“We can pontificate about the energy transition and carbon reduction all we want,” says Charles McConnell, Executive Director, Carbon Management and Energy Sustainability at the University of Houston. “But if countries are short of energy, watch out!”
While there has been a lot of talk of the low carbon future, McConnell believes that fossil fuels will continue to play an essential role in helping the world meet its energy requirements. The key to enabling the Net Zero future will be to decarbonize operations and products, he says. McConnell has decades of industry experience and served as Former Assistant Secretary of Energy, a politically appointed role to execute policy and operate the Fossil Energy Department. In this interview, he offers his perspectives on the challenges of the energy transition, what he sees as the way forward and why he believes altruism will come out in the wash in the coming years.
Diana Davis, Oil and Gas IQ: Climate change, reducing carbon emissions and the energy transition – these are topics that have been around for years, and this past year it feels like suddenly the oil and gas industry is paying some serious attention to them. From your perspective, how and why has the conversation shifted?
Charles McConnell: The topic has been around for many years, but the definition of what we’re discussing is all over the map. What does the energy transition really mean? I think that now as people begin to get more familiar with the challenges that we have, there is a coming together in terms of the mission. We’re still not where we need to be, but the convergence is helpful. From my perspective, our mission is to reduce CO2 and methane emissions. We need to move from there to evaluate the most effective, rapid, and creative ways to address the challenge of emissions reduction and energy sustainability. Energy sustainability has three aspects: First, you must have the availability of reliable energy. Second, is it affordable? Is it cost competitive? Finally, once you’ve satisfied those two things, the third leg on the stool is environmental responsibility in terms of methane and CO2 emissions. This gets into a discussion about the whole value chain because emissions are not just from producing it but also from consuming it. Energy sustainability doesn’t have a single recipe. If you look at it in different economies, you’ll find in some places many people don’t even have energy. The very availability of it or the reliability of it is in question. In the developed world, we have the responsibility to meet the needs of our people, do it in an affordable manner, be environmentally responsible and create the technologies that enable that to occur so that emissions can be globally mitigated.
Diana Davis, Oil and Gas IQ: You think we’re converging on the mission? How do you see that playing out?
Charles McConnell: The conversation is evolving. It has gone from a conversation about government regulation to one about market and investment. Investors and the marketplace are now demanding decarbonization. But how bad do they want it? As you continue to move down this continuum and challenge the value proposition of the energy that you’re making or consuming, the bottom line is you must be ready to pay for it. Is society prepared to pay for it now? What I hear today is that shareholders, investors, investment organizations are making these demands. The marketplace is reacting to that right now. But I wouldn’t say that the story is written; it’s easy to sit with the angels if it doesn’t cost you anything.
Diana Davis, Oil and Gas IQ: What do you see as the biggest challenge to move towards a low carbon economy? How do we make this a reality?
Charles McConnell: In the roughly 200 years since the Industrial Revolution, we’ve developed an incredible amount of infrastructure and capabilities that have changed our way of life from a largely agrarian world to the way we live today. This has been enabled by our use of energy and the fundamental reality is that 85% of the world’s energy currently comes from fossil fuels. That’s not an opinion, it’s a fact.To make the transition from 85% of our energy supply to some significantly lower number is, in and of itself, a remarkable challenge. But the scale of that challenge is even higher. Since I was born, the world population has doubled. If I’m lucky to live another 20 years, another 2.5 to 3 billion people will also be added to the world. Our task is to not only to transform the existing structure that is 85% dependent on fossil fuels, but we’re also going to meet the needs of another two and a half billion people, most of whom live in underdeveloped economies where getting energy supply from coal and oil and gas would be far easier. The reality is that after even after the introduction of new technologies such as renewables, batteries and storage, the International Agency International Energy Agency has projected that we will nearly double the demand for energy over the next 50 years and close to 80% of the world’s energy will still be supplied by fossil fuels. Our energy needs are growing. That means that if we don’t figure out how to decarbonize fossil fuels, we will fail. Carbon, capture utilization and storage, the hydrogen economy, the decarbonized electricity grid; all these pillars will have to be addressed with a clear line of sight on where we go. I’m all for renewable energy. I’m all for doing things in a decarbonized manner. But it is a fool’s statement to say we need to stop using fossil fuels. We won’t stop using them. What we must do is use them more responsibly, and that means we need to have the technologies to be able to do so.
Read the full interview on Oil & Gas IQ.