The path to net-zero and the role of CCS and technology

I’ve just got back from the inside of a week in Calgary with colleagues and clients, principally learning more about a hugely ambitious and inspiring energy project called the @Pathways Alliance. By the way, what a warm and welcoming bunch the Canadians are and @AirCanada’s great! But before I share a little more about Pathways and why we’re so excited by it, let me start with three pieces of recent news that rather illustrate why we need it. So much.

Firstly, on Jan 10th the EU's Copernicus Climate Change Service (C3S) organisation said the planet is already 1.2°C warmer than pre-industrial averages. Then, two days later, the US National Oceanic and Atmospheric Administration issued stats for 2022 showing ‘average temperature across global surfaces was 1.55°C above the 20th-century average’ (remember the Paris Agreement and its 1.5°C aspiration). Finally, bp ’s 2023 Energy Outlook was published stating ‘Despite the marked increase in government ambitions, CO2 emissions have increased every year since the Paris COP in 2015 (bar 2020)’.

So what? Well, firstly, despite ever-increasing efforts and huge investment shifts in favour of low carbon energy systems, we’re not yet managing to cut emissions. Secondly, temperatures continue to increase, and this would continue to be the case for a period even if emissions were reducing as there are lags in the climate system. And finally, put well by one of bp ’s 2023 Energy Outlook ‘Core Belief’s’, oil (and of course gas and - thankfully to a far lesser degree - coal), will ‘continue to play a major role in the global energy system for the next 15-20 years’.

It's hard to reconcile those three factors against the aspirations of the Paris Agreement unless we radically accelerate and scale the contribution of Carbon Capture Utilisation and Storage (CCUS).

There are purists (and I genuinely respect their position) that object to CCUS and Carbon Capture and Storage (CCS) on the basis that it simply enables and locks us into continued emissions volumes. I’m a pragmatist and so do support the vital contribution to the immediate challenge represented by the world’s continued addiction to fossil fuels that CCS allows. Nonetheless, I hope the industry can adopt an authentic narrative that CCS is a transition technology that will enable a zero carbon rather than a net zero paradigm. Perhaps that’s a little philosophical, but hey.

Leaving aside the large volumes of carbon being captured and used symbiotically in industrial applications like fertiliser, and in new innovative pathways like building aggregates and synthetic fuels, today there are approximately 35 operational CCS facilities sequestering approximately 50 Mt of CO2 pa. A further 300 facilities are at various stages of development of which 200 will be operational by 2030 offering a further 220 Mt CO2 of annual capacity. But here’s the thing, the International Energy Agency’s (IEA) ‘Net Zero scenario’ requires 1250 Mt of annual CO2 capacity by 2050. We need to go bigger, faster.

However, it isn’t just purists that are wary of CCS and rightly so. The public needs it to be a cost-effective means of reducing atmospheric CO2. They want to ensure that noise and disruption are minimised, especially during the construction phase. They want it to create enduring jobs for the local economy and they want trust-based, inclusive, meaningful and ongoing engagement with local communities. But unsurprisingly, the research into public sentiment shows time and again that the overriding criterion of public support is safety; safety for communities, wildlife, habitats and the climate. We’ll come back to that in a bit because it’s one of many areas where technology partners can play a pivotal role.

So, to the Pathways Alliance and the remarkable work of its President Kendall Dilling and the leadership of the six partners, Canadian Natural, Cenovus Energy, ConocoPhillips, Imperial, MEG Energy and Suncor. Recognising that the oil and gas industry is one of Canada’s largest emitters, as Kendall says, their vision is to “produce the cleanest barrels of oil in the world and for Canada to become the global supplier of choice for responsibly produced oil to meet the forecasted ongoing demand for oil for decades to come”. CCS is only one (albeit the most important) of the various tools Pathways will use in this $24bn, three-phased and 30-year programme to reduce annual emissions by 22 Mt by 2050. For reference Canada's total 2020 GHG emissions were 672 Mt CO2 so today that contribution would equate to 3% of Canada’s total emissions. In one project! Oil sands production is an energy intensive process (hence the emissions) so Pathways will not rely on CCS alone but also invest in wholesale energy and process efficiency as well as exploring small modular reactors (SMR) for electrification and potentially direct air capture (DAC) technologies as well.

But it isn’t ‘only’ the sustainability vision and credentials which make this one to watch. The project is expected to create approximately 35k jobs and protect a further 25-35k existing roles. Again, for reference, projections here are that CCUS could enable the UK to create 50k jobs out to 2030.

I met with Kendall at the Northern Lights ‘Technology and Innovation’ conference held in Calgary on February 8th. We participated on a panel later that day and he cited “listening” as a critical characteristic of leadership in such a setting. Listening is definitely critical as is collaboration. Open, authentic and ongoing collaboration across the partnership, the value-chains of those partners, and with policy makers provincially in Alberta and federally across the rest of Canada with special focus on the communities affected and that will share in the socio-economic benefits of the project - particularly with first nation leaders. As Kendall has said, “we will continue to seek input from Indigenous leaders and communities who have a special, living relationship with the land, air and water”.

It's Cognizant ’s point of view that there are two other critical components in this collaboration; data and technology. Let’s leave aside the huge IT undertaking that will be necessary here to integrate the many systems of 6 partners, 20 facilities and a joint venture and just consider the technology required to achieve the sustainability outcomes Kendall and his partners are seeking and that their stakeholders will hold them accountable for.

First and foundationally, in our experience such a project will need to define its ESG reporting standards, protocols and framework and then develop and deploy an ecosystem-wide data strategy to ensure robust reporting from each element of the whole; the partners and their joint entity. This enables baselines to be established; targets to be set, monitored, verified and reported; and a portfolio of prioritised and integrated emissions reduction plans to be put in place. When coupled with advanced analytics and AI, such a data strategy can also enable the project to move beyond providing lagging indicators and enable future-fit operational and commercial decision making.

Secondly, by designing and deploying a network of IIoT sensors and edge computing, the entire infrastructure can be monitored for the risk of fugitive emissions. As we’ve done in other comparable settings, building a digital twin of the ecosystem enables us to develop the granular resolution needed to monitor operations and enable predictive and prescriptive maintenance and better decision making around productivity, resource and energy efficiency improvements.

Finally, using intelligent automation, we can streamline workloads and improve asset utilisation and reduce the environmental impact of such projects.

Pathways is a colossal undertaking with tremendous environmental and socio-economic potential for Alberta, Canada and the World. The world is watching as it seeks to learn about the possibilities of CCS to bend the climate curve. We wish Kendall and his colleagues the very best of luck and look forward to staying in touch and playing whatever modest role we can in this ambitious and inspiring project.

#cognizantconsulting Michael Valocchi David Cox Gautam Sardar Brian Gorman Rob Walker Arvind Pal Singh Harry Brekelmans Shaun Gregory De la Rey Venter Gareth Wright Markus Gärtner Mark Cutifani Francesco Starace Christian Levin Henrik Henriksson Alex Milward Orvil Smith Palma Petrilli Irene Sandler Euan Davis Melanie Christopher Jacob Shamis Jonathan Smith Winston Beck