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How Oil and Gas is Affected by Climate Change – Response to a Presentation in Central America.


Independence, Kansas is a small, conservative city in the heart of the United States. The region produced oil for decades, before natural gas from coal bed methane became important in the 1990s and 2000s. Huge wind farms have sprung up in recent years nearby and have supplied the Kansas more than 40% of its electricity in 2019, or more than 25 GWh (million kilowatt hours). The state is #1 or #2 in wind energy in the United States. The highest wind speeds occur in large areas around the historic city of Dodge.

I was eager to see how attendees would react to a talk I presented last week titled “Climate Change and How It Affects the United States, the Oil and Gas Industry, and Ourselves.”

What was presented:

Here is a summary of the main points that were presented:

· Global warming is true.

· It has been verified by retreating glaciers, melting Arctic ice, rising sea levels and bleaching coral reefs.

· Global warming is caused by increasing greenhouse gases (GHGs) in the atmosphere. The two main GHGs are carbon dioxide and methane.

· Over the past 40 to 50 years, carbon dioxide (CO2) levels have reached 415 ppm, a level higher than for the past 3 million years. The temperature rose along with the CO2, as if the CO2 raised the temperature (Figure 1).

· Climatologists predict from their models that if greenhouse gases are not controlled, the global temperature will reach its highest level in 1 million years by the year 2100. The Earth will be in an area twilight and terrible things will likely happen in the form of droughts, wildfires, super storms and hurricanes. To avoid the twilight zone, scientists say we need to act hard and fast to reduce GHG emissions.

· The oil and gas industry is responsible for 50% of the world’s greenhouse gases, so it’s the culprit.

· But oil and gas have provided many benefits to our civilization. Cheap and reliable oil and gas fuels for cars and trucks and electricity for homes and industries. The United States is self-sufficient in oil for the first time since 1947. Energy security matters, as the Russian war in Ukraine shows us. All kinds of things depend on petroleum products: The plastics we depend on in our homes and offices. The clothes we wear. Medicines we take. Entire layers of countries have been elevated into the middle class via oil and gas.

· So the world has benefited from and still depends on oil and gas – but that same oil and gas is responsible for 50% of the world’s GHGs and global warming. What can/should oil and gas (O&G) companies do to solve this dilemma?

Oil and gas companies are responding in four ways:

o Stop gas flaring at wells.

o Finding and repairing methane leaks in wells, pipelines, storage tanks, gas processing facilities.

o Install green operations, eg gas turbines that pump fracks instead of diesel fuel.

o Invest in renewable energies.

· Proactive efforts have begun.

o Group 1 reduces GHGs from all its operations. Examples are ExxonMobil and Pioneer in the Permian Basin.

o Group 2 invests in carbon capture and storage. Occidental and ExxonMobil are the main movers.

o Group 3 invests in renewable energies. bp and Equinor are leading the way by installing huge offshore wind systems, notably off the northeast coast of the United States.

International companies and countries show what is feasible, and here are some examples:

· TotalEnergies plans include in a 2022 budget $500 million for E&P, $500 million for wind and solar renewables, and $500 million for biogas and hydrogen renewables.

The tiny South Australian state has achieved 100% renewable electricity for a day or two via onshore wind farms and is heading towards 100% permanently in the next few years. This despite the fact that they produce a lot of oil and gas. Although they closed their only coal-fired power plant several years ago, they still have gas-fired plants in reserve. The largest grid-scale big battery in the world was built in 2016 to stabilize the wind system.

· By 2030, Australia as a whole expects nearly 80% renewable energy (currently at 28%), with most coal-fired power stations closed. This change is attributed to a rapid decline in the costs of solar, wind and large batteries, as well as industry demand for cheaper and greener energy.

Denmark, a small country leading the world in wind energy, recently halted oil and gas exploration and plans to end its considerable oil production in the North Sea by 2050. Wind energy creates 50% of its electricity, more than any other country (the United States accounts for 8.4%), and Denmark builds a considerable number of wind turbines for other countries. They also plan to spend $34 billion to build an artificial green energy island, starting in 2026, that would collect and store energy from an offshore wind system.

· What will the year 2050 look like for the world at large?

o The share of oil and gas in the global energy mix has fallen to 40% (from 53% currently).

o Solar, wind and hydroelectric energy represent approximately 50%.

o The number of electric vehicles has skyrocketed from less than 10% to around 90%.

o Renewables will supply 70% of the world’s electricity by 2050.

o The use of coal in power plants will disappear.

o Energy-related carbon dioxide emissions have been cut in half, but….

o The temperature of the planet has warmed by 2.5 C since the industrial revolution.

Audience questions and answers:

Q1. A man said his son was a project manager for wind farm installations. He said his son was busy, busy, busy — all over the United States. His son told him about a rancher who has several wind turbines on his property. In a bad year, the income from the rental of the turbines compensates for its other financial losses. To respond: Lease payments in Texas were about $10,000 per year for each wind turbine.

Q2. From a smartly dressed woman: how do energy companies know where to put a wind farm? To respond: they discover from meteorological data where average wind speeds are above a critical level.

Q3. From a silver-haired man: If we get rid of all our coal, oil and gas, how do we generate the level of heat needed for the blast furnaces that make steel? He said you can’t get it from wind or solar power unless you pay a premium. To respond: you make and use liquid hydrogen because it burns very hot. Two companies in New Mexico manufacture and sell hydrogen as a fuel. Japan buys hydrogen from Saudi Arabia.

Q4. How long do electric car batteries last? To respond: 10 to 20 years before needing to be replaced.

Q5. When all those electric cars and trucks are on the road, what happens to the old or dead batteries? To respond: Tesla claims that its lithium-ion batteries can be 100% recycled.

Q6. One man said he was “neutral” on climate change. He was going to wait and see if extreme weather events, such as wildfires, superstorms and hurricanes, got worse in the years to come.

Q7. A woman asked how urgent is it to reduce GHGs? If global droughts, wildfires, flood storms and hurricanes have not shown worsening over time over the past 40 to 50 years, why would they worsen over time over the past 40 next 50 years? To respond: It’s a good question. The urgency does not come from the last 40 to 50 years of extreme weather events (Figure 2). The urgency must come from the need to quickly control GHGs – climatologists use their models to predict that the world must flatten the GHG curve and start reducing GHG emissions by 2030 to escape the calamities of the twilight zone predicted for the earth by the year 2100. We’ll just have to wait until 2030 (or maybe 2050) to see if hurricanes get worse…or droughts, or wildfires, or super- storms.