HOUSTON – Even as debate about the ‘energy transition’ ramps up, world demand for both new and traditional energy supplies continues to grow. And as the mix of energy sources evolves, independent oil and gas companies will have a crucial role to play in meeting that energy demand while working to preserve the environment.
These were among the key points offered by Talos Energy CEO Tim Duncan at a panel on “Sustainable Offshore: Markets, Community, Stakeholders and Technology” at the Offshore Technology Conference on Wednesday.
Duncan noted that energy consumption rises with the standard of living. For that reason, modern economies must have access to affordable energy, but emerging nations want access as well. “Economic activity and energy affordability are directly linked and must be carefully balanced,” he commented.
It is for these reasons, Duncan said, that “we need responsible oil and gas development, and we need to lower emissions” to create a sustainable offshore economy. He noted that household energy costs have declined in recent years, unlike many other important personal budget categories; and this energy price deflation has helped to improve living standards. At the same time, he pointed out that “energy inflation is starting to happen, and it’s something we need to keep our eyes on.”
“We want responsible production, and in the Gulf of Mexico, production has the lowest emissions per barrel than most of other producing regions,” Duncan said.
Subsea tiebacks, which connect subsea wells to existing host platforms, are a key low-emissions strategy, Duncan pointed out. Talos recently completed a subsea tieback to its Bulleit field, and he pointed out that the strategy has been a primary field development option for the Gulf of Mexico in recent years.
But aside from field development strategies, an independent such as Talos can do more, Duncan said. “An independent has a role to play in lowering emissions,” he commented. “It’s not just the responsibility of the major energy companies. And so we think there is a role for us to play in carbon capture.”
Duncan pointed out that the Gulf Coast is a leading source of greenhouse gas emissions due to its industrial base. The shallow-water Gulf of Mexico has storage opportunities due to its geology and existing infrastructure. These facts led Talos to think about “how do we marry these onshore emissions sources with these seabed geologies?” It was in this vein that the company began to “think about the dry holes of the past,” and how they could be used to improve the environment through carbon capture and storage.
It was this analysis that led to Talos Energy’s joint venture with Storegga Geotechnologies, announced in June. The two companies agreed to jointly assess and develop carbon capture and storage project opportunities on the US Gulf Coast and in the Gulf of Mexico.
Both Texas and Louisiana are looking at subsea storage possibilities in state waters, Duncan noted. For its part, Talos is looking for “wide open spaces” in shallow waters, or inland waters or marshy areas where 40,000 to 50,000 acres can be set aside. “There’s no reason for us to leave this to the majors,” Duncan said. “We have the experience and the assets in shallow water.”
“Building out a responsible oil and gas business and pairing that with a low-carbon initiative is the right way for an oil and gas company to think about its future, particularly offshore and along the Gulf Coast,” Duncan said. “If you do nothing, the market will pass you by.”
“Everybody wants to improve their living standards, and for that they need cheap, affordable energy,” Duncan said. These social and economic needs do not have to be in conflict with the environment and the energy transition, he noted. “It’s how to balance these needs that will be the key issue going forward. We look forward to the conversation.”