copper production. The mining techniques, water consumption/contamination, fossil fuels use for heavy equipment, and that many of these sites are sensitive, protected locations also must be considered regarding total environmental impact. The energy transition will also have to account for recycling, reuse, and general carbon use reduction both corporately and individually if we are to be successful.

The EU has nominated hydrogen as the preferred source as it can be used as a feedstock, a fuel, or an energy carrier. Each of these uses include challenges in production, distribution/logistics, and final source use within the context of both individual consumer and industrial users.  

Norway has considered hydrogen production with CCS, while Denmark is considering using ‘excess’ wind energy with water electrolysis to produce hydrogen and oxygen. Using wind as the electrical input will produce green hydrogen, however there are no large commercial-scale plants currently in operation.

Specifically considering hydrogen, one of the quickest and least costly pathways is blue hydrogen, where the CO2 emitted from the production of hydrogen from natural gas or light hydrocarbons is captured. The CO2 then can be collected, compressed, and injected into the ground (offshore or on shore). 

Fundamentally, the energy transition will shift emissions from millions of points (tailpipes) with varied efficiencies to fewer single points, where economy-of-scale solutions improve the economic viability.

There are several critical challenges for each region. There are substantive infrastructure differences between postmodern EU vs the emerging markets of Africa or South America. There is the clash between free market (shareholder return) and government (subsidies, carbon tax, cap and trade) initiatives. The ‘free market’ will consider rate of return on investment, while governments only have taxation or regulation as the mode to incentivise.

Even with post-vaccine considerations, there is less likelihood of a return to pre-Covid work habits. Mass transit will decline, consistent with ‘social’ distancing increasing the surge in individual modes of transportation. If the trend continues without subsidies, consumers will be more likely to accept a primary or secondary electric vehicle or hybrid. There are some hidden costs such as home charging installations, increasing the number of recharging or, in the case of hydrogen, refuelling stations.

The pressure to be green is increasing from the consumer, boardroom, and lending institutions. Due to demand, just because a major oil company divests of a refinery, it does not mean that refinery ceases to operate, rather it simply shifts the burden of compliance and viability to the new owner.

The reality is fossil fuels will be necessary for decades to come, albeit at a different percentage of demand. Mapping out the transition for a given site, country, region will include environmental impact, economic parameters, and technology initiatives.

The key steps now are to reduce CO2 emissions through site energy efficiency CCS, consider replacing hydrogen production with electrolysis hydrogen, and utilise the oxygen for other purposes.

A second step consideration is optimising the site infrastructure and staff with biofuels production, plastics recycling, or ammonia production as fuel replacements. Finally, under the basis of replacing coal, incremental power generation to the grid is also a viable consideration.

The landscape is changing globally and regionally in refinery rationalisation, repurposing, and domestic fuel security. Now is the time to chart a course for the future. Becht has the staff with global experience and local attention to collaborate to develop and implement these strategic plans for your success.

This short article originally appeared in the 2020 ERTC Newspaper, produced by PTQ / DigitalRefining.

You can view the digital issue here - https://online.flippingbook.com/view/1029582

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