Offshore Energies Magazine - Issue 55 Spring 2023

tumbled," he said. This longer term view is often neglected, as headline-writers need eye-catching images. ‘Major makes 10% average yearly return on capital over a decade’ – to paraphrase Mr Wirth – is not going to catch anyone’s eye. And taken out of context, an exceptional year, in exceptional circumstances, can give the wrong message: in fact more, not less, upstream oil and gas investment is needed. Politicians have over-promised and under-delivered on decarbonisation, failing to produce properly costed strategies or business models. Germany for example has just closed its nuclear sector. Announcing his company's 2022 trading results, BP CEO Bernard Looney said: "It's clearer than ever after the past three years that the world wants and needs energy that is secure and affordable as well as lower carbon – all three together, what's known as the energy trilemma. To tackle that, action is needed to accelerate the transition. And – at the same time – action is needed to make sure that the transition is orderly, so that affordable energy keeps flowing where it's needed today. " That action includes an increased investment into "resilient high-quality oil and gas projects" by an average of up to $1bn/yr, or up to a cumulative $8bn to 2030. The investment will help to meet near-term demand for secure supplies of oil and gas, generating additional earnings that can further strengthen BP and support investment in its transition. Readers in the UK are not only shielded from the realities of trade: they also do not pick up on the IOCs' decarbonisation efforts abroad. The US major ExxonMobil says it is on track to meet its goal of zero upstream routine flaring worldwide by 2030 in support of the World Bank’s initiative. It says it has cut its methane emissions intensity at all operated EU competes with US on green incentives The US Department of Energy expects domestic gas demand to grow only marginally from now on, it said in March, with export markets providing the impetus for more development. In its latest long-term energy outlook it says it expects the US to remain a net exporter of petroleum products and natural gas until at least 2050. Against this background of abundance and the inherent competitive industrial advantage that low prices bring, has come a significant, man-made advantage: the Inflation Reduction Act (IRA). The Democrats have described it as an "historic down payment on deficit reduction to fight inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40% by 2030." But the tax breaks have already prompted some European energy intensive industries to consider moving production there. And concerned the US has stolen a march, the European Commission (EC) published its own strategy March 9 justifying public spending for green projects. It has

"Solving challenges through technology is key to shaping the future energy system." – Chevron These profits are being poured into new ventures: its Baytown facility is expected to produce 1bn ft³/ day of low-carbon hydrogen, making it the largest of its kind anywhere, with an expected startup in 2027 2028. More than 98% of the associated CO₂ produced by the facility, or around 7mn tonnes/yr, is expected to be captured and permanently stored. The carbon capture and storage network being developed for the project will be for third-party CO₂ emitters in the area to support their decarbonisation efforts. proposed a Net-Zero Industry Act (NZIA), which aims to scale up the manufacturing of technologies that are key to achieving climate-neutrality such as solar panels, batteries and electrolysers. This extends to photovoltaic cells or the blades on wind turbines. The NZIA, its says, will simplify the regulatory framework for the manufacturing of these technologies and therefore help increase the competitiveness of the net-zero technology industry in Europe. It will also accelerate the capacity to store CO₂ emissions. As part of the proposal are net zero regulatory 'sandboxes' to test innovative technologies in a controlled environment for a limited amount of time. It means that member states can bring in exceptional and temporary exemptions from regulations allowing the development, testing and validation of technologies before they are marketed or put into service. The objective is to approach or reach, in aggregate, at least 40% of the annual deployment needs for strategic net-zero technologies manufactured in the EU by 2030. assets by more than 40% since 2016. Its large profits also reflected its decision to take calculated risks that might have not paid off. "While our results clearly benefited from a favorable market, the counter cyclical investments we made before and during the pandemic provided the energy and products people needed as economies began recovering and supplies became tight. We leaned in when others leaned out," it said. The annual improvement was driven by a 46% increase in gas sales and nearly 10% in crude.

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