A close friend recently shared an episode of In Good Company, a podcast hosted by Nicolai Tangen. The episode featured a thought-provoking conversation with Darren Woods, the CEO of ExxonMobil. During this podcast, Darren shared his, and his organization’s growth plans in many areas.
The area that resonated more with me was energy transition and how exploration and production companies respond to the global clamour for a transition away from fossil fuels.
As traditional exploration and production companies, we are generally driven to find fossil fuel in commercial quantities and find paths to transform it into energy in different forms. We are also aware of the association with climatic changes, mainly its association with fugitive gases and scope emissions. However, we live in a world where the hunger and quest for energy multiply exponentially, with increasing demand for energy.
Considering that fossil fuel is a relatively non-replenishable energy source, energy producers have either considered or pivoted towards non-fossil fuel sources of energy in the quest for climate-sensitive options. These options on their own are relatively more acceptable from a climate standpoint; however, there is firstly a significant gap for them to fill if these options will also be the primary energy source. The previous also applies to the fact that only a minimal aspect of the manufacturing of these options happens in Africa
If we, as a continent, were implanted in one of the western hemisphere locations, the solution might be more straightforward. However, we have to be contextual and define a Nigerian solution or, better still, an African solution.
Research suggests that less than 3-5% of the global emission that concerns climate leaders emanates from Africa; given this data, a continent already in energy poverty must define its energy transition plans about its particular situation and context.
There is a significant role for non-fossil fuel energy companies to provide energy, but is this the solution to climate challenges?
Some questions may guide our approach towards solutions that are continent specific, particularly as the process of exploration and production of fossil fuel is associated with the generation of scope gases.
Should we be focused on reducing or capturing these gases associated with the fossil fuel industry?
Should we abandon the fossil fuel industry for an industry whose manufacturing supply chain is also fraught with similar fugitive gases but also significantly more expensive to generate and deliver to an already poorer population?
For instance, in the solar panel industry, the more significant challenge is the absence of readiness to tackle the recycling of the panels, which will soon surmount the amount that can be judiciously recycled. In the words of Dareen Wood, we are molecular companies and not electron companies, so the solution to the climate challenges is in the molecular solution considering the cost of the energy transition is a lot higher than the average African can afford shortly.
As an organization in the fossil fuel industry, our strategy is apparent. The first is to review our exploration and production cycles to reduce carbon and methane emissions while ensuring we actively develop energy generation from non-fossil sources.
Our initiatives primarily revolve around renewable energy via solar source utilization and hydrogen energy development. As we strive towards recognition and relevance in this sector, we have embarked on strategic partnerships.
These partnerships are working to develop mini-grid systems that can feed into existing power generation grids. In hydrogen energy, we focus on green hydrogen as an energy export to meet demand where needed.
More importantly, we are addressing the scope of gases in our operations. Historically, Pan Ocean Oil Corporation (Nigeria) Limited was the first exploration and production company in sub-Saharan Africa to implement a gas flare-out under the Kyoto Protocol, whereby over 2 Million units of carbon credit were generated under the UNFCC protocol. https://cdm.unfccc.int/Projects/DB/DNV-CUK1218208551.22/view Last accessed June 28th, 2023
On the Egbaoma Marginal Field, Platform Petroleum (operator of the Platform- Newcross Egbaoma Marginal Field) was able to implement the elimination of flared gases under a strategic drive to address the impact of flared gases in operation, with the gas being processed for power generation, LPG, CNG and other distillates. https://cdm.unfccc.int/Projects/DB/SGS-UKL1274957530.75 Last accessed June 28th, 2023
Newcross Exploration and Production is currently on a path to eliminate all emissions from its operations in its operated asset on behalf of NNPC- NewcrossEP. Commencing with the Methane Inventory and Systemic Tool (MIST) project, the organization is establishing baseline data for methane inventory, which will lead to the reduction of the impact of methane in our environment.
There are also preliminary work in establishing baseline steps for mangrove restoration in the Niger Delta successfully. https://www.carbonlimits.no/project/mist-methane-inventory-systematic-tool-2/ Last accessed June 28th, 2023.
In Newcross Petroleum, at the commencement of commercial production, the operational base was set up with over 50% of the baseline power utilization to the supported by solar- generated power.
In defining a path towards a sustainable energy transition, what needs to be addressed are the issues associated traditionally with exploration and production, contextually developing non-fossil fuel sources of energy, and committing toward restoration of our mangroves and forestry.
Dr. Ogundare is GED, Pan Ocean-Newcross Group (Corporate Strategy). He is also a co-founder and partner at carbon Limits Nigeria
