On March 16th I gave a presentation on the findings of the Deep Decarbonization Pathways Project (DDPP) at a conference in Houston, Texas hosted by the International Petroleum Industry Environmental Conservation Association (IPIECA), the global oil and gas industry association for environmental and social issues (http://www.ipieca.org). I didn’t know about IPICECA before this invitation, but I was impressed by the quality of the discussion, which was both more positive and more sophisticated than I had expected.
The first day of the conference focused on the Paris agreement and its ins, outs, and implications. Some of it I missed but what I did see resonated with me, especially that the breakthrough in Paris was precipitated by a shift in strategy from top-down emissions targets with focus on burden sharing and development status, to a bottom-up approach with a focus on voluntary country commitments. The DDPP exemplifies this bottom-up approach, which I highlighted in my presentation on the second day.
The second day focused on understanding low emissions pathways and covered a breadth of issues from CCS to renewable integration to battery technology. This post will be updated with a link to all presentations when they become available. Many of the speakers had reinforcing messages with some of the main themes being:
The “pillars of decarbonization” were discussed widely and presented in many of the talks. These pillars are (1) energy efficiency (2) total decarbonization of electricity (3) fuel switching with an emphasis on electrification.
Oil and gas are in different situations in a 2-degree pathway. Specifically, gas with CCS is a viable low emissions pathway while, except for certain heavy duty applications, direct petroleum combustion is greatly reduced by 2050. I had conversations about the opportunities for using oil as a feedstock to hydrogen with CCS or for use in electricity with CCS, which is possible, but we noted that it probably wouldn’t support the same price for oil we see today (even with 2016 depressed prices).
CCS was identified by several presenters as an integral part of a 2-degree solution. First-generation plants have largely been successful with capture costs around $100/ton, and with further cost declines expected. This makes the technology roughly competitive with the long run average abatement cost in the U.S. DDPP cases. Julio Freedman, Chief Energy Technologist at Lawrence Livermore National Lab, led the discussion here. He identified the main issues as (1) insufficient financing (& incentives) for new plants (2) weak political support for CCS, in part because the oil and gas industries are not giving the technology sufficient backing.
The coal industry was used as a cautionary example for how quickly broader trends and forces could impact the oil and gas industries. Encouragement was given for finding alternative business models or sources of revenue.
Practical difficulties and remaining uncertainties in how to meet a “well below 2-degree” target were identified, particularly in transportation where William Chernicoff from Toyota gave a realistic look at the state of alternative vehicles today. He talked about purchase decisions saying that customers will buy what they “like”, meaning rational decision making plays a smaller role than most realize. With this rational he downplayed the impact of depressed oil prices on EV sales, which I tended to agree with.
I’d like to thank Rob Siveter and Laura McIntyre for their work organizing the event and for inviting the DDPP to participate, as well as Jim Williams helpful feedback on my presentation.
My slides presented on behalf of the DDPP are posted here.