Can you outline the Ipieca Principles and the best ways for your members to align with them?
Sullivan: Just over a year ago now, we launched the eight Ipieca Principles as a new condition of membership. Grouped around Ipieca’s four strategic pillars of climate, nature, people and sustainability, each area includes two principles: the first drives support for a UN convention or initiative; the second advances the environmental and social performance of member companies' operations.
Through our global membership and its reach and influence, the principles align a significant portion of the industry around the Paris Agreement, the UN Convention on Biological Diversity, the UN Guiding Principles on Business and Human Rights and the UN Sustainable Development Goals. The principles also clearly demonstrate the important contribution our industry can make to these conventions through operational good practice.
When we launched the principles, we also published a practical toolkit that gives examples of actions that members, and the wider industry, can take to operationalise the principles, along with Ipieca guidance that can support them to do so.
To mark the first anniversary of the Ipieca Principles, we published case studies of how members are living the principles with the hope of inspiring wider industry uptake of the principles and further contributions to key UN conventions.
How important is collaboration in addressing the goals of the transition to a global low-carbon economy?
Sullivan: I am convinced that collaboration is key to tackling the climate challenge and believe that the oil, gas and alternative energy industry has a large role to play in the energy transition by working to provide affordable and reliable energy—which is needed to fuel growth and im-prove living conditions—while decreasing emissions to support a net-zero world.
If the world is going to stay on track to hit the Paris Agreement goals then all parties and solutions have a part to play. While we need to do more to decarbonise faster, we must not lose sight of the fact that science-based pathways to the Paris Agreement goals must ‘ensure access to affordable, reliable, sustainable and modern energy for all’ (UN Sustainable Develop-ment Goal 7). This will require all energy sectors, including oil and gas, to play an important role in the global energy mix in the coming decades.
In addition to providing essential energy, the industry is leading on the research, development and operation of new low-carbon and mobility solutions, and will have a key role to play in supporting and scaling up the supply chains for these solutions.
Ultimately, a partnership approach will be needed to tackle climate change in a way that supports sustainable development. The oil and gas industry, along with all other sectors and parties, has an important role to play in helping governments turn their emissions reduction ambitions into a reality on the ground.
Do you see a big role for technologies such as hydrogen and CCS in the oil and gas industry of the future?
Sullivan: Hydrogen and CCS will both be key enablers of the energy transition, supporting the oil and gas industry’s contribution to a net-zero future. These technologies will also be essential for the decarbonisation of other sectors such as cement, plastics, steel, aviation and shipping. These are key drivers of the global economy, and indeed many emerging economies, but they produce significant greenhouse gas emissions and can’t be decarbonised with electrification.
The oil and gas industry will be essential to scaling up both hydrogen and CCS. At present most hydrogen is consumed by the industry, which is also one of the main producers, with the most common method of production using natural gas. A hydrogen economy can make extensive use of existing gas pipeline infrastructure, and many other synergies between the two fuels point to the oil and gas industry being a key partner in any future hydrogen economy.
CCS is another technology that the industry is leading on, and can also enable large-scale, cost-effective CO₂ mitigation. The vast majority of currently operational and planned CCS projects relate to the oil and gas sector. CCS is also a prerequisite for the development of low-carbon hydrogen and the enablement of low-carbon fuels and electricity to be used in transport, homes and the industrial sector.
A big part of Ipieca’s work is to raise awareness of these technologies and support collaboration within the industry and across sectors to support their sustainable scale up.
How can energy efficiency support the energy transition?
Sullivan: While hydrogen and CCS get most of the attention, when it comes to energy transition enablers we shouldn’t overlook the importance of energy efficiency as a tool in reaching a low-carbon future.
Reducing energy consumption is the most cost-efficient way of reducing GHG emissions and can make a huge impact on climate action. IEA analysis demonstrates that up to 40% of the emissions abatement required by the Paris Agreement could be delivered by energy efficiency. Importantly, taking energy efficiency measures not only lowers emissions but will generally also have a positive financial impact on operations—a win-win.
At Ipieca, we’ve recently updated almost half of our compendium of energy efficiency technologies and practices. Produced in partnership with IOGP, these web-based resources are freely available to all and provide guidance on energy efficiency technologies and best practices for use across the value chain, highlighting the business benefits of integrating them into operations.
How can the industry support a just transition?
Sullivan: A just transition is at the heart of what Ipieca does: our vision is to advance environmental and social performance across the energy transition. Our interconnected strategic pillars of climate, nature, people and sustainability enable us to work on these issues in a holistic way, maximising impact. In 2021 we established a Just Transition Task Force to support the oil and gas industry’s participation in the transition to a lower-carbon world in a way that’s just and fair for workforces, communities and consumers.
There is broad agreement from international development agencies, governments, NGOs, investors, companies, human rights organisations and civil society groups that the energy transition needs to be fair and not leave anyone behind. That means respecting the rights of communities and workforces—whether they are affected by the transition out of existing operations or by the development of new lower-carbon energy. We need to make lower-carbon energy affordable and reliable for all, while at the same time protecting the interests of vulnerable groups and making progress on the UN Sustainable Development Goals.
A just transition requires industry, and as part of this transition all sources of energy need to be managed in order to ensure access, security and progress. As a key pillar of the energy system, oil and gas is an important contributor to the ambitions at the heart of the UN Sustainable Development Goals, providing the energy needed to support fair growth and improved living conditions for all. Providing over half of the global energy mix, markets cannot simply switch off from industry if they are to support a smooth transition. As the incumbent sector in many places, the oil and gas industry has an unrivalled line of sight when it comes to how to support the transition, where investment is needed and what the economic, human and natural impacts might be.
Comments