Why O&G and geoscience expertise is vital to the Energy Transition skills gap
- Dec 1, 2020 12:16 pm GMT
The paradigm shift towards sustainability is not a fad. There is increasing pressure on energy producers to accelerate the energy transition (ET) without compromising the growing demand for energy and power generation. According to Equinor’s Energy Perspectives 2020, energy forecasting shows global energy demand to continuously rise towards 2050 – even when considering any ET transition forecast scenario. Coupled with increasing positivity from COVID vaccines and rising economic prosperity in emerging economies, oil demand is set to increase. The link between increased economic prosperity in emerging economies and oil demand is vital as transportation is a key industry for oil demand. There is a positive correlation between economic prosperity, disposable income, and travel. Thus, emerging economies will need cheap, accessible, and dense sources of energy to meet their increasing energy requirements.
Source: Equinor, Energy Perspectives 2020
Source: Equinor, Energy Perspectives 2020
Addressing the contradictory balance between sustainability and increased power generation is a significant, industry-wide challenge as the entire energy supply chain seeks to find an optimal balance between these two seemingly opposing obligations. Some of the key questions which need to be addressed across the entire energy value chain are:
- How do changes in energy-related policies, markets and technology impact businesses, sectors, or countries?
- What are the key drivers and uncertainties of these changes and how should they be monitored?
- Considering all this, and given the prevailing competitive landscape, how do companies align themselves for the future? Do they have the correct focus, size, and capital available? Are there clear road maps to ensure increased shareholder value?
- What are the transitional fuels/energy vectors and what are the end state fuels?
- How to enable decarbonisation of existing gas infrastructure? How to source low carbon fuels as industrial feedstock?
Based on this, it is evident that a key constraint to accelerating this transition lies in the current limited connectivity between energy systems, regulatory support, geopolitics, and the capital allocation process. Although there may not be a one-size fits all answer to this problem, the formula remains the same:
Establishing how best to align various low carbon energy vectors within a cohesive energy system, backed by both governments and accepted by the public.
With conventional fossil fuels still dominating global energy supply, any ET scenario will require hydrocarbons. Step in, O&G professionals with your accompanying expertise across engineering, supply chain management, geological and subsurface skills, digitalisation, data management, etc.
Having had the opportunity to attend several O&G organised, virtual conferences focusing on the ET, a lot of discussion always reverted to the important topic of career opportunities and transferrable geoscience skills needed to bridge address the skills gap in the transition. The immediate (and one dimensional) strategy is of course to explore opportunities where geoscience skills are more readily and directly transferrable such as:
- Investigating the viability of salt caverns as reservoir stores for CCUS capabilities
- Subsurface mapping of potential CCUS prospects – 3-way dip closures, spill points
- Geological (cores/microscopic) evaluation to establish reservoir properties needed to calculate reservoir volumes for carbon storage
- Subsurface mapping techniques for development of foundation solutions in the installation of offshore wind farms or for geothermal applications
- Electrolysis in hydrogen/exploration of hydrogen in the natural environment
- Lithium mining capabilities in battery storage/geothermal applications
Ultimately, there can only be so many geoscientists on any development project. This challenge is further exacerbated by the COVID-19 pandemic and the resulting economic fallout from job layoffs. The oil, natural gas, and chemicals industry in the U.S. eliminated 107,000 jobs between March and August of this year, according to a 2020 report released by Deloitte on the future of work in the sector. It’s the “fastest rate of layoffs in the industry’s history,” the report says—a remarkable pace even for a sector famed for its lofty booms and devastating busts. Through no fault of their own, experienced professionals are now in a position where they may be forced to downshift and take roles that might otherwise have been open to a less educated candidate/early starter. According to Future of Jobs Survey, 2020, World Economic Forum the top skills required for the future (and in this case, ET) must be broader — such as analytical thinking, complex problem-solving, and creativity — and this exposes a potential rift in the jobs market. “There’s going to be a point where all the technology has been built and you no longer need a gazillion software programmers and data scientists,” says Julian Lambertin of KRC Research, who has worked with Microsoft on recent reports about the future of work. Instead, “you will need people who work with the technology” and apply their human, personal and leadership skills.
Bringing this back to the global juggernaut, which is the oil and gas industry, tapping into the broader geoscience skillset is the key to widening this skills pipeline for the future. Being a global industry, the oil and gas industry requires deployment of staff across multiple geographies, of which many skills are honed - multilingual skills, complex stakeholder management across interdisciplinary teams, project management, etc. According to analysis by Carbon Tracker, the concept of a successful energy transition opens up a political window of opportunity as it is now possible to legislate in favour of renewables and to go with the grain of economics i.e. the falling costs of renewables will be driving a political tipping point where politicians move from expensive support for renewables to embrace the sector and to tax fossil fuel externalities. Politicians can simultaneously reduce pollution, reduce costs, gain votes, and enhance national influence. However, these political pressures vary widely by country and sector. A strategy built towards renewables strategies may be fitting for a UK-centric energy transition conversation however, in more immature energy markets in India and many African countries, this may seem a luxury. To navigate through this maze of complexity, interdisciplinary skills across languages, communication and multi-stakeholder management will be needed to influence decision making. This opens the door for technical policy consultants, lobbyist opportunities, technical policy regulators etc. who work at the frontline of shaping future energy policy.
On a separate tangent – creativity. Offshore drilling began in 1897, just 38 years after the first oilfield (Drake) was drilled at Titusville, Pennsylvania. By 1902, there were already 150 “offshore” wells in the area. By 1921, steel piers were being used in Rincon and Elwood (California) to support land-type drilling rigs. By 1949, the first commercial hydraulic fracturing of an oil well took place in 1949 about 12 miles east of Duncan, Oklahoma. There are not many industries that thrive under this scale of complexity – at breath-taking pace. For a problem as intricate as the energy transition, it is not far fetched to imagine that the analytical, problem solving and creative thinking skills, honed by the oil and gas industry is well placed to lead the charge towards creating a more sustainable energy landscape. There are several pitfalls, however.
One key mindset adaptation which needs to be addressed is in relation to the lofty expectations on remuneration. The oil and gas industry has always been envied for its generous remuneration over the years. This is evidenced by UK Office of National Statistics (ONS) data which shows weekly earning average of UK Mining and Quarrying industries (mining of coal & lignite, extraction of crude petroleum & natural gas, mining of metal ores, other mining & quarrying and mining support service activities) to outperform every other sector over a 20-year timeframe.
Source: Office of National Statistics (ONS)
However, when scrutinised, 2020 Q3 salary data tracked by Statista shows a loss in dominance of the oil & energy industry in comparison to its fellow high paying counterparts – for example, investment banking and financial services who have maintained relative dominance. Arguably, lucrative salaries and bonuses were by-products of record high oil prices, however with the prospect of a relatively low oil price world (in comparison to towering heights of $147.02, in July 2008) the age of mouth-watering salaries are a thing of the past: The International Monetary Fund, in its latest release of the World Economic Outlook, predicts a slightly less severe drop and more modest recovery with Brent oil prices to plunge to $36.9 per barrel in 2020 and then rebound to $39.5 in 2021. Hence, to aspiring geoscientists keen on influencing the energy transition, the expectations for hefty remuneration must be re-calibrated accordingly to reflect a new reality.
From a recruitment standpoint, oil and gas has a tainted reputation and there is an implicit (and arguably low-resolution mindset) which points to the suggestion that:
Oil and gas = Bad
Renewables = Good
Unfortunately, this implicit bias and vilification towards oil and gas as an industry, points to a wider societal befuddlement which equates political ideology with (or lack of) morality. Ironically, the prosperity and advancements which we all enjoy are borne out of the exploration, production, and utilisation of hydrocarbons. Case in point – At the most recent 2019 World Economic Forum in Davos, Switzerland, estimates from Air Charter Services pointed towards approximate figures of up to 1500 private jets to fly in to discuss climate change focused incentives and challenges.
Unique problems require unique solutions. The novel challenge of the ET is the complexity across all its moving (and often competing) parts. This requires the creative, analytical thinking and problem-solving skills which are front and centre of the geosciences and is evidenced by the numerous achievements of the oil industry. A journey in the geosciences will cover numerous aspects of scientific problem solving, global climate change, computing, data analysis, and communication to name a few. These are the vital skills which will bridge the technological gaps in accelerating the energy transition and overcome challenges within exploration of hydrogen in the natural environment, challenges with battery storage, scaling up of CCUS capabilities etc. The ET requires new systems, new technology, novel and expanded networks, and revamped storage systems. This is evident of an evolving oil and gas industry. Inevitably, this expansion is also required in the presentation and appreciation of the geoscience skillset. The contribution of O&G professionals towards addressing the ET does not need any dramatic overhaul or holistic re-invention of the wheel, but simply re-establishment of expectations and building upon what is already a very strong technical base merged with a wealth of accompanying transferrable skillset. There is more to your geoscience skillset than picking seismic lines.
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