15th September 2020
SPEAKER: Ray Leonard: Anglo Eurasia LLC
Climate Change and Covid-19: Their Effect on Energy’s Future
Fossil fuels have led to a profound increase in world living standards but resulting emissions of CO2 and methane into the atmosphere are a primary factor in climate change. Atmospheric content of CO2 and methane have risen approximately 155% and 265% respectively since pre-industrial time and the increase through 2020 and the process of climate change continues to accelerate. If significant steps are not taken in the coming decade to halt the increase in greenhouse gas (GHG) emissions, a phase may be reached in the 2030-2050-time frame described as a “tipping point”, in which steady changes may be replaced by a large-scale change in the climate system.
The Covid-19 Pandemic originated in China, with the epicenter spreading to Europe, then North America and is now in Latin America and the Developing World with a resurgence in the United States. The key to controlling the outbreak is well-established, social distancing, masks, good hygiene, testing, and contact tracing. Countries that have adopted the correct policies are now able to minimize the effects, but a real recovery will only happen with the development of an effective vaccine. Multiple candidates have reached the stage of clinical trials and are expected to be available in 2021.
The impact of the Covid-19 pandemic of 2020 has resulted in a significant decrease in world economic activity, which in turn has led to a temporary decrease in greenhouse gas emissions, particularly CO2. This temporary decrease is not likely to materially affect the longer-term process of climate change that is taking place. The predicted overall 6% reduction in energy use in 2020 has not been uniform among different sources of energy. The “losers” in the new energy mix are coal, as the fuel of last resort and most harmful environmentally and oil, 60% of which is used for travel and transport which has significantly declined in use due to decreased economic activity. Use of renewables has increased in 2020 to date.
The lessons from the collapse of economic activity and uneven reduction in energy sources in 2020 gives rise to the potential for a “reset” in the coming years considering accelerating climate change and changed economic circumstances and patterns in energy use, some of which may be long lasting. However, taking all factors into account for the energy industry and the global economy, there are three potential paths as the world economy recovers:
• Business as Usual: Continuation of energy trends and GHG emissions prior to the Pandemic resulting in an annual increase of 1.5-2.0% concurrent with the economic recovery
• Transition to lower GHG fuels: Freeze GHG emissions at level coming out of pandemic by shift from coal to gas as transition fuel while continue to build up renewables to allow actual GHG reduction after 2040
• Green shift: Continue reduction of GHG emissions initiated during Pandemic by massive shift in energy use away from fossil fuels
The effect the different paths would have on the oil and gas industry and on climate change in the coming decades are profound and will be described.
Ray Leonard is currently President of Anglo Eurasia LLC, a consulting firm for the Energy and Power Industry and Senior Advisor with Linden Strategies. He has a Bachelor’s Degree (Honors) in Geoscience from the University of Arizona and M. A. in Geology from University of Texas-Austin. He held executive positions with Amoco, FIOC, the Russian Oil Major YUKOS, the Hungarian National Oil Company MOL, the Kuwait Energy Company and was Chief Executive Officer of Hyperdynamics, a NYSE-listed company exploring for oil and gas in West Africa. He has been active in publishing and presenting on world oil and gas reserves and climate change for many years, presenting at forums such as Council on Foreign Relations (1994/2014), the 26th World Gas Conference (2015) and the World Economic Forum at Davos (2019/20).
Results and analysis of the Exploring the Energy Transition SIG member’s survey will be discussed.