Fusing Tech Innovation & Energy Transition with Dr. Justice Derefaka, Technical Adviser, Gas to Nigeria's Minister of State for Petroleum Resources

Advances in technology have led to breakthrough improvements in varying industries over the past few decades. Today’s businesses use technology extensively to automate and re-engineer their processes – to improve scaling capacities and optimize their procedures.

Innovation is another name for technology, and in business, innovation is used to describe improved services, products, or rapidly changing service requirements. And because the world is undergoing an energy transition, innovation will be critical to overcoming the many challenges of this transition.

Unsurprisingly, there is no “silver bullet” technology or method to decarbonize energy; instead, a variety of technologies must be used, each of which may be implemented at a reasonable cost depending on the market, the preferences of the country, and?the existing infrastructure.

Of course, other elements to take into account include the system costs and value of various technologies, which will vary depending on local conditions in other nations. An evaluation of the system's costs and value, however, is outside the purview of this article.

Be that as it may, let us agree on one key component – that the transition to sustainable energy is dependent on innovation. Enhancing current procedures and coming up with fresh approaches to addressing the demands of many players, adds value to the economy.

Technology innovation increases the range of alternatives and possible strategies accessible in the context of accomplishing long-term policy goals, and it gradually lowers the costs of doing so. Technology innovation does not evolve in a vacuum: the structure of the market, public support for entrepreneurship, and direct government investment all influence how rapidly new technologies emerge and are adopted.

This is as true for energy as it is for other sectors of the economy. It is crucial to acknowledge the pressing demand for more energy with less of an environmental effect. Setting high goals to deal with these difficulties is also important. But now that that has been done, the next stage is to carry out these plans. Not as easy as it seems.

Innovation requires long hours of arduous effort in partnership with others - Dr Derefaka

This article believes that the most crucial aspect in ensuring that plans are carried out is creativity and/or innovation. Innovation, put simply, is the creation of an idea or a product that solves a problem in a fresh, improved manner. It is most likely most closely related to technology in energy circles. And we should not take innovation for granted.

If it is not promoted and ingrained in the new generations entering the workforce, it will not occur at the scale we require. Although history has romanticized the concept that creative ideas are the result of lone labor and isolated flashes of inspiration, or the “eureka” moment, the truth is very different. It typically requires long hours of arduous effort in partnership with others. To me, innovation is just that.

Since the beginning of the oil and gas industry, it has been a vital component at its core. On the flip side, it is unavoidable that people and economies will require more and more energy. According to the International Energy Agency (IEA), global energy demand is anticipated to increase by close to 40 percent by 2040. To meet this need, several sources of greener energy will be required. Fossil fuels currently account for a large part of global energy production. And, as I have said many times before, take it or leave it, oil and gas will be necessary for decades to come.

To transform innovative clean energy concepts into products that can be sold, or to move ideas from demonstration to commercial dissemination - a stage I refer to as the “valley of the shadow of death,” it is imperative to have a strong commercialization plan. Commercialization flourishes in environments backed by strong institutional structures and other governmental procedures in addition to a favorable investment climate.

Without an innovation strategy, efforts to improve innovation can easily devolve into a jumble of well-publicized best practices: The problem is that an oil and gas organization’s ability to innovate is determined by its innovation system - a set of interdependent processes and structures that governs how the company searches for new problems and solutions, synthesizes ideas into a business concept and product designs, and chooses which projects to fund.

Individual best practices necessitate compromises. Adopting a single technique typically necessitates a slew of other adjustments to the oil and gas organization’s innovation system. Without an innovation strategy, an oil and gas business will be unable to make trade-off judgments and select all the components of the innovation system

Ultimately, even if a clear business strategy exists, without an innovation strategy, different segments of an oil and gas organization might easily end up pursuing contradictory agendas. Diverse viewpoints are necessary for successful innovation. The strength of variety is blunted or, worse, self-defeating without a strategy to integrate and align different perspectives around common aims.

The process of designing an innovation strategy, like any effective plan, should begin with a clear understanding and articulation of specific objectives connected to assisting the energy organization in achieving sustainable competitive advantage.

This necessitates moving beyond all-too-common platitudes like “We must innovate to expand,” “We must innovate to create value,” and “We must innovate to remain ahead of the competition.” That for me is not a strategy. They give no indication of the types of innovation that might matter (or won’t)

Natural gas will play an important part in addressing our future energy needs, and it may be exploited in a complementary manner to oil, benefiting both resource owners and energy users. The potential for a sustained large rise in gas demand is obvious and liquefied natural gas (LNG) will be a crucial driver in meeting that need.

The creation of a larger, more dynamic, and more complicated gas market will be fuelled by the increase of LNG, as well as the emergence of gas to liquids. There are significant hurdles ahead in that market, not least in terms of supplying the new infrastructure and the vast expenditure required to carry gas across greater distances.

Meeting those problems will necessitate action on the part of all parties concerned. The energy industry, on the other hand, has a track record of effectively overcoming such obstacles, and there is every reason to believe that the potential of gas will be realized by leveraging innovative and disruptive technologies.?

The world will need to invest heavily in energy production, both in traditional sources and in renewables. The broader perspective, of course, is a world looking for affordable and reliable energy to drive both economic growth and improved living standards. The global middle class is expected to double to nearly 5 billion, which means twice as many people will need commercial fuels for heating, cooling, mobility, and manufacturing.

The benefits of natural gas are well documented. It is flexible. Its supply is abundant and diverse. Its range of uses is still expanding. And it makes economic sense. Natural gas is a cleaner-burning fossil fuel, economic to produce, scalable, and complementary to intermittent renewables. Natural gas is one of the few energy sources that can meet many energy needs: to generate electricity, heat homes, supply the power industry, and fuel ships and trucks.

According to the International Energy Agency, there are enough recoverable natural gas resources to last more than 200 years at current levels of consumption. Despite the critical role of renewables, they cannot provide all the world’s energy needs. Renewables chiefly power electricity, which only meets around 20% - 25% of global energy demand.

There is no single or simple solution to turn emissions around. Multiple approaches and technologies – including much greater efficiency are required across all parts of the energy system, alongside a clear-eyed appreciation of where emissions occur and what the abatement options are in each area. Plus, innovation and technological advancements have a significant impact on industry and society, as history and time have demonstrated.

That is why, now that we understand the importance of the environment and see it as an asset that must be protected, we have a greater responsibility than ever to employ technology whose primary goal is to conserve the environment and the planet. If the world wants to meet expanding energy demand for human development while avoiding catastrophic climate change, it must transition to a cleaner energy system.

Many causes, including economic growth, customer choice, emerging creative technology, and national legislation, are driving this transformation. Collaboration across industries is critical to achieving net-zero emissions.

The industry must work with governments to highlight the benefits of gas in delivering a sustainable energy future, as well as to encourage the implementation of regulations and policies that will give gas a level playing field on which to compete and claim its rightful place as the world’s leading energy source.