Inside Out
What are the supermajors doing
to prepare for the energy transition?
The fossil fuels era, which has enabled
economic growth and development of an
unparalleled kind, now faces an entirely
new and different set of challenges. This
month Inside Out takes a look at how the
supermajors are adapting to the energy
transition.
At last year’s IP Week, the Energy
Institute was instrumental in leading the
challenge with a focus on the key role and
measures needed to be adopted by the
oil & gas industry to achieve a low carbon
future.
Two distinct and clear strands of
attention/focus are being pursued by the
companies below.
Pursuit of efficient, safe and
environmentally friendly/compliant operations,
US companies CHEVRON and EXXONMOBIL
are particularly mindful of sustainability
considerations, and technological solutions to
address decarbonisation.
Actively embracing electricity as a key
energy source, particularly the electrification of
mobility/transport, European companies BP,
SHELL and TOTAL are into power supply and
the provision of electric vehicle charging points.
CHEVRON is actively involved in two
very large Carbon Capture, Utilisation and
Storage (CCUS) projects, investing $1 billion+
in the Gorgon (Australia) gas field CO2
injection project and in Quest in Canada
with Shell. Chevron is also a stakeholder in
Carbon Engineering, a start-up company
in British Columbia, which is trialling a new
process called direct air capture which sucks
carbon dioxide from the atmosphere by using
chemicals and fans. The CO2 extracted can
then be used to produce synthetic fuels to
substitute for petrol, Jet A-1 or diesel.
Chevron has ‘a commitment to
understanding and evaluating opportunities
across a range of alternative and renewable
energy sources, including wind, solar
and biofuels, as well as energy efficiency
technologies.’ Its Technology Ventures arm
promotes innovation, commercialisation and
adoption of emerging technologies in water
management, production enhancement, power
systems and emerging materials.
Also heavily involved in CCUS,
EXXONMOBIL is seeking to make the
technology both scalable and more affordable.
An agreement worth up to $60 million with
FuelCell Energy, is providing clean, efficient and
affordable fuel cell solutions configured for the
supply, recovery and storage of energy.
Carbonate fuel cells can then efficiently
capture and concentrate carbon dioxide
streams from large industrial sources; its
modular design is capable of deployment at a
wide range of locations and has potential for
a more cost-efficient pathway for large scale
CCUS adoption.
For several years ExxonMobil has been
researching advanced biofuels, with particular
focus on algae’s potential. Its properties
enable the manufacture of biofuels with similar
composition to existing fossil fuels used in
transportation.
BP acquired Chargemaster, the UK’s
largest electric vehicle charging company, in
2018 with its Polar network comprising 7,000
publicly available charging points. Installation
of 150KW ultra-fast charging points at BP’s UK
sites is currently under way, with 400 in place
by the end of 2021. The units have an assessed
capacity to deliver a 10-minute charge with a
100-mile range. BP’s ambition is to have the
UK’s largest ultra-fast public charging network.
In 2010 the company set up Lightsource
for the development, acquisition and long-term
management of international large-scale solar
projects and smart energy solutions. This now
manages 2GW of solar capacity, through a
£2.6 billion investment and a team of 300+
people. BP is currently developing five UK solar
farm projects, capable of supplying 63,000
homes and saving an estimated 79,000 mt/
year of carbon emissions.
In 2017 SHELL acquired Dutch
company, NewMotion, provider of circa
30,000 residential and business charging
points and 50,000 public sites. Shell, which
is installing charging points at networks in
Norway, Netherlands, Philippines and the UK, is
converting an existing filling station in Fulham,
London to all-electric with the site opening in
2020.
Acquired in 2017, independent energy
supplier, First Utility has a portfolio of around
800,000 residential customers receiving
renewable electricity. Now rebranded as Shell
Energy, customers benefit from the Shell Go+
loyalty rewards programme and smart home
offers including smart thermostats, with
discounts on home electric vehicle chargers
and fast broadband. By 2030, this could be the
world’s largest power company, with electricity
projected to account for 30% of its business by
the mid-2030s.
From renewable generation to battery
storage to vehicle charging and domestic
power, TOTAL has been acquiring electricity
supply chain companies.
In 2016 the long-established French
battery manufacturer Saft Group was
acquired, with G2Mobility, a French provider
of electric vehicle charging solutions, acquired
in 2018. The latter having almost 10,000
points managed by its web services platform,
supporting both municipal governments and
private businesses.
Lampiris, third largest supplier of natural
gas and renewable power to the Belgian
residential sector, was acquired in 2016.
Bringing circa one million customers, this now
called Total Spring. Paris-based power supplier,
Direct Energie was acquired in 2018 giving
Total around four million customers. Total’s
aim is to expand the network to 6 million by
2022 thus becoming a major challenger to EDF
which currently supplies 80% of the market,
and Engie.
BP, SHELL and TOTAL are members of
the HYDROGEN COUNCIL, launched at the
January 2017 Davos meeting, as a global
initiative to frame a unified vision to promote
hydrogen as ‘one of the key solutions of the
energy transition’.
A combination of increasing public and
political pressure and shareholder activism, is
clearly playing a key role in shaping energy
transition strategies.
The EU is seeing immediate pressure
towards electrification rising from more
stringent CO2 emissions reductions targets.
Fleet-wide emissions for new passenger cars
will be phased in during 2020 and effective in
2021. This will require an average of 95gm/km
down from the 2015 target of 130gm/km and
2018 average of 120 gm/km.
Having successfully met numerous
previous challenges, the supermajors have
the resources, expertise and knowledge base
to build resilience, and address the energy
transition in their own, different ways.
Fuel Oil News | January 2020 21