"Regulations have been conducive to solutions," says Eirik Waerness.Courtesy Equinor
<p>“We had a complete ban on flaring gas from the very start. We didn’t know what to do with it; there was no natural market and we were far from the coast. So we injected it to keep the pressure up” in the reservoirs. Flaring the gas would have been cheaper, but Norway decided that wasn’t an option. “Regulations have been conducive to solutions,” says Waerness. Forced to deal with its gas, Statoil soon built one of the world’s biggest natural gas pipeline networks, and got in the habit early of incorporating a cost of carbon (now $50 per ton or more) into its accounting practices. Last year Equinor <a href="https://www.equinor.com/en/news/23mar2018-annual-sustainability-reports-2017.html" target="_blank" rel="nofollow noopener noreferrer" data-ga-track="ExternalLink:https://www.equinor.com/en/news/23mar2018-annual-sustainability-reports-2017.html">figures</a> it reduced the “CO2 intensity” of its operations by 10% to 9 kg of CO2 per barrel of oil recovered.<span class="Apple-converted-space"> </span></p>
<p>Big innovations can happen when CEO bonuses are tied to emissions reductions. For a decade Statoil/Equinor has been perfecting methods of injecting carbon dioxide deep into the earth for permanent sequestration. It’s now investing in solar farms in Brazil, and is putting to work its offshore engineering know-how with the world’s first full-scale floating wind turbines at a project in the North Sea called <a href="https://www.equinor.com/en/what-we-do/hywind-where-the-wind-takes-us.html" target="_blank" rel="nofollow noopener noreferrer" data-ga-track="ExternalLink:https://www.equinor.com/en/what-we-do/hywind-where-the-wind-takes-us.html">Hywind</a>. The size of the Eiffel Tower and producing 6 megawatts each, the turbines stand on buoyant bases that are inspired by decades of work building spar-type floating offshore oil platforms.<span class="Apple-converted-space"> </span></p>
<p>A hundred of these massive turbines installed offshore could offset the power generation capacity of a typical gas-fired power plant — a drop in the ocean of our clean energy needs, concedes Waerness, but vital nonetheless. “So much depends upon collective solutions to an enormous collective problem. What each one of us does, does not matter. But it matters anyway.”</p>
<p>In responding to global warming concerns, Equinor may have been early among big oil companies, but it’s not alone, with Shell, BP and Total all competing for the approval of European regulators and investors. Even ExxonMobil announced this week that it <a href="https://www.wsj.com/articles/exxon-puts-up-1-million-to-campaign-for-a-carbon-tax-1539079200" target="_blank" rel="nofollow noopener noreferrer" data-ga-track="ExternalLink:https://www.wsj.com/articles/exxon-puts-up-1-million-to-campaign-for-a-carbon-tax-1539079200">would direct $1 million </a>toward research into how a carbon tax could work for America (a fraction of its legal fees in fighting off the #ExxonKnew attacks). More significantly, Exxon is investing <a href="https://www.forbes.com/sites/christopherhelman/2018/02/13/over-a-barrel-exxonmobil-preps-for-the-low-carbon-future/#332c371170d8" target="_self" data-ga-track="InternalLink:https://www.forbes.com/sites/christopherhelman/2018/02/13/over-a-barrel-exxonmobil-preps-for-the-low-carbon-future/#332c371170d8">$1 billion a year </a>to develop revolutionary ideas that could someday scale into meaningful businesses — like fuel cells that generate electricity while sequestering carbon and engineering algae to make biofuel.</p>
<p>Norway, which has seen its carbon emissions drop<a href="https://www.ssb.no/en/natur-og-miljo/statistikker/klimagassn/aar-endelige" target="_blank" rel="nofollow noopener noreferrer" data-ga-track="ExternalLink:https://www.ssb.no/en/natur-og-miljo/statistikker/klimagassn/aar-endelige"> just 3%</a> since 1990 (U.S. emissions are roughly flat vs 1990), is indeed becoming a tougher place to be an oil company. Exxon and Chevron have <a href="https://www.reuters.com/article/us-chevron-norway/chevron-becomes-first-oil-major-to-exit-norway-idUSKCN1MK1JN" target="_blank" rel="nofollow noopener noreferrer" data-ga-track="ExternalLink:https://www.reuters.com/article/us-chevron-norway/chevron-becomes-first-oil-major-to-exit-norway-idUSKCN1MK1JN">recently sold</a> all their North Sea assets; BP merged its holdings with a smaller Norwegian company, while Shell and Total have also scaled back there. Even Equinor is having a hard time getting approval to drill in a pristine fishing area that they suspect hides a vast new oilfield. “We want the opportunity to at least analyze the consequences,” says Waerness. “We won’t do it if we can’t do it safely.”<span class="Apple-converted-space"> </span></p>
Equinor is hanging its offshore technology to paintings with the arena’s first full-scale floating wind generators on the Hywind mission close to Peterhead, Scotland.
“The pendulum strikes backward and forward, however the total development of pricing carbon is a somewhat heavy one. It might be a mistake to think it’s now not going to occur,” says Leader Economist Eirik Waerness.
Norway, due to a long time of oil and fuel drilling in its coastal waters, has the arena’s biggest sovereign wealth fund, with greater than $1 trillion in invested property. That’s an identical to kind of $200,000 for every of the five.2 million Norwegians.
Uncommon amongst the ones struck with the “useful resource curse,” Norwegians really feel roughly sheepish about owing their birthright to fossil fuels. Some of the international’s maximum zealous environmentalist states, Norway has pledged to turn out to be “local weather impartial” by means of 2030, and has imposed all way of emissions buying and selling and carbon taxes to get there.
Naturally, some assume Oslo should get out of the oil industry altogether, close down 70%-state-owned oil massive Equinor, and depart the oil and fuel within the flooring. Extra affordable is a push for the corporate to expand the assets it has, however forestall in search of new ones. But with the corporate on the right track to generate $five billion in internet source of revenue on file manufacturing volumes this 12 months, that wouldn’t be in the most efficient pastime of Norway, or the oil trade’s. “If we don’t do it, any individual else will do it somewhere else,” and with much less dedication to excellence and environmental accountability, says Eirik Waerness, leader economist at Equinor (the brand new, extra politically proper identify for the corporate previously referred to as Statoil).
Waerness may be head of downstream making plans and macro research for Equinor (NYSE: EQNR), so after we met this week I figured he’d be a excellent man to invite for some insights on how the remainder of Giant Oil can assist the transition to a low-carbon long run. The day past Yale College carbon economist Invoice Nordhaus had permitted the Nobel Prize, whilst a brand new record from the U.N. Intergovernmental Panel on Local weather Trade suggested emergency cuts to carbon dioxide emissions by means of a minimum of 75% by means of 2050 so as to restrict international warming to 1.five levels centigrade.
“Business wishes assist in atmosphere framework prerequisites,” says Waerness, whether or not or not it’s emissions quotas, a cap-and-trade device, or giant incentives for inexperienced power. Equinor is aware of this first-hand. “The merit is that we’ve been uncovered to framework prerequisites that experience put a value on carbon since 1991,” when Norwegians acceded to the improvement of offshore oil on their continental shelf however best at the situation of no flaring (intentional combustion) of the related herbal fuel.
“The pendulum strikes backward and forward, however the total development of pricing carbon is a somewhat heavy one. It might be a mistake to think it’s now not going to occur,” Waerness says. That admonition contains the US, the place the typical American’s deep-seated distrust of politicians and teachers promoting answers on the lookout for an issue makes the prospective imposition of a few roughly national tax on carbon very unpopular. “The place you have got few traditions in accepting the fixing of collective issues by the use of govt is the place the problem is the most important.”
“Laws were conducive to answers,” says Eirik Waerness.Courtesy Equinor
“We had a whole ban on flaring fuel from the very get started. We didn’t know what to do with it; there used to be no herbal marketplace and we have been a long way from the coast. So we injected it to stay the power up” within the reservoirs. Flaring the fuel would were less expensive, however Norway determined that wasn’t an choice. “Laws were conducive to answers,” says Waerness. Compelled to maintain its fuel, Statoil quickly constructed one of the vital international’s largest herbal fuel pipeline networks, and were given within the addiction early of incorporating a price of carbon (now $50 consistent with ton or extra) into its accounting practices. Final 12 months Equinor figures it lowered the “CO2 depth” of its operations by means of 10% to nine kg of CO2 consistent with barrel of oil recovered.
Giant inventions can occur when CEO bonuses are tied to emissions discounts. For a decade Statoil/Equinor has been perfecting strategies of injecting carbon dioxide deep into the earth for everlasting sequestration. It’s now making an investment in sun farms in Brazil, and is hanging to paintings its offshore engineering technology with the arena’s first full-scale floating wind generators at a mission within the North Sea known as Hywind. The dimensions of the Eiffel Tower and generating 6 megawatts every, the generators stand on buoyant bases which might be impressed by means of a long time of labor construction spar-type floating offshore oil platforms.
100 of those huge generators put in offshore may just offset the ability era capability of a normal gas-fired energy plant — a drop within the ocean of our blank power wishes, concedes Waerness, however essential nevertheless. “Such a lot will depend on collective answers to a massive collective downside. What every one in all us does, does now not topic. But it surely issues anyway.”
In responding to international warming considerations, Equinor can have been early amongst giant oil corporations, but it surely’s now not on my own, with Shell, BP and Overall all competing for the approval of Ecu regulators and traders. Even ExxonMobil introduced this week that it would direct $1 million towards analysis into how a carbon tax may just paintings for The united states (a fragment of its felony charges in combating off the #ExxonKnew assaults). Extra considerably, Exxon is making an investment $1 billion a 12 months to expand innovative concepts that would in the future scale into significant companies — like gas cells that generate electrical energy whilst sequestering carbon and engineering algae to make biofuel.
Norway, which has observed its carbon emissions drop simply three% since 1990 (U.S. emissions are kind of flat vs 1990), is certainly turning into a harder position to be an oil corporate. Exxon and Chevron have just lately bought all their North Sea property; BP merged its holdings with a smaller Norwegian corporate, whilst Shell and Overall have additionally scaled again there. Even Equinor is having a troublesome time getting approval to drill in a pristine fishing space that they think hides an unlimited new oilfield. “We wish the chance to a minimum of analyze the effects,” says Waerness. “We gained’t do it if we will’t do it safely.”