The Energy Transition is an Adaptive Challenge
“Energy transition is generally defined as a long-term structural change in energy systems. These have occurred in the past, and still occur worldwide.”
A little over a century ago Henry Ford was leading an energy transition. He saw the market opportunity in making automobiles affordable to ordinary Americans and changed the existing paradigms of investing, manufacture and in the end social status and mobility. In order to accomplish this change he caused others, like his investors, to change their pre-conceived perspectives, he radicalized industry with the assembly line, and he created a market through an affordable (and also profitable) product that improved people’s lives. In so doing he was instrumental in the development of the hydrocarbon economy and the new culture of mobility.
The same integral catalysts for change are profoundly required for the new energy transition a hundred years later. The energy business needs to transform to respond to the “dual challenge” of a growing demand for energy coupled with the need for that energy’s carbon footprint to be radically reduced.
As the proposed definition quoted above, the energy transition is often considered a structural change, with new energy technologies replacing old ones. However as just described for the revolution of the internal combustion engine, both culture and technology needs to undergo profound change, and reciprocally will lead to further societal adaptation and innovation. The conceptual basis for this assertion is Ken Wilber’s “Integral Model”, wonderfully called the “A theory of everything”, is depicted below.
From: http://www.evolvingleaders.com.au/integral-model/integral-model/
The integral model illuminates the reciprocal relationship of the objective and subjective in human interactions. The subjective, or the stuff the “below the water line”, are things that not visible or directly measurable and concern a person’s beliefs, values, pre-conceptions and so forth. Collectively a group, community, or company’s values are the culture or the “way things really are around here”. Objective things, “above the water line”, are observable and measurable, for the individual his/her behaviors, and collectively its rules, policies, processes, structures and so on. The model notices that there is a reciprocal relationship between the two sides. Individuals don’t sustainably change their behaviors and approach to work unless their beliefs and feelings are resonant with the processes. For groups, teams, organizations, companies, the purveying culture needs to underpin the objectives, processes and systems of the group in order for the organization to be successful. In reverse systems and behaviors can modify values and beliefs. Consider the role modeling influence of a person in authority, or a promotional and other incentive schemes in a business. The role of leadership working in an integral way is exemplified in the work by Ron Heifitz, who sees adaptive challenges as one that are not solvable by simple technical solutions, but instead require change of individual beliefs and groups’s culture as well as structural change and multiple technical solutions.
“One of the things I learned when I was negotiating was that until I changed myself, I could not change others.”
Although I am a career oil and gas professional, I am also a trained scientist and an experienced businessman, and the case for change in the energy industry is now clear and compelling to me. It hasn’t always been that way. While I have never been a denier of the science of climate change, in the past I chose not to pay much attention to the issue. I believed that my contribution to an oil and gas business was purposeful in supplying energy to the world. I was curious and supportive of my company being one of the first to acknowledge the risk of climate change caused by fossil fuels. But I don’t remember being particularly disappointed when the initial investments into renewables didn’t work out. And I suppose I was just too damned busy with work and life to consider otherwise. Now with a bit more time on my hands (and the good fortune to be able to use it), I’ve had the chance to examine the science, understand the risks, and further learn about the intricacies of other issues of sustainable development.
A commitment to the transformation of the energy business starts (but doesn’t end) with the risk of climate change. I’ve been trained to appreciate that risk is the product of probability and impact, and organizations need to have mindful approaches to risks, especially low probability but high impact risks that if ignored and not properly mitigated can threaten the existence of the company. In terms of energy, today’s society needs sustainable solutions that do not cause risk to the ability of future generations ability to provide energy for themselves.
With respect to likelihood of anthropogenic climate change, I am compelled by several aspects of the case for CO2-driven global heating (a good summary of the basis for the low-carbon energy transition by another petroleum geologist can be found in Ringrose (2017)). The role of CO2 as a radiant force in the atmosphere has been measured, modeled and understood for more than a century. Humans have increased the CO2 content by over 40% during the industrial age and this is having a measurable effect on radiant forcing, global climate, regional weather patterns and so on. As a geologist I understand that the earth has experienced global climate change in the past, but I also appreciate that the rate of change now is rapid in geologic terms. The tipping points associated with thawing tundras, melting ice caps, alteration of ocean temperature layering and currents, all are plausible threats of escalation to me. So for me there is a high probability that anthropogenic climate change is happening, and there are plausible sources of escalation of the emergency. Perhaps there is a remaining debate is about prediction of future change - how much, how quickly, how severe? However, the overall risk of anthropogenic climate change is just too large to be ignored by society, nations, communities and businesses. Far better to put mitigations in place now, and end up of the low side of projected impact, than wait and see and be too late to respond.
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This reasoning sets my personal stage for the next phase of my professional career in which I intend to focus my own energies on opportunities and activities within the energy transition. I am particularly interested in concepts and technologies which reciprocally require attitude and culture change to be initially adopted and yet cause wider adaptation of societal beliefs as the product reaches the tipping point. One example of such a technology are electric vehicles (EVs) in which I have had recent personal experience. Last March we traded in our two gasoline vehicles, a Range Rover Sport and a BMW 335i (don’t ask!), for a Tesla Model 3, the dual motor performance version. Until recently, I still carried the childhood perception that an EV is a golf cart with a limited range and snail-like performance. Now I am enraptured by this new driving experience, the running costs for which are a fraction of one of the gasoline vehicles alone. Also with a half cent per kWh subscription to our electrical cooperative, I can routinely charge the Tesla with zero-carbon electricity. I have to admit I enjoy the admiring comments and glances in town, and take pleasure in telling the other customer at the local car wash about the low running costs. It’s quite exciting to be an early adopter in a technology that looks destined to revolutionize the light duty vehicle scene, just like Henry Ford and his Model T did a century ago.
An Energy Transition Eclectic
As well as climate change risk mitigation, the energy transition depends on maintaining a supply of energy to the world that is affordable to all. The need to deliver innovative, lower carbon solutions that are economic will require changes in the way businesses function, how projects are financed, and how people are rewarded. This again is also about personal attitudes and group culture, involving a collective change and engagement of all stakeholders. Zero-carbon sources of energy are a minority in the energy mix for the United States and other countries around the world. It’s only pragmatic to expect oil and particularly natural gas to continue to be a part of the energy mix for decades to come. This exemplifies the duality of the energy transition - in the nearer term energy security for many developed countries will depend on fossil fuels. While some sections of our society are frustrated with the urgency of action on climate change, the process of transformation takes time and energy. Nevertheless, a century from now, people looking back at this energy transition will do so in wonder for its speed. For this reason I consider myself an “energy transition eclectic”. I am not picky about sources of energy nor technologies that provide that energy to users, particularly in this experimental phase where we are testing technologies both for efficiency and for fit with the existing infrastructure. I believe that oil and particularly natural gas will be necessarily around for a long time to come, and still will be used even after a net zero carbon economy is established. Hence while I believe some oil and gas reserves known today will never see the light of day, I also take the view that stoping oil & gas production now is both impractical and dangerous to the economy. Nevertheless, the oil & gas industry does indeed need to find a new purpose and transform many aspects of its business, in order to play a role in the energy transition. I stand ready to help.
A century ago the hydrocarbon age accelerated into human society through an energy transition with the advent of the internal combustion engine. Fast forward to a new energy transition, catalyzed by the risks of climate change and the need for secure, affordable energy for all. While the potential threats of climate change are alarming, the optimist in me sees exciting possibilities within the response that is required.
I look forward to playing my role.