Andrew Turner, Associate Director in Madano’s Energy practice, shares his thoughts ahead of COP26. With the Conference finally here, hoards descending upon Glasgow, Greta Thunberg being greeted like a celebrity and the start of the dialogue, it is now time to see what ‘meaningful and effective’ (unsure what this is in Italian/G20 thinking) discussions and commitments (if any) will come from the largest international gathering since before the COVID-19 pandemic.
Staying relevant in the energy transition
However, one question keeps bugging me. In our race to Net Zero and the climate change commitments, can we really turn our backs on the past? Ben van Beurden’s comments were stark last week commenting that Shell ‘would not have been welcome’ in Glasgow. Whether we like it or not, Shell is one of the key influencers in the UK’s and global energy sector. Would you want your football team to play their cup final without their one of the most influential players?
We have seen the Global Investment Summit bring together exciting technologies, such as fusion, fuel cell and sustainable aviation innovators (all projects we support at Madano) seeking capital to progress along their development pathways. But with natural gas still making up a significant percentage of our energy system, and likely to do so for decades to come, we still need to look at the role oil and gas majors can play in low carbon transition.
Shell have focused on CCS; BP are a leading presence in the East Coast decarbonisation cluster and are setting 2050 net zero targets and Total have rebranded to the technicolour-dream-coat of TotalEnergies in a bid to communicate their commitment to change. We should not be afraid to acknowledge that the Net Zero, or our orderly transition as it is sometimes known, will be A) expensive B) hard work C) involve oil and gas and coal too, especially in the developing world. We can’t simply reinvent out way to a low carbon transition.
Accepting that we can’t forget the past
When we talk about ‘difficult choices’ we see the COP26 President Alok Sharma finding it ‘difficult’ to commit either way on Andrew Marr. We know that there will be changes to our lifestyles – whether that be subtle comments about eating less meat, or increases in taxes for long-haul flights. Things are changing.
The deeper communications issue for me, is the reality that every day we use oil and gas. Whether we like it or not, oil and gas underpins all our activity. We can’t drive our cars, drink a bottle of water or work on our laptops without it. Hydrocarbons play a key role in our society, however, this is not communicated clearly enough by organisations, individuals, and governments. Sure, there can be eye catching headlines from the PM about plastic recycling not working. Focusing exclusively on wind farms, battery plants and fusion distracts from key issues, such as where the oil and gas is going to come from to sustain our lifestyles and how we can ensure this is as low carbon as possible.
The central challenge is how we transition away from these sources of energy, as quickly as possible, but recognising some industries cannot simply be electrified at the flip of a switch. Project narratives and communications plans need to acknowledge the energy mix, today, tomorrow and in the decades to 2050. Stakeholders, whether that be investors, communities or the media are demanding more and more information to make their own decisions about how investments today will impact balance sheets and dividends in our Net Zero society.
What to expect from Glasgow?
We have already seen strong language from the PM around the clock ticking to midnight, Prince Charles coming to the table and Glasgow being the ‘best, last hope’ to hit our 1.5-degree ambition. The UK ranks 5th in the league table for cumulative carbon emissions and this means we have a sizeable role to play in supporting global decarbonisation. One of the core pillars of this COP is to increase financial support for the developing world to deliver $100bn climate financing a year alongside greater collaboration.
Looking closer to home, big issues like Cambo or continuation of hydrocarbon production will not be resolved this week, but with organisations calling for quicker and more transformational change to Net Zero we must recognise that our lifestyles can’t be left behind.
Madano Energy practice advises clients in the energy transition, infrastructure, and development sectors to shape their narrative, engage with Government and stakeholders and to communicate their objectives in creative and impactful ways. If you would like to speak to the author, Andrew Turner, or a member of the team, please contact us: [email protected].