Major technologies to decarbonise power?

Leading Oil Majors will play a crucial role in decarbonising the energy system. Their initiatives should therefore be encouraged by policy-makers and ESG investors, particularly where new energy technologies are being developed, which will unlock further economic opportunities to accelerate the transition.

In order to help identify the leading companies, this-data file summarises c90 patents for de-carbonising power-generation. It is drawn from our database of over 3,000 distinct patents filed by the largest energy companies in 2018. These technologies will secure the role of fossil fuels, particularly natural gas, in a decarbonising energy system.

De-carbonising carbon?

Decarbonisation is often taken to mean the end of fossil fuels. But it could become more feasible simply to de-carbonise fossil fuels. This 19-page note explores two top opportunities: next-generation combustion technologies, which can meet the world’s energy needs relatively seamlessly, with zero carbon and little incremental cost. They are ‘Oxy-Combustion’ using the Allam Cycle and Chemical Looping Combustion. Leading Oil Majors support these solutions to create value advancing the energy transition.

China’s Shale Challenge?

China’s future gas production, and thus its need for LNG imports, depends heavily on its prospects in shale: Technically recoverable resources have been assessed at a vast 31.6TCM by the EIA.

But >50% shortfalls are looming against the 2016 target to produce 30bcm by 2020. Production ran at just 11bcm last year. And many Majors have now exited. So what are the main challenges, hindering development?

In order to answer this question, we have summarised ten recent technical paper on the Chinese shale gas industry.

This data-file tabulates the most-cited challenges, and the solutions that are suggested to combat them. It also includes our “top ten conclusions” on Chinese shale gas.

Oil Companies Drive the Energy Transition?

There is only one way to decarbonise the energy system: leading companies must find economic opportunities in better technologies. No other route can source sufficient capital to re-shape such a vast industry that spends c$2trn per annum. We outline seven game-changing opportunities. Leading energy Majors are already pursuing them in their portfolios, patents and venturing. Others must follow suit.

Chemical Looping Progress?

Chemical Looping Combustion is a next-generation technology for carbon capture, with potential to “clean up” fossil fuel power and obviate CO2 emissions. Costs and energy penalties are dramatically lower than current technologies. E.g., TOTAL is trialling CLC to create power from petcoke.

But does it work? To answer this question, we have tabulated data from the technical literature on tests (to-date) of 40 chemical looping combustion pilots, which have run collectively for 10,000 hours.

Operational data are also presented from one trial, suggesting a 38% conversion efficiency of the energy in fossil fuels, leading to economic cost estimates (below).

Shale EOR: the economics

This model assesses the economics of a shale-EOR huff’n’puff project. NPVs and IRRs can be stress-tested as a function of oil prices, gas prices, production-profiles, EUR uplifts and capex costs. Our input assumptions are derived from technical papers. We think that economics are increasingly exciting, as the technology is de-risked. As more gas is stranded in key shale basins, base case IRRs rise from c15% well-level IRRs to c20%.

The World’s Great Gas Fields and Their CO2

The CO2 content of gas fields is going to matter increasingly, for future gas development decisions: CO2 must be lowered to 50ppm before gas can be liquefied, adding cost. Moreover, it is no longer acceptable to vent the separated CO2 into the atmosphere.

Large, low-CO2 resources like the Permian, Marcellus and Mozambique are well-positioned to dominate future LNG growth.

This data-file tabulates 30 major gas resources around the world, their volumes, their CO2 content and how the CO2 is handled.

Small-Scale LNG liquefaction Costs: New Opportunities?

Cutting-edge LNG technologies can deliver 15% pre-tax IRRs, taking in $3/mcf gas and selling $10/mcf LNG: even after scaling down to nano-sized 4kTpa units. This data-file shows our workings, across six tabs.

The model tabulates our best-estimates into the costs of typical small-scale LNG projects (SMR and Nitrogen Expansion, below).

We also present and contrast a novel small-scale LNG technology, Galileo’s Cryobox, including economic sensitivities (below).

LNG in transport: scaling up by scaling down?

Next-generation technology in small-scale LNG has potential to reshape the global shipping-fuels industry. Especially after IMO 2020 sulphur regulations, LNG should compete with diesel. This note outlines the technologies, economics and opportunities for LNG as a transport fuel.

How do LNG costs vary with plant size?

This data-file tabulates a dozen data-points on LNG plant opex, from company disclosures, the technical literature and academic papers. Opex is a function of plant size, and tends to fall by $0.3/mcf for each 10x change in plant capacity.