By Ben van Beurden
One of today’s biggest challenges is to boost economic development, while protecting the environment at the same time. Energy is right at the heart of both matters. The world needs more energy, cleaner energy and affordable energy. The Middle East is no exception to this reality.
Today, as I attend the International Petroleum Technology Conference (IPTC) in Qatar, it is ever clearer to me that technology is pivotal to a sustainable energy future. This future cannot be created by single governments or stand-alone energy companies. Partnerships are needed to make it happen.
Over many decades of operating in the Middle East, Shell has developed strong relationships in the region. In Qatar, for example, we work closely with Qatar Petroleum. The flagship project of this collaboration is Pearl GTL, the world’s largest gas-to-liquids plant. Pearl is a technological gem based on more than 3,000 patents, with some research dating back to the early 1970s.
Another example of technological partnership is the Qatar Carbonates and Carbon Storage Research Centre. This research centre is jointly funded by Qatar Petroleum and Shell, with additional support from the Qatar Science and Technology Park. The aim is to expand research capacity in cleaner fossil fuels as well as in carbon capture and storage (CCS). CCS technology captures CO2 and stores it safely under the ground or in depleted gas fields.
Shell is working to advance technology for a sustainable energy future in other countries in the region too, for instance in Oman. Petroleum Development Oman - a joint venture between the government, Shell, Total and Partex - is running a promising pilot project to increase energy efficiency. A company called GlassPoint harnesses and concentrates sunlight to produce steam for enhanced oil recovery. The gas that would otherwise be used for oil recovery can now be used for petrochemicals, LNG export or generating power locally.
In Kuwait, we partner with the Kuwait Oil Company in developing a challenging sour gas field. It is called sour gas because it contains high levels of hydrogen sulphide, which is both corrosive and poisonous. This poses particular technical challenges. But why is gas important for a sustainable energy future in the Middle East? Although every country in the region faces its own challenges, most of them have two things in common. First, a rising demand for energy. Second, a growing gap between demand and domestic production. As a result, countries are now reshaping their energy mix.
Renewable sources like solar and wind are undoubtedly a crucial part of the region’s energy future, but must overcome technical and commercial challenges if they are to achieve the scale needed. And to date, the UAE is the only Arab nation to have started a nuclear energy programme. In other words: abundant, cleaner-burning gas should continue to play a crucial role in power generation.
Increasing homeland production is an important step towards meeting the demand for gas. Contrary to common beliefs, the Middle East holds vast resources of gas, particularly sour gas. To develop the energy resources safely, one needs special materials and processes. Shell has over 60 years of experience in developing highly sour gas fields, and we are increasing our expertise every day. Not only in Kuwait, but also, for example, in Oman.
These are all good examples of how technology can help tackle challenges in this region. Technology alone, however, is not enough. Government and business need to work together, in the same direction.
The Middle East is at the start of an energy transition. Economic growth is spurring demand, but the region also has to manage its carbon emissions. As a result of climate change, some parts of the Middle East could become hotter and drier than they already are. Other parts, such as low-lying coastal areas in Qatar, could suffer from rising sea levels. Qatar acknowledged this in its submission to the UN Climate Conference that is currently under way in Paris.
Energy companies can only invest confidently in the technology needed to help tackle these challenges if the right incentives are in place, such as government-led carbon pricing systems. These pricing systems will help create a level playing field. They would ensure one energy source is not favoured over the other; and that business and industry are more able to choose practical ways to reduce CO2 emissions. This will drive investments in the most effective technologies at the lowest cost.
Through long-term partnerships, Shell’s technology and expertise have contributed to the economic development of the Middle East by creating jobs, building supply chains and providing energy resources. After many decades of doing business in the region, our commitment to the Middle East is still as strong as ever. Shell aspires to be a partner to countries in the region for a long time to come, helping to provide technological solutions for more, cleaner and affordable energy.
♦ Ben van Beurden is CEO of Royal Dutch Shell
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