Oil and gas companies are facing major technological disruption

over 80% of the world's energy needs are provided by coal oil and gas although technologies to extract fossil fuels may have changed over the decades the core products themselves have never been challenged until now a lot of people question whether large dinosaur of an oil and gas company can really compete in such a new high-tech environment pressure to reduce carbon emissions is putting the future of fossil fuels in jeopardy encouraging the growth of alternative methods to generate and distribute power we are not just dairy farmer here we are energy farmers as well every private person can produce his own energy in just eight years the value of the world's biggest power companies has halved leaving industry Giants scrambling to redefine their role in this new energy world when I started my career we were a monopoly it's always technology that truly disrupts Singh's across the world old industries are facing disruption on an unprecedented scale people are not making our taxes the pressure to adapt has never been greater it is always survival of the fittest that's capitalism because were there's threat there's also opportunity December 2015 the Paris climate conference for the first time ever 195 countries agreed to a legally binding climate deal to reduce carbon emissions I think everyone in the oil and gas industry agrees that it's going to be a different future this five trillion dollar industry may be facing a seismic shift but that doesn't mean it's ready to ditch the dirty fossil fuels that made it rich instead many companies are banking on new methods to clean up an old process Norwegian oil and gas giant Statoil struck it rich in the North Sea in the late 1960s over four decades later at its Lightner gas rig the company is attempting to make fossil fuel production cleaner we have an ambition to become the most carbon efficient oil and gas producer in the world the world will look for companies like ourselves that take a proactive stand on this and deliver oil and gas to the world but doing it in a sustainable manner stat oils business still relies on the harmful burning of fossil fuels by its customers but at least the company is trying to reduce its own carbon footprints it's transformed some of its offshore rigs with technology that enables engineers to separate the carbon dioxide and pump it underground Statoil slightly gas rig is the world's first offshore carbon capture storage plant a slave now we have a lot of co2 in our gas so we need to capture that strip it out of the gas stream before we can export the gas in here you will have continuous stream of captured co2 going down through this well into the subsurface about 1,000 meters below us and then we store this or two in the subsurface for ever and ever each year Statoil stores 1 million tons of co2 making extraction less carbon-intensive they believe that prioritizing gas over more harmful fossil fuels will further reduce global warming and keep them relevant for decades to come one of the advantages of the gas is that it's very abundant it's very reliable and it's very flexible you can turn the gas stream on and off so you can regulate your gas flow very very easily gas may be reliable but fossil fuels will always mean carbon emissions wind and solar are cleaner but depend on subsidies to take on the consistency of fossil fuels they face a huge challenge the unpredictable weather in Bavaria a tiny village has used those subsidies to take up the challenge this community believes it's found a way to produce a steady energy supply just from renewable sources raising the real prospects of a future free from fossil fuels we have not just Dairy Milk we have as well energy farming and here you can see a part of our solar panels we have several points where we catch the Sun and make energy Norbert and Christina Beck Telus family farm has been providing the local community with dairy products for over 200 years but they now have a new income from solar energy Invicta catalyst mid-level un3 photovoltaic and lager their strong din we often Dacian product Ian un7 Ebro convert indirect own for broad producing your own energy with solar panels isn't revolutionary but in this village they're combining solar with other renewables in an attempt to achieve the holy grail of a steady energy supply and they're prepared to use anything to do it the cows always produce my New York deputy mayor Gunther moogle a has helped drive the villages pioneering efforts to make renewable energy a realistic option we can prove that we always have more than 100 percent of energy even if there is no wind and no sound at all there's one renewable that never disappears as it can be sourced from the decay of virtually any organic matter it's called biogas of the for biogas plants in the village farmer ein Seidler runs the largest people on wicked coffee three blocks really happy to say I was some yeah you got some of the boxes are showing we're from Boston finita and so she's the news combining these different sources has been so successful the village now generates five times more energy than it needs but that's just part of the challenge of turning renewables into a credible energy supply it's not only about renewable energy generation it's also about power saving and energy saving in order to be able to use wind and solar power literally around the clock storage is absolutely key within this community one young company has developed a home battery system that enables the villages to store the excess solar energy they produce for later use we are the first to offer storage systems for the residential market in the world and obviously storage helps customers to use solar power regardless with the sun shining or not the technology behind this battery system also holds the key to a much bigger prize for the villages supplying energy to each other our battery systems are online and we can recognize in real-time who is currently feeding power into the grid and who still needs power from the grid and an amazing result is that you have both customers who have excess power and customers who need power from the grid and our general idea was let them share their power between each other and to get rid of stinky coal plants and nuclear power stations our customers can literally replace the traditional utility is 100% and go independent Norbert and Christina supply 50 neighboring households with the energy they generate for the outside is sister suna does he our Christine would a strong product yet but on snitched from gross in concern or light and fan confirming its own Martin mousse where this community has led many others have now followed there are now almost 1000 energy cooperatives around Germany it's a major challenge for the country's big four utilities in eight years the biggest Eon has seen its share price fall by over three quarters when I started my career we were a monopoly technology has tremendously changed renewables are getting cheaper and cheaper customer behaviour is changing tremendously and society with climate change and other issues has total different expectations to the industry so the industry was shaken up at its fundament and it's a total different industries from the 27 years ago when I started Ian's income from fossil fuels has fallen by more than a third since 2008 the company recently made a drastic decision to fully commit to the Renewable revolution Aeon has taken a very brave step we broke the company I would say into all the commodity business is the traditional fossil power plants all those businesses we spin off into a company called Unipro and we are remaining with renewables Eon plans to spin-off the majority share of its fossil fuel assets by the end of 2016 and scale up its investment in wind and solar but rather than focus on just generating renewable power Eon is sensing its real opportunity lies in managing this diverse new supply on an industrial scale this green society needs to be managed here you need to manage millions of feeding and consumption sites you will have sharing economies in between you will have under overconsumption at time this management equation big data mining technical competence is obviously something this world needs and Eon will strive for being a capable partner in that to secure its place in this new decentralized energy world this former monopoly is taking steps that would have been unthinkable just a decade ago we are open for any kind of partnerships with any partner with any customer and yes this is also a new attitude we don't need to control the world Theon's partnerships have produced a raft of renewable energy projects at the Arcona wind farm in the Baltic Sea their investment partner is a surprising newcomer to the alternative energy industry Norwegian oil and gas giant stat oil altogether is 1.2 billion euros and we're taking 50% of that we're talking real money here it's not just branding or greenwashing we expect tremendous growth with in particular and you know if you're a business person you want to take advantage of those growth opportunities and be part of it statoil like Eon is positioning itself to take advantage of the energy industries new horizons the company's next project draws on four decades of offshore experience to steal a march on far new arrivals always exciting it's the first floating full-scale windmill in the world the image is very windy it looks like it still but it's actually floating the world's biggest offshore operator has developed a floating turbine there can be mass-produced cheaper and quicker than existing static windmills I think it actually makes some sense that it was an oil and gas company that came up with this because we are reusing a lot of technology on the oil and gas sector we're using that phone technology it's ballasted it doesn't have any legs the special software allows the blades to move in certain direction which optimizes the wind production but it also makes the power stand still start oils first floating windfarm a sheduled to be delivered to a site off the east coast of Scotland by 2017 I think this is the future it's a future wind at least you can have them anywhere in the world anywhere in any kind of sea so this allows us to move further from shore get better wind and produce cheaper electricity other fossil fuel giants including Shell Exxon and total are also starting to hedge their bets with a range of investments in biofuel batteries solar and wind it might seem like a surprising move but by embracing these alternative technologies now forward-thinking oil and gas companies might just be able to withstand the disruption caused by the Renewable Revolution you

Channel: The Economist

Views: 953,502

Rating: 4.7424088 out of 5

Keywords: The Economist, Economist, Economist Films, Economist Videos, Politics, News, short-documentary, fossil fuels, biofuel, future of fossil fuels, future of oil and gas, oil and gas industry, oil and gas drilling, oil and gas documentary, renewable energy, solar energy, renewable energy documentary, solar power, technologies, economist, economist films, economist videos, the economist, energy, future fuel, biogas

Id: AJ38SiVOD78

Length: 14min 48sec (888 seconds)

Published: Tue Sep 20 2016

Reddit Comments

[u/TechnoL33T]

The world's attitude is getting better!

[u/Hermhermherm]

While the video is excellently produced, they didn't have much new or interesting information.