Utstillning image

Day 1 Recap

Read our full recap of Day 1 of UTC2022 to learn more about what happened in the plenary sessions in Grieghallen. 

A huge amount has changed in the energy landscape in the past two years and even just the last six months. The trends and challenges were very well reflected in today’s Day 1 opening plenary session and into our afternoon keynote sessions. From production cuts to today’s demand for gas for Europe and from marine mineral potential to supply chain challenges in offshore wind, we have covered a lot of ground.

Tina Bru kicked off the morning, as we were unable to hear from Jan Christian Vestre – Norwegian Minister of Trade and Industry. Tina reflected on her time as Norwegian Minister of Petroleum and Energy. It was a wild ride. Oil prices went from a relatively stable $55/bbl to $15/bbl as Covid bit.

“I never in my wildest dreams had thought I would be making production cuts on the NCS,” she said. A temporary tax regime was set up for offshore producers while, against a backdrop of low-cost energy and Norway having a lot of renewables, policy to curtail onshore wind was introduced. A year later, the world was flipped on its head. As the world came back online, there wasn’t enough power and then the war in Ukraine hit. “We’ve gone from a situation where those who want to end production have dominated the public conversation to a situation where the EU is pleading with Norway to produce more gas,” says Bru. “Now oil and gas is a geopolitical security issue in a way it hasn’t been before.”

“We have also gone from poking fun at the EU to a more emotional debate on European freedom and democracy,” she says. “It’s easier now to say you are pro-EU. (and) we’ve gone from a consensus that we need to constrain plans for new renewable energy to we’re not building enough. Things have fundamentally changed in just a year.”

Yet, the debate is polarised, she says. “The road leading us to the green shift is going to be very bumpy and if we don’t talk honestly about that people are not going to come along for the ride. We need your voices. Politicians can’t do this alone. You need to showcase the jobs and show young people where it’s at. You have to join in the public discussion.”

IOGP Director Engineering & Standards, Adri Postema highlighted how subsea projects have a significantly lower carbon footprint than surface projects and that subsea tiebacks are an efficient way to make use of existing infrastructure, as well as enabling CCS.

He also highlighted innovation there has been towards on all electric systems. Replacing hydraulic control systems can provide lighter infrastructure with more data. “But all electric is more valuable if we all go electric, for all components, but also for all operators,” he says.

He also called on the industry to share results more broadly. “Broader information sharing would help accelerate the transition,” he says. Gaps in documentation, standards, specifications and best practise need to be identified and closed, he says, highlighting how much IOGP’s JIP 33 on standardisation has achieved – but also how much more could be done, including standardisation opportunities for power and communication routers, subsea power and storage systems, control modules, electrical safety and control valves and other electrical components.

Energy crisis and climate crisis – two crises or one?

Returning once more to UTC with his sharp analysis was Tim Gould, Head of Division, Energy Supply and Investment Outlooks, IEA. “We’ve discussed the energy crisis. We’ve discussed the climate crisis, the call from our side is to join up our thinking. We don’t need to choose between the two,” he told the conference.

“Markets were tight before the invasion. But now we are in a new energy world and I don’t think there’s a way back to where we were before February,” he says. “In the near term we need to have in mind the scale of Russia’s position in global energy. It’s not at all simple if supplies of this magnitude are disrupted or rerouted. A key question is if this crisis is an accelerant for energy transition. In our view, it is for Europe and the REPower plan is a sign of that.” [But] Today’s crisis could make some countries double down on fossil fuel, he says. “There’s also a risk that higher prices spur investments that lock in fossil fuels for some years to come, he says.”

“As we look into 2023, we’re looking at 2.2 mmboe/d growth in demand compared with 1.8 mmboe/d growth this year, says Tim. Global oil supply may struggle to keep demand with this growth. And, “How quickly can we scale up alternatives for electricity and heat? We’re watching carefully Europe’s refilling of gas storage. It’s going quite well and a reason for that is other suppliers have stepped in. Russian supplies to the EU are down by about one third this year. That’s been filled by gas from Norway and record LNG import from the US.” But there isn’t going to be

a lot of new LNG coming to the rescue in the next couple of years and every importer is fishing in the same pond for the stuff.

Where might we get additional gas? Tim highlighted a report released by the IEA yesterday that showed more than 200 billion cubic metres of gas could be available to natural gas markets if we had a concerted global effort to eliminate non emergency flaring and reduce methane emissions from operations. Fuel for thought!

Jefferson Edwards, VP Shell LNG Marketing and Trading, Shell, also addressed LNG. He says we’ve seen a 52% increase in LNG into Europe this year. The only reason that’s been able to happen is because of the economic downturn in China, due to their lockdown, says Jefferson. If China starts to recover and we have more supply outages in North America, this market could get very tight. We can’t get complacent.”

“We need gas, but it needs to be much lower emissions intensity,” he added. “We have to shift from a methane problem to how supply energy in a gaseous form in a lower emission way.”

Attracting the next generation; overcoming hurdles

In our panel debate, ONS Young project manager Mille Marie Isaksen stole the show with her frank honesty and her young person’s perspective, recalling a comment by a past EU president that politicians know how to solve the climate crisis, but not how to then get re-elected. For today’s young people, one of the main hurdles that our young generation is feeling right now, is the pace of the green shift is too slow and this is very frustrating, she says.

Expanding on this in her keynote, she said, “I don’t think there’s many years left of convincing my generation that this [the offshore industry] is a place with credibility. You have to show some evidence you have a plan for the transition. If you don’t have a plan, you need to be honest about it.”

Her tips on how to attract the retain young people into the subsea industry were not to have identikit values, to look at what your values actually are and be transparent about them; to look at why you want to hire young people; to be on social media – it’s used like Google now by young people; to make your entry options visible; to reach out and offer mentorship; and last – but most important – to earn trust. “Trust is something you earn, as a young employee, as a company and as colleagues,” she said. 

“Speak up – the industry needs a louder voice”

Back in the debate, Tina Bru also said the industry needs to speak up. “My sense is that, following the energy debate, there are so many ‘I know everything’ people with strong opinions that actually don’t know everything,” she says. “Where are you in the commentary? You need to join in. If not, it’s an arena left to those who think they have the answers, but don’t. You need to speak with media outlets, speak to young people. These are complex issues. we need the people who know how this works to join in the conversation.”

Focusing on marine minerals and offshore wind

Following the panel debate, we also heard from Tore Halvorsen – Chief Technology Officer (CTO), Loke Marine Minerals, and Stuart Fitzgerald – Chief Executive Officer, Seaway 7, focusing on deepsea mining and offshore wind, respectively.

Tore says marine minerals have a role in the energy transition and Norway can play a strong role. 85-96% of remaining resources of cobalt, nickel and manganese are underwater and they’re difficult to get at, but we have the technology to access that. “We have to stand on the technology shoulders of subsea if we are going to make this a success. It’s deep, it’s cold, it’s remote, up to 6 km down there, and you’re supposed to operate safely and with an environmental hat on. I can understand why terrestrial miners are not that interested.

“There’s no technology that’s out there that’s qualified or environmentally good enough today,” he says. “The two most critical areas are the vertical transportation part, pumping 500 to 1,000 tonne per hour, day out, day in, without clogging. The second is the harvesting machine on the seabed with minimum disturbance on the seabed. We have to raise the bar of innovation in these areas.”

Stuart talked through the fixed bottom offshore wind industry. This is a business driven by quantity and scale, he says. It’s also a growth business. Some 24% CAGR is expected in the decade 2020 through to 2030. “We’re seeing that volume coming into play,” he says, but “the ability of the market to deliver maybe a question.”

Political, climate and energy security drivers are pushing forecasted capacity additions up. The kit is also getting larger. In 2010, the industry was installing 500 tonne monopiles, he says. By the end of the decade that had doubled and today we’re putting in 938 tonne structures, says Fitzgerald. Into 2023-24, that’s going up to 2,500-3,000 tonne. 

Is there enough vessel capacity to make this happen? “In each vessel category we see a shortage,” says Fitzgerald. “There are high barriers to entry in a number of those segments. It’s difficult on profitability. The challenge that’s coming is around this needing to become a more profitable business so it can justify the investment to meet these ambitions.”

But despite the challenges and risks – including pace of growth and operating in new geographies – “it’s a phenomenal opportunity that sits in the market macro of strong growth over a long period of time,” says Fitzgerald.