A word first about this column which began 14 years ago in the printed version of First Break. Over the period it has covered commentary on business and technology as well as reflections on less obvious topics such as sport, music and poetry, all with an eye on the interests and concerns of the geoscience and engineering professions.
Now the digital age has caught up with us and First Break Online introduces a completely new platform. It is fitting that Crosstalk should also move with the times, in fact it has no option. In future, readers can expect, hopefully look forward to, two columns a month in a very similar vein as before. These will be shorter (more digestible for screen consumption) but of course more timely and reactive to current events than could ever be achieved in a monthly publication.
Hence this contribution comes fresh from attendance at this year’s Annual in Aberdeen. Every indicator suggests that this was another triumph of organisation and relevance for EAGE, not to mention magic in conjuring up a memorable conference evening in the grounds of a Scottish baronial castle with predictably uncooperative weather. Introducing 200 local school kids to the event as part of the Association’s outreach programme was also an inspired move.
However, there was something inescapably surrealistic about the event being held in the shadow of the US-Israel war on Iran. The longer it goes on, the conflict threatens increasingly dour consequences for the future of the energy landscape where the vast majority of EAGE members are immersed. Clearly, the potential impact (perceived last week and now) is entirely speculative, and therefore not something that should have preoccupied a conference focused on evolving technology for our global energy future.
At the Opening, the Q&A session with bp’s Ariel Flores sidestepped the issue entirely, sticking to the safer ground of his company’s strategy going forward, technical achievements of the industry and the continuing indispensable role of Aberdeen as an energy capital. The event was a day too early to take in the announcement of the restructuring of bp. It is to simplify the organisation into two distinct business segments, Upstream and Downstream, under the direction of Meg O’Neill, the newly appointed American CEO, who previously oversaw the merger of Woodside Energy and BHP Petroleum before in April becoming the first woman to lead a Big Oil company. This would have all been a story in itself.
There was something inescapably surrealistic about the event.
It was left to Simon Flowers of WoodMackenzie during the Opening panel discussion to strike a warning note about the precipice on which the world is standing if the Strait of Hormuz blockade was not lifted soon, adding that the recovery from the effects on energy supply were likely to take a long time even if shipping of oil was to be immediately resumed.
The obvious issue for the panel, where Flowers was joined by John Underhill, professor of energy transition, Aberdeen University, and Gurbuz Gonul from the Internation Renewable Energy Alliance (IRENA), was what we can expect from the current geopolitical turmoil and particularly whether energy transition momentum would take a hit.
Inevitably this conversation was also constrained by the need for some speculation, but the points made were pretty much what you would expect. In other words, governments worldwide have received a wake-up call regarding energy security and their continuing reliance on hydrocarbons. With reference to the UK, Prof Underhill talked about how the British government has had to soften its stance on prohibiting new oil and gas exploration initiatives in the UK North Sea. It will now permit infrastructure-led developments and recovery of otherwise stranded assets, rather than further increase foreign imports (80% of UK homes rely on gas for heating, and gas can often be called upon to provide over half of the UK's electricity generation when the wind isn’t blowing and the sun doesn’t shine).
A leading question – and of course a self-interested one for the geoscience community– was whether an uptick in global exploration could be expected. Not much seemed to be the conclusion, also reflected in other meeting during the week. Oil companies, with their stakeholders in mind, continue to be extremely cautious (disciplined is the popular term) about long-term and costly commitments. However, the CEOs of the main marine seismic contractors, TGS and Shearwater, must surely be correct in their frequent prediction that oil and gas companies will soon have to invest to replenish reserves. Even then, oil companies are unlikely to venture beyond the established hydrocarbons-rich provinces.
The real conundrum is what lies in store for energy transition.
The real conundrum is what lies in store for energy transition. In western economies, power generation to meet electricity demand looks to be most pressing priority for governments. The building of power-hungry data centres are adding to the stress on ageing and/or inadequate national grids. More wind, solar, geothermal or nuclear energy are the most pragmatic existing solutions, but all have their downsides and will take time to introduce. For developing countries such investments are all too often out of reach.
