At the FII Investment Institute Conference in June last year, Reliance Industries Chairman Mukesh Ambani mooted an idea of using carbon dioxide (CO2) as a raw material rather than a liability. Prince Abdulaziz bin Salman al-Saud, Minister of Energy of Saudi Arabia, and Patrick Pauyanne, CEO of Total, were also present at the conference. "If we take a clean sheet of paper and adopt technologies whereby we can complete the energy cycle, we can adopt new technologies, particularly biochemical photosynthesis," he said. He then went on to speak about carbon recycling and completing the carbon cycle, which was disturbed by the industrial revolution. "There is a need to provide efficient, clean and affordable energy. And we have to do it in a responsible way. That's the business," he said.
Ambani is not the only one thinking on those lines. In fact, global oil giants, working across the value chain, are transforming the way they treat fossil fuel and do business. Just after taking over as British oil giant BP Plc's Chief Executive in February 2020, Bernard Looney announced that the company would dramatically shift the way it did business. He said BP Plc would spend more on clean energy and less on fossil fuels. He announced net-zero greenhouse gas emissions by 2050.
Looney's call for change was well received in the oil and gas industry. Within a few months, Total and Royal Dutch Shell announced plans to reach net-zero emissions by 2050, by increasing spending on low-carbon energy sources like wind, solar and biofuels. US giants ExxonMobil and Chevron also announced goals to cut emissions.
However, a major concern among activists and public in the developed world is that the vast majority of oil emissions come from fuel burned by planes and vehicles on roads. The net-zero pledges of most oil companies cover only direct emissions from producing, refining and processing oil and gas. Companies are yet to find practical solutions for the much-larger share of consumer-driven emissions known as Scope 3 emissions. Experts say technology, especially electric mobility, will bring a change in the emission intensity. At the company's first virtual annual shareholders' meet in July, Ambani declared his company's aim to turn net carbon zero by 2035, echoing views of his global peers fighting climate change. He said RIL is committed to embracing new technologies to convert carbon dioxide that it emits into useful products and chemicals.
RIL, India's largest company in terms of profitability, has made substantial progress on photosynthetic biological pathways to convert CO2 emissions at its Jamnagar refinery and petrochemical complex into high-value proteins, nutraceuticals, advanced materials and fuels. It is in the process of developing next-generation carbon capture and storage technologies, besides using greenhouse gases as a valuable feedstock. It is moving directly into convergence of biology, computing and automation. It wants to become one of the world's leading new energy and material companies by 2035.
Indian public sector oil companies have also taken baby steps towards lowering emissions. In July 2019, ONGC teamed up with IOC for enhanced oil recovery from the former's oil blocks by injecting carbon dioxide captured from IOC's Koyali refinery in Gujarat. The memorandum of understanding talks about establishing a framework in carbon dioxide-based enhanced oil recovery as a mode of carbon capture utilisation and storage (CCUS), which is known to be an effective method for enhanced oil recovery globally, and is playing an increasingly important role in achieving carbon neutrality.
IOC also plans to set up many hydrogen production units to manufacture cleaner gas. Last year, it experimented with doping compressed natural gas with hydrogen (H-CNG). H-CNG, which has 18 per cent hydrogen, is now fuelling about 50 buses in Delhi.
According to ONGC Chairman and Managing Director Shashi Shanker, the state-owned firm has cut carbon emission intensity (that is, tonnes of carbon dioxide emitted per barrel of oil produced) of its operations by over 12 per cent in the last five years. BPCL is looking to plant over 10 lakh trees across its premises, besides building renewable energy sources. It is using seed-bombing technique to plant trees in barren hinterlands to increase bio-diversity.
RIL recently sourced the world's first consignment of "carbon-neutral oil" from Permian basin in the US. The carbon dioxide equivalent associated with production, delivery and refining of the crude oil and the use of the resulting product has been offset through the retirement of carbon credits.
The fossil fuel industry is headed towards a green future it seems.