“In a low-carbon future, we need oil & gas producers who can deliver energy at low cost, with low emissions. Therefore, the NCS will become even more attractive and important,” says Statoil CEO Eldar Sætre.
Sætre is speaking today at the Autumn Conference 2016, hosted by Statoil in cooperation with the Norwegian Ministry of Petroleum & Energy and the International Energy Agency.
Two of the United Nations' Sustainable Development Goals specifically address the need for energy for all and the need for urgent action to combat climate change. Reaching them will require the biggest transition our modern-day energy system has ever seen.
“The world has more fossil resources than it can burn, and the global energy mix has to change. If policy makers are serious about climate change, dramatically and rapidly reducing coal must be an urgent priority. Coal can be replaced with continued growth in new renewable energy and natural gas. The climate simply cannot afford to disregard the immediate and significant effect natural gas offers,” says Sætre.
A quality portfolio
Globally oil demand is still growing by approximately 1.5 % annually. To reach the ambitions from Paris we need to see peak demand soon. Today, the world's almost one billion cars consume around 25% of global oil production.
By 2040, almost all new cars have to be close to zero emission. Today 0.1% are. With heavy trucks, airplanes and ships, the transition will take more time. This is 25% of today's oil demand, and growing. In petrochemicals demand is expected to continue to grow.
“In a low-carbon world, how oil and gas is produced – and which barrels are produced – will increasingly matter. It will come down to producers who can deliver energy at low costs with low emissions. Removing highly CO2-efficient barrels does little to reduce global oil demand – it simply allows demand to be filled by resources with higher costs and higher emissions,” Sætre says.
On the Norwegian continental shelf carbon emissions are approximately half the reported global average.
“Statoil's ambition is to remain a global leader in cost- and carbon-efficient oil and gas production. Together with the rest of Norwegian industry, we will cut almost 4 million tons of CO2 by 2030. It equals emissions from 7 out of 10 cars on Norwegian roads. This is real impact,” Sætre says.
Investing in transition
While Statoil will continue to explore for oil and gas barrels that offer value to society and can be produced with low emissions, the company is investing in the energy transition.
Sætre sees renewables as a natural complement to Statoil's portfolio industrially, strategically and financially. Statoil is already well established in offshore wind with projects that have the potential to deliver electricity to five million homes in Europe. Next summer, Statoil will install the world's first floating wind farm in Scotland.
“Statoil is an energy company, and renewables are part of our core business,” says Eldar Sætre.
Collaborating for a low-carbon future
Tackling climate change will require the largest public-private partnership the world has ever seen. Today it is technology, more than policy, that is the driving force behind the transition. New and smart policies are necessary to succeed.
“The climate debate is still long on words, but too short on action. Without a global perspective, we risk national measures with little real impact, reducing the opportunity to reach our common goals. An effective price on carbon is the best place to start, together with targeted regulations and partnerships to enable industrial scale investments in new solutions,” says Sætre.