The opportunity to take part in and speak at CERAWeek, a conference known as the Davos of Energy was a great experience. I realised the value of being back at a live event – you learn a lot, gain new insights and make a lot of meaningful new connections in a short space of time.
You also have fun – a lighter note was an amazing Broadway musical performance at dinner, called “CERAWeek Sings”. This told the story of energy, from the discovery of the first oil wells, to the invention of fracking and unconventional drilling by George P Mitchell, right up to the energy transformation. I can see the potential for Water – The Musical already! First, I wanted to capture some of what I learned at the event.
The energy transition: the molecule and the electron
When it comes to the energy transition – the move towards zero carbon emissions energy – you can divide people in the world of energy broadly into two groups: those who focused on the molecule and those drawn to the electron. Dan Yergin observed that the CEO of Exon, Darren Woods, was more focused on the molecule. That was a reference to the focus on carbon capture as the way to decarbonise the energy sector.
There was a lot of solid data shared on the economics of carbon capture and in particular, how natural gas, even with carbon capture costs laid on top of it, is an economically viable transition fuel. Aramco and many others, shared a view that if you could sequester carbon for under $150 per ton, this cost could be absorbed into the cost of natural gas and used to decarbonise the ‘hard to decarbonise’ sectors. If you take away any inherent bias towards a particular pathway to the reduction of global carbon emissions, and remain agnostic, then the economic case put forward, is a strong one. There was consensus that while costs for carbon capture are generally in the range of $400-$600 per ton, that a pathway is there, and certain technologies hold the potential to do this for $100-$200 per ton.
In the context of the energy transition, the oil and gas companies also have a natural bias towards the molecule, which explains why they are among the strongest advocates for hydrogen as an energy carrier. They understand hydrogen. It can be put into pipes and trucks can move it; it burns and releases energy via a chemical reaction. It’s a little of Maslow’s Law of the Hammer and some of what Paul Martin calls the Hopium. There is danger of a hydrogen echo chamber.
“Almost free” green electrons shifts economics
The lowest cost I heard cited for solar electricity was from a new facility in Saudi Arabia: 0.4 Cents per kWh. That’s under a half a cent a kilowatt hour. Now, that is the cost as an input to an energy grid, that has to be operated and maintained and billed. Not the cost to the consumer. Consider it as the raw material input cost. Nevertheless, it is incredibly low. As a consumer, one would be doing really well to be buying electricity at 10 cents per kWh and its often much higher, 25 cents or more per kWh. It is made possible because the conditions in Saudi Arabia, are particularly positive, over 200 days of occupancy each year, and low maintenance costs due to less need to clean the panels. Other figures cited for solar electricity were 1 cent per kWh. Consider what energy at those rates does for the economics of desalination, or even atmospheric water capture.
Striking parallels between AI and digital in energy and water
Often in the water industry, where I spend most of my time, I sometimes wonder, are we at risk of drinking our own Kool-Aid when it comes to AI and digital twins? Well, if we are, we have close cousins in the energy sector that are drinking it too. Pretty much everything I hear in the world of water, I heard analogues of, multiple times in multiple sessions, in the world of energy.
AI in energy can reduce fugitive emissions, optimise upstream and downstream processes, reduce Scope 1 and Scope 2 emissions and help with asset management. The leading Columbian energy company, Ecopetrol, shared examples of using satellite data from Earth Observation Science to look at how to reduced flaring and fugitive emissions.
The same debates and discussions played out, about how to get data and use it create value and the potential to drive efficiency. Water is very similar, except instead of fugitive emissions and flaring, AI in water reduces unaccounted for water. Pressure management in water, can reduce leakage rates, prolong the life of assets and reduce the energy footprint of providing water
I see the potential for things the water sector can learn from how AI and digital is used in energy and vice versa.
The role of water in the energy transition
The session in which I was invited to speak at was the only dedicated water panel.
The key rule for any presentation is ‘know your audience’. With that as the guiding principle, I shared a number of ideas that were additive to the conversation at CERAWeek. The panel was well received and I think it spoke to the deep ties that do exist between these adjacent worlds.
The role of water in climate change
Yes, we all know that we will experience climate change through water. What is lesser known is that water in the atmosphere is a greenhouse gas (GHG). The story of climate change is often reduced down to the story of one single molecule, CO2. Other gases that have a GHG effect, are expressed as CO2 Equivalents (CO2e). The climate is a complex system, there are multiple inputs. Changes in land-use, impact the water cycle and impact climate.
We have removed over 50% of the world’s wetlands in the last 100 years. Wetlands store water. Water has a high specific heat capacity. It is slow to heat up and cool down. I am grateful for that fact, every time I swim in the Atlantic Ocean off the west coast of Ireland, where the Gulf Stream from Mexico still has a few degrees of warmth left in it by the time it laps up on our rocky shores. Or at least that’s the story I like to tell myself as I brace myself for a plunge.
If you take away wetlands, you take away a heat sink. The land can heat up more rapidly. This in turn leads to more evaporation and water loss. A feedback loop that exacerbates water loss. The land becomes desiccated and dried out. This leads to subsidence, and it can lead to flash floods, as when the rain hits the land it can’t absorb the water.
If you have ever, in a pang of guilt, quickly tried to water that neglected and forlorn looking house plant in the corner, only to see the water run right though the flowerpot, you get the basic idea. The rain is hitting harder these days, the ground can’t take it, it can’t soak it up. It runs off the ground, as well as from our buildings and roads.
Plants and trees make their own rain. Bacteria on their leaves release proteins that when lofted into the atmosphere, create the precipitation points for water droplets to form and seed cloud formation. They create the ‘small water cycle’. This is different to the water cycle we learned about in school, where water evaporates from the ocean and falls upon the land. Up to 60% of rain that falls on land masses like China, is from the small water cycle. It’s a virtuous cycle.
Author *Paul Hawken sums it up succinctly and eloquently in his chapter entitled Rainmakers, in his latest book Regeneration: “Make Rain, Hydrate the Land, Cool the Planet”. What appeals to me about that idea, is that it represents what Professor Cees Buisman calls a “coherent idea”. It’s joined-up thinking, not taking an aspirin to relieve a headache without stepping back and thinking about what’s causing it.
It answers the bigger question, what type of world do we want to live in?. There are many pathways towards carbon neutrality. One way is to build machines that sequester carbon. Sure, that will do the trick but that’s all it does. It’s a one-trick pony.
Water as a battery
Water has three characteristics that play into its role in energy storage:
Most of the world’s water is salty – any concentration of ions constitutes a battery.
When you use energy to desalinate water, you generate a concentrated solution of salt. That’s the battery. You can release that energy again, through osmotic power or reverse electro-dialysis. Singapore is a leader in this area through a partnership with Suez WTS where there is the potential for partial recovery of energy from brine concentrates generated during desalination by playing games with entropy.
Water is heavy – a good medium to store potential energy
Seawater can be pumped up to a height, using surplus renewable power and the potential energy stored and used later to provide the pressure to drive a desalination plant by converting potential energy into mechanical energy.
Reducing hot water use saves energy
Saving water use and recycling water in the home, particularly from showers and washing machines, can conserve thermal energy, which is significant given that up to 60% of electricity use in a home goes into heating water. A 50L Home not only saves water, it saves energy and reduces GHG emissions.
Water can be produced, moved and stored when surplus energy is available, potentially in underground geological formations. The oil and gas sector has an incredible depth of expertise in terms of geology and rock formations. That can be brought to bear in terms of underground aquifer replenishment.
Heroes and villains of the energy transition
One thing that was clear at CERAWeek, was that the energy community feels that it has been unfairly villainized in the climate debate and caricatured as a ‘dark and gloomy industry’. There was an understandable frustration evident. While environmental advocates might paint oil and gas companies as the source of a problem, they would instead see themselves as incredibly innovative companies, with long histories and essential contributors to the global economy. There’s no doubt giving people access to affordable, reliable energy helps to lift people, nations and economies out of poverty and that includes water poverty.
They were repeated calls to work ‘with them’, and not just keep ‘beating up on them’. We live in a world of ‘othering’, forever being divided into two camps. If you can name it, you can split a population in two with it. And now the entire political axis of the world is at risk of splintering.
There was a very strong emphasis on energy transition at CERAWeek and any serious effort to decarbonise a global energy system has to be done in partnership with the oil and gas energy sector. They may not be the ones leading it or shouting most loudly for it but they have to be a part of it.
Smart Grid is a winner in all scenarios
A key element of the energy transition is the Smart Grid. If you were to follow game theory, the winners in all of this, will be the Smart Grid companies. They are necessary in every scenario. Microsoft and AWS were strongly present, partnering with companies such as Schneider and GE.
The Davos of Energy – insights on geopolitical shift
CERAWeek is well deserving of its moniker the “Davos for Energy”. It gathers global thought-leaders, political leaders and CEOs from the world of energy. John Kerry opened a keynote session on the first day with Dan Yergin. The last time I saw John Kerry was indeed at the actual Davos in January 2020. He has had a long career in public service and is a veteran campaigner for reducing carbon emissions. He has been at every climate change negotiation since Rio. No one can doubt his credentials or his sincerity.
Speaking to an audience at an energy conference in Houston, where I was briefed by my own moderator to not take it as a given that everyone accepts climate change, Kerry did an impressive job of not alienating his audience. His remarks were insightful and he got a really strong round of applause at the end of his session. Not onceu did he use the words ‘climate change’ instead talking about ‘what mother nature is telling us’.
A few points he made that stood out. One is that 20 countries account for 80% of the emissions. Kerry is focused on working with those 20 countries. Secondly, he spoke about the First Movers Coalition, which represents 35 companies, including tech giants such as Amazon and Salesforce, that are making commitments and pledges to action on climate. These are action-based initiatives from some of the world’s largest companies. That makes me optimistic – you know they can do this if they set their minds to it.
Pretty much every speaker throughout the event was asked about the conflict in the Ukraine. CERAWeek pivoted the agenda to allow for this to be discussed.
There were calls from number of speakers, including the Senator of Alaska, Dan Sullivan, to increase domestic oil and gas production, with energy security cited as the driver. Equally though, the case was made that this is an incentive to accelerate reduced dependence on fossil fuels.
There was broad consensus from all speakers that:
• This crisis won’t end quickly and will affect the world geopolitically and economically for years
• There are no positive scenarios that can be envisaged, only ones that are less bad
• The effects will be wide ranging and could accelerate and aid the economics of renewable energy, electric cars, the value of biogas and the recovery of precious metals.
Perhaps one of the most impactful lines was that “in one week, Russian oil and gas went from necessary, to unwanted”.
* Paul Hawken and Cees Busiman have been confirmed as BlueNote speakers at BlueTech Forum, taking place at Vancouver Convention Centre, Canada, on 7-8 June 2022. The theme is Radical Collaboration for Regeneration.