IEA releases energy investment report, with oil, gas and coal investment falling heavily

The International Energy Association has released its findings in regards to investment in the energy sector in 2016, which accounted for 2.2% of global GDP. Investment in oil and gas fell by over 25% from 2015, and in power generation by 5%, while spending on energy efficiency rose by 9%. China enjoyed the lion’s share of investment at 21% of the global total, though investment in coal-fired plants in China fell by 25%, while renewables increased. The United States enjoyed the second highest investment, with Europe as a whole third, ahead of India and Russia. While investment in oil and gas was down considerably, investment is expected to rise moderately this year, especially in the US, due to the shale revolution and somewhat higher oil prices. Average annual investment in new coal-fired capacity has declined from around 130 GW between 2006-10, to around 80 GW between 2011-15, to just 40 GW last year – a remarkable fall, probably due to the rise of gas and renewables and falling or stagnant electricity demand. The wide range of data makes interesting reading.

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Trump administration sending mixed messages about fossil fuel research

The New York Times has looked at the political manoeuvres between the US Department of Energy and the Trump administration, in particular the energy secretary, Rick Perry. The administration currently plans to reduce the DoE’s Office of Fossil Energy – which has in the past developed mercury scrubbers, deep-sea drilling hardware and low carbon combustion technologies – by 54%, even while the administration’s rhetoric is around supporting the conventional energy sector. Mr Perry visited the National Energy Technology Laboratory in Virginia, which may be affected by the cuts, telling its staff “You and your predecessors have really worked to change the world,” and “What you do here matters.” The mix of praise and looming budget cuts is a confusing one, but Grace Bochenek, the head of NETL, said she saw Mr Perry’s visit as an opportunity to educate the energy secretary so that “he can make a better decision.” If the administration intends to promote fossil fuel extraction and use, it would seem essential to develop technologies to enable it to be done cleanly, a point made by Howard Herzog of MIT, who told the New York Times “The only way you’re going to be able to use the majority of fossil fuel assets in the United States while also addressing climate change concerns is to use [carbon capture and storage] technology.” Whether the administration will see and act on the logic remains unclear – the federal budget for carbon capture and research technology development is to be cut from US$200 million (€172 million) to US$35 million (€30 million) for the financial year beginning in October.

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India moves to create major state-owned oil and gas company

India has begun moves to create a national oil and gas company to rival major international companies, according to a report by the Financial Times, with the government approving the sale of the state-owned majority of Hindustan Petroleum Corporation to Oil and Natural Gas Corporation, also state-owned. Arun Jaitley, the country’s finance minister, had announced the government’s intentions earlier in the year, saying “We propose to create an integrated public sector oil major which will be able to match the performance of international and domestic private sector oil and gas companies.” The goal is for an oil and gas company that covers everything from exploration and extraction to retail. The structure of the deal has yet to be decided.

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BP leads oil and gas companies in big data push

BP and other oil and gas companies are investing in ‘big data’ collection and analysis to improve their efficiencies, according to a story in the Financial Times. Just as GE is pushing its digital services for heavy industry, promising operating efficiencies, oil and gas companies are investing significantly as they look to economise during the curent prolonged period of low oil prices. BP’s vision is “to have an absolute knowledge of what’s happening in the field”, and to reach that the company is to increase its data storage capacity six-fold by 2020 to 6 petabytes, while also utilising artificial intelligence and machine learning. BP has already spent several hundreds of millions of dollars in becoming ‘digital’, and it has paid off – reliability of production facilities has increased from 88% in 2012 to 95% in 2016, giving over US$7 billion (€6 billion) in savings since 2014. One of the key advances has been in the creation of ‘digital twins’ to physical assets, essentially highly advanced computer models that can simulate maintenance and other interventions before they are implemented in the field. BP says it sees “a symbiotic relationship between machines and humans where artificial intelligence optimises the choices for people to make.”

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Beijing to reduce coal firing by more than half

The city of Beijing has announced that it plans to reduce coal firing in its vicinity from the current ~11 million tonnes annually to less than 5 million by 2020, as Reuters has reported. The steep drop in coal firing will be offset by an increase in the use of gas and a minor increase in the use of renewables, and at the same time the city will try to cap its production of greenhouse gas emissions. Residents will be hoping that the reduced coal firing will lead to lower levels of smog, as the municipality intends.

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Statoil to partner with Vattenfall and Gasunie to explore hydrogen firing unit

Norway’s state-owned oil company Statoil has signed a memorandum of understanding with Vattenfall and Gasunie to explore options to convert one of the three gas-fired units at Vattenfall’s Magnum power station in Eemshaven, Netherlands, to fire hydrogen. The station is operated by Vattenfall’s subsidiary Nuon, which last year announced it was already looking into options to combust ammonia produced from hydrogen, which in turn would be produced from renewable electricity separating water into H₂ and O₂. It is not clear from the new announcement if the MoU is a revision of the previous concept or an entirely new one, but as it covers CO₂ capture from hydrogen production from natural gas, it appears to be the latter. For Statoil, the benefit in the project may lie in a low-carbon future for gas in converting it to hydrogen and removing carbon in the process, which may be more efficient than post-combustion CO₂ capture. Gasunie’s role will involve transport and storage of the various gases. The innovation, according to the announcement, will be in developing a large-scale value chain for the firing of hydrogen (the current gas-fired unit has a 440 MW output capacity). Statoil has already been involved in carbon storage projects in Norway, and will bring that expertise to the project, which is sure to be of interest to the wider combustion community.

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Inventys raising financing for pilot-scale ‘next generation’ CO₂ capture plant

Canadian company Inventys has raised CAD$10 million (US$8 million/€6.8 million) in its latest financing round for a pilot-scale 30 tonne/day ‘next generation’ carbon capture plant to be deployed in Saskatchewan, Canada. According to Inventys President and Chief Executive Officer, Claude Letourneau, the facility will become “the world’s first pilot-scale plant using structured adsorbents to capture CO₂ from a once-through steam generator (OTSG) for use in heavy oil recovery.” Inventys tested a 0.5 tonne/day field demonstration of its technology, VeloxoTherm, at the same site (a Husky oil field) earlier this year. The technology incorporates a solid adsorbent structure with a rapid cycling temperature swing adsorption process, which the company says captures CO₂ economically, and with Canada’s excellent track record in carbon capture and storage, there is reason for optimism.

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Need for carbon capture – both agriculturally and industrially – severe, according to new paper

Such capture technology will be desperately needed in the future, according to a team of scientists led by former NASA climate science chief Professor Jim Hansen writing in the Earth System Dynamics journal. They wrote “the world has already overshot appropriate targets for greenhouse gas amount and global temperature, and we thus infer an urgent need for rapid phasedown of fossil fuel emissions [and] actions that draw down atmospheric carbon dioxide,” arguing for global action, mostly in the form of tree planting and soil fertility improvements, but also with biomass firing with carbon capture and storage. In an interview with The Independent, Prof. Hansen said that while there is a sense of optimism around the fight against climate change at present, he believes that the situation is much worse than commonly believed, with total greenhouse gas emissions rising. He described the current situation as the “s**t hitting the fan”.

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RWE begins planning process for gas-fired plant at Tilbury, UK

RWE has begun the regulatory planning process to build a new 2.5 GW combined cycle gas-fired power station on the site of the old biomass-fired Tilbury power station in Essex, UK. After closing the old plant in 2013, RWE began demolishing it this year, a process which is due to be complete sometime next year. The announcement of the beginning of the planning process comes as a boost for gas firing in the UK, after planning for a 1.9 GW plant near Manchester stalled last year because of financing problems, and with other companies such as ScottishPower also not proceeding with plants. The news is conditional, however – RWE will not make a final decision on investing in a new plant just yet, waiting to judge future market conditions and commercial viability.

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Drax appoints former World Wide Fund for Nature CEO to its board

UK power generator Drax has appointed former chief executive of the World Wide Fund for Nature, David Nussbaum, as a non-executive director, in a move that has attracted headlines. Drax has six power stations and has converted much of its generation capacity to fire wood, such that it now produces 70% of its electricity from the renewable source. Time will tell if Mr Nussbaum’s appointment will push Drax towards a lower-carbon future or is more of a reputational move as biomass firing’s public image sours somewhat.

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