Ships sailing into the port of Rotterdam in February 2022.
Federico Gambarini | Picture Alliance | Getty Images
Concerns related to both the energy transition and energy security have been thrown into sharp relief by Russia’s invasion of Ukraine.
Russia is a major supplier of oil and gas, and over the past few weeks a number of major economies have laid out plans to reduce their reliance on its hydrocarbons.
On Friday, the U.S. and the European Commission issued a statement on energy security in which they announced the creation of a joint task force on the subject.
The parties said the U.S. would “strive to ensure” at least 15 billion cubic meters of extra liquefied natural gas volumes for the EU this year. They added this would be expected to increase in the future.
Commenting on the agreement, President Joe Biden said the U.S. and EU would also “work together to take concrete measures to reduce dependence on natural gas — period — and to maximize … the availability and use of renewable energy.”
All of the above speaks to the huge task facing governments around the world who say they want to reduce their reliance on fossil fuels, prevent the worst effects of climate change and simultaneously safeguard energy security.
The challenges and opportunities facing the energy sector were addressed on Monday during a panel discussion at the Atlantic Council’s Global Energy Forum in Dubai, United Arab Emirates.
During the panel, which was moderated by CNBC’s Hadley Gamble, the CEO of Italian oil and gas firm Eni sought to highlight the current tensions facing his sector.
Claudio Descalzi said, historically, a wide variety of resources had been harnessed. “We know very well that in the last 200 years, all the different energy vectors [have] … been added,” he said. “So coal, plus oil, plus gas and plus renewables.”
“We never found a source, or energy source, that replaced everything. It’s crazy to think that there is something that can replace everything.”
Others speaking on Monday included Anna Shpitsberg, deputy assistant secretary for energy transformation at the U.S. Department of State.
Shpitsberg said that while the U.S.-EU task force would focus on areas like securing LNG supply, it would also look to provide “some certainty to U.S. producers that will be amping up and surging supply into Europe over the long term and up to 2030.” Permitting and infrastructure would also be areas of focus, she explained.
It was also important not to compromise the energy transition, she acknowledged, before going on to reference the argument put forward by Eni’s Descalzi.
“To the comments that were made that we cannot rely on one technology, just like we cannot rely too heavily on one supply route, it is the reason that we’re putting so much money into hydrogen.”
Shpitsberg called hydrogen “a game-changing technology that speaks to a variety of other sources … because it can underpin nuclear, it can underpin gas, it can underpin renewables, it can clean a good portion of it and so can CCUS [carbon capture utilization and storage].”
“So for us, it’s making sure that the market has enough signals, it knows the regulatory environment will support the signals for current energy security,” she said.
“But we are sending, also, all the resources we can toward the transition. It’s why we’re putting billions of dollars into hydrogen R&D.”
Described by the International Energy Agency as a “versatile energy carrier,” hydrogen has a diverse range of applications and can be deployed in sectors such as industry and transport.
It can be produced in a number of ways. One method includes using electrolysis, with an electric current splitting water into oxygen and hydrogen.
If the electricity used in this process comes from a renewable source such as wind or solar then some call it green or renewable hydrogen.
While there is excitement in some quarters about hydrogen’s potential, the vast majority of its generation is currently based on fossil fuels.
Others speaking on Monday included Majid Jafar, CEO of Crescent Petroleum.
Again, Jafar made the case for gas’ importance in the years ahead, calling it “a fundamental enabler of renewables” because it backed up their intermittent supply. It was also, he claimed, “the path to future technologies like hydrogen.”
Monday’s panel bookends a month in which the International Energy Agency reported that 2021 saw energy-related carbon dioxide emissions rise to their highest level in history. The IEA found energy-related global CO2 emissions increased by 6% in 2021 to reach a record high of 36.3 billion metric tons.
In its analysis, the world’s leading energy authority pinpointed coal use as being the main driver behind the growth. It said coal was responsible for more than 40% of overall growth in worldwide CO2 emissions last year, hitting a record of 15.3 billion metric tons.
“CO2 emissions from natural gas rebounded well above their 2019 levels to 7.5 billion tonnes,” the IEA said, adding that CO2 emissions from oil came in at 10.7 billion metric tons.