“In the West, many people are of the impression that a radical shift from oil and gas (red meat) to a rapid and complete phase-out of hydrocarbons (vegan) is the way to go, often without differentiating between oil and natural gas at all. But, I think we are now waking up to the realization that it is not so easy and that natural gas is the transition energy source – the chicken – that could help bridge the gap in hydrocarbon energy supply and the demand for net zero emissions”, says Edward Wiarda, the current president of the European Association of Geoscientists and Engineers (EAGE).
This sets the scene of how Edward and his colleagues at the EAGE have been working on making the EAGE organization ready for the future. And now, as his year at the helm of the organization is drawing to a close, it is a good moment to reflect.
“The big change we have made is the shift from two relatively siloed divisions to a network of three circles – Oil & Gas, Sustainable Energy and Near-Surface Geoscience. And these circles are overlapping when we draw them in a diagram. As such, it embraces the simple fact that many people don’t only work in one sector and that there are so many synergies and overlaps in terms of subsurface knowledge and workflows”, Edward explains.
The problem is not the subsurface, it is what is (not) happening at surface
“Traditionally, we have been very good at allowing geoscientists to engage with other geoscientists at the events we organize and through our journals”, says Edward. “However, with the energy transition in mind and the much slimmer financial margins these sustainable energy technologies generate, it is key to see geoscience and all the above-ground factors in one integral system”, he says. “Don’t get me wrong, the EAGE’s core focus and weight shall remain firmly placed our member’s needs, being the technical and subsurface aspects of the Energy Transition. However, if we want to remain relevant, we need to widen our scope.”
“From what I see and hear, there is a significant gap between sustainable energy technologies the global investor community is keen to invest in, and technologies currently focused on by EAGE members, for example geothermal and CCS, and subsurface energy storage. The only way to bridge this gap is to bring people from multiple sectors into one room to discuss these strategic, policy and investor perspectives.”
But then the challenge is to fill the room with people from an equally wide variety of backgrounds. “So far, we have not been effective enough in this goal”, admits Edward. “And why? Because we are not very good at targeting, inviting or attracting the ‘pivotal audience’, and effectively explaining that we need to accelerate the energy transition in clear non-technical terms. To do this better, the EAGE has started building relationships with non-technical stakeholder groups, in addition to offering a geoscience communication course in collaboration with Iain Stewart to improve our non-technical communication to the world outside geosciences.”
“It hopefully leads to a better turnout for our strategic sessions too. At the end of the day, the value of our events lies not only in the diversity of our panel members, it mainly lies at the value participants feel they get from these events! Only that is really behind our license to operate.”
We can have a great panel lined up for a discussion, fantastic keynote speakers, and a strong strategic program, if there is no pivotable audience representing the non-technical stakeholders in the room to listen there is no point to organize these programs!
The seismic service sector
We get to talk about the seismic service sector. It is an industry that is close to Edward’s heart because he started his career as a processing geophysicist at WesternGeco. He currently works for EBN, the Dutch energy company that participates in many North Sea gas developments on behalf of the state, as well as being active in the geothermal, CCS and subsurface energy storage realms.
“From my perspective”, says Edward, “the trend of a contracting seismic acquisition and imaging industry has not been a good starting point for the energy transition. Why? Because with fewer players in the field, prices are likely to go up, availability of vessels and imaging teams down, and innovation in seismic acquisition and imaging solutions to decline as R&D departments are downsized. And especially for the capital-intensive CCS, geothermal and hydrogen sectors, where margins are low and access to funds is not trivial, that is bad news.”
But what drove the recent trend of a contraction in the seismic industry? At first hand, it seems straightforward to blame the oil price downturns for that, but Edward has another perspective.
“In my view, another important contributor to the decline in companies offering high-end seismic acquisition and processing solutions is how oil and gas operators have, contractually, slowly put more and more risks associated with the acquisition of surveys with the seismic service companies. That has caused some big projects to lose money because unexpected events frequently happen during acquisition”, he says. “Moreover, oil and gas E&P operators appeared reluctant to pay a prime for high-end acquisition and imaging technologies that some innovation-driven seismic service companies brought to market, leading to low returns to their R&D investments.”
“Of course, it is how a free market works, but I do feel that some introspection is required especially when the big oil and gas players are now complaining about the loss of diversity in the seismic acquisition space. And now it is the new players in the energy transition arena that are at the risk of paying the price for this, literally. A price they typically cannot pay due to aforementioned low margins and immature business models”.
I would have preferred a situation where we enter the energy transition with the seismic service landscape as we saw ten years ago
Back to gas
“Coming back to the strategic sessions we tend to organize these days”, Edward continues, “I am very pleased to see that energy poverty features as a theme during the EAGE Annual in Oslo this year. It reflects our desire to be a platform for discussing the broader range of issues and solutions needed to overcome this very much socio-economic issue and how geosciences can help with that.”
“In that regard, the situation I find myself in when at work is a very interesting one. On one hand, there is the desire by a very vocal set of groups to move away from gas and become energy ‘vegan’ straight away, but the reality is that gas will be needed for quite a few years to come – if only to help keep energy prices at affordable levels and to provide the energy to drive the energy transition.”
At the same time, the appetite for exploration is not what it used to be in the North Sea. It is getting increasingly busy as (future) wind farms, CCS, and subsurface hydrogen store developments are staking their claims through licensing rounds. “But, even though much of the easy and highly profitable and economically viable gas prospects have long been drilled, I think that some strategic decisions need to be made sooner than later to ensure that we tap into what is remaining before the infrastructure is gone and the gas exploration and production window is being closed by a combination of public opinion, policy makers and investors moving away from the hydrocarbon sector.”
“At the EAGE, there will always be a home for geoscientists and engineers of all three circles, including the Oil & Gas Circle”, concludes Edward. “On the road of the Energy Transition, we should keep our foot on the gas for as long as needed rather than steer on a collision course with gas exploration and production. We need to accelerate through knowledge sharing, innovation in subsurface technologies and through removing above-surface obstacles by advising and engaging with the wider non-technical public domains. If the cross-discipline networking at our events help achieve this, even better!”
