EMC Working Papers

Decarbonising Steam: A Strategic Imperative for the Oil Refining Sector

Steam is the lifeblood of petroleum refineries, powering turbines, heating, and driving critical processes—yet generating it consumes up to 30% of a refinery's energy and accounts for roughly a third of its greenhouse gas emissions. Conventional steam production, reliant on fossil-fuelled boilers, is challenging to decarbonise without significant capital expenditures, and rarely yields meaningful emission reductions. With such a sizable environmental footprint, the pressing challenge is clear: how can refineries sustainably produce steam at scale? This article explores a compelling answer—concentrated solar thermal (CST)—and evaluates its potential to transform Colombia’s refinery sector, making efficiency and sustainability not just aspirational goals, but achievable realities.

1. Introduction

The European Union (EU) is navigating a transformative period in its energy landscape, driven by the urgent necessity to tackle climate change and ensure sustainable energy security. As the world increasingly recognizes the dangers of climate disruption, the EU has positioned itself at the forefront of global efforts to reduce carbon emissions and foster a clean energy transition. In line with the ambitious European Green Deal, which aims to make Europe the first climate-neutral continent by 2050, the EU has set a bold target: achieving at least 42.5% renewable energy consumption by 2030, with aspirations to reach 45% [1]. Here's a concise summary of the current and upcoming trends in renewable energy demand and requirements across Europe. One of the upcoming requirements for Europe is the need to address seasonal variations in renewable energy production. Renewable sources, such as wind and solar, are inherently intermittent, leading to fluctuations in energy supply. This intermittency poses challenges to grid stability and energy security, especially during periods of low wind or solar generation. Converting offshore wind energy into hydrogen for storage can provide a flexible and reliable solution for energy supply, especially during periods when wind production is low or when demand peaks. Conveying current trends of renewable energy demand and upcoming trend requirements using Europe’s electricity base load with modular nuclear power plants, an Ultra High Voltage Transmission Line is used to transfer renewable energy long distances. Converting offshore wind production may concentrate on hydrogen storage in seas for upcoming seasonal issues caused by renewable energy, and finally Vertical Integration, Customer-centric, acquiring the energy from suppliers through Power Purchasing Agreements (PPAs).

The Intersection of Neurochemistry and Environmental Cognition in Climate Change

Let me introduce you to the concept of relativity, particularly relative status. Why can we not stop consuming? A first hint is the very nature of human survival and social structures. Within these social structures, hierarchy and hence status is particularly important. However, we have not evolved to have an absolute criterion for reaching a certain status, as it wouldn’t be viable on largely different scales. That is why we rely on relative status. As you may already know, our brain relies on neurotransmitters to carry electrical signals from one neuron to the next.

Are We Creating a Compromise?

Every year in the United Kingdom and Australia, thousands of incidents involving devastating fires linked to batteries in waste management facilities or vehicles are reported. Paradoxically, these are facilities meant to contain such hazardous activities. Furthermore, headlines such as “Batteries Starting Fires at Yellowknife’s Landfill, City Says,” posted by Cabin Radio, report unreported hazardous incidents potentially linked to batteries, and are becoming more common around the globe. These reports and news are increasingly alarming because they come at the cost of life, property damage, and monetary losses, and given the fact that we heavily rely on batteries for the energy transition, they could lead to safety and environmental compromises if not treated properly.

Driving the Paris Agreement

Article 6 of the Paris Agreement includes provisions allowing countries to cooperate to achieve National Determined Contributions (NDCs), specifically through carbon pricing, to meet mitigation commitments. Carbon markets are an emerging tool that incentivises businesses to pollute less and invest in clean technologies by putting a price on carbon emissions. As this article explores further, compliance and voluntary carbon markets are poised to reshape the energy landscape and contribute to achieving the ambitious goals of the Paris Agreement.

Compliance Carbon Markets

Compliance carbon markets are a key tool in the fight against climate change, and they aim to establish a carbon price by laws or regulations which control the supply of allowances distributed by national, regional and global regimes through the following compliance mechanisms: (1) Cap and Trade: Sets a pollution limit (the cap) and lets companies buy or sell allowances to meet their obligations, creating a market for carbon credits with a price driven by supply and demand; (2) Carbon Tax: A fixed price is set per ton of carbon emitted. Companies must pay tax for their emissions, incentivising them to reduce pollution.

The fundamental idea of this technical paper is to understand the feasibility and present the robustness of removing the need to decommission an offshore jacket and instead installing an offshore wind tower (with nacelle, rotor blades and generator) on top of it, thereby saving the costs of decommissioning as well as entirely removing the need to design, build and install a substructure for the new offshore wind tower. The economics of scalability are particularly interesting.

The world is currently experiencing one of the worst energy crises in history. Countries all over the world are beginning to adopt greener strategies by funding and covering their energy needs with green and renewable energy sources. Each of these countries has its own rate of development, but they all share a common goal of achieving carbon neutrality by 2050. In comparison, the European Union appears to have a faster development rate and a different goal, particularly regarding neutrality, of covering all its member states' energy needs with shareable green energy.

The United Kingdom is in the right place to become a global leader in the industrial Carbon Capture, Utilisation and Storage (CCUS) sector. Specific, UK associated industrial development has set a great potential for Industrial Carbon Capture (ICC) application. In fact, the operation of Oil and Gas (O&G) offshore fields has allowed for decades of data on suitable carbon storage sites to be collected, determining that the North Sea’s saline aquifers and depleted reservoirs have a 78,000 MtCO₂ capacity. Figure 1 exhibits the distribution of both CO₂ emission sources from industrial clusters and offshore storage points.

On Thursday 24 November 2022, Renault signed a contract with Voltalia to supply 350 MW of renewable energy over 15 years from 2027, which should account for half the company’s electricity consumption. This type of contract, also known as a corporate Power Purchase Agreement (cPPAs), is an unprecedented commitment in France in terms of power. On the same day, Engie announced a contract to purchase 100MW with Google in the United Kingdom for 12 years from the Moray West offshore wind project off Scotland. Whilst solar and wind remain dominant, contracts are now emerging for biogas, geothermal, and even hydrogen

Funding for the energy industry has historically been dominated by major private or state-controlled institutions. Conventional energies such as fossil fuels require capital outlays of millions and sometimes billions of euros, and hence, understandably, citizens or cooperatives have never fully financed a nuclear powerplant or an offshore oil rig. As the urgency of tackling climate change increases, the energy sector is being reconfigured by financing alternatives made possible by renewable energy technologies that are adaptable to local and community investment. Society is simultaneously becoming increasingly electrified, with global electricity consumption forecast to double from 2021 levels, reaching 50,000 TWh by 2050. Rapid growth in the renewables sector will be crucial for meeting this steady increase in demand.

With Putin’s “special military operation” into Ukraine on February 24^th 2022 it became clear to many observers within a week that this was a war. It represented a step change from the various territorial incursions over the past few decades which had gone under the term “New Cold War”. “The New Cold War” was the title of a book (one of several) first published in 2008 sub-titled: “How the Kremlin Menaces both Russia and the West” authored by Edward Lucas. Lucas was the Central and East European correspondent of The Economist for more than 25 years. 

A closer look at ESG investing

Halfway between traditional philanthropy and return-driven financial investment, ESG investing – i.e. directing capital to companies which yield environmental, social and governance benefits in addition to profits – enables investors to “do well by doing good”. Lying within the broad range of responsible investments, ESG can be virtually any asset class or investment vehicle.

In 2015, under Article 6 of the Paris Agreement, two new international carbon markets were decided on. During COP26 in Glasgow, technicalities and guidelines for these new markets were finalised, which allows for the full implementation of the Paris Agreement.

Voluntary cooperation to achieve climate goals

Under Article 6.2 of the Paris Agreement, the first carbon market allows countries to voluntarily trade greenhouse gas (GHG) reductions or sequestration amongst each other. A country that has overachieved its climate pledges can sell the extra emission reductions to another country, which can use them to reach its own climate targets.

Under Article 6.4, the second mechanism creates a carbon market where emission reductions from either states or private entities can be traded, and which will be governed by a UN body.

Generally, trading GHG reductions can help countries and private entities to efficiently meet their emission reduction targets, which for countries are known as nationally determined contributions (NDCs).

In order to reach net zero emissions, do we alter the electricity infrastructure to increase electric vehicle market penetration or promote the adoption of electric vehicles?

The Paris Agreement at COP21 highlighted that, despite the reductions in carbon emissions recorded in other sectors, in the transport sector they have steadily increased, trending toward a 50% increase by 2030. Globally, the transport sector is still heavily dependent on fossil fuels, accounting for around 17% of the world’s emissions. Thus, the topic of electric vehicles (EVs) has been the focal point of discussions in decarbonising the sector. However, there have been many critiques of the plausibility of transitioning to EVs and whether we should, (1) change the electricity generation grid, or (2) facilitate the transition to EVs by dismissing the emissions of the unchanged electricity generation mix. Will the transition be of environmental benefit? And what comes first: introducing large-scale EV adoption to facilitate decarbonisation through fiscal policies, or changing the infrastructure to stimulate the adoption of electric vehicles?

Within the debate around climate change, renewable energy sources (RES) hold an important place, some of which are perhaps more widely known than others. Next to solar and wind, biomethane is less well known and often even classified in “other renewable power”. However, it has a bright future as solar and wind showed their limitations in Autumn 2021, being partially responsible for the increase of gas prices in Europe.

More than ever, our growing dependence on intermittent energy sources makes it crucial to diversify the energy mix. It should be noted that, even though Europe is moving towards a system that heavily relies on electricity as an energy carrier, many industries such as iron or cement making are not yet ready to be powered by electricity, and hence rely heavily on fossil fuels.

Unlike other RES, biomethane shares almost all its characteristics with natural gas, making it interchangeable and suitable for industry applications, whilst using the existing gas transmission network.

As part of the quest to diversify its energy mix and increase its energy independence, the European Union is encouraging the development of methanation. Germany was the first country to get on board, and France is now joining its neighbour on this path. However, the urgent need for decarbonisation framed by the Paris Agreement seems to push all stakeholders into acting too quickly, leaving space for abusive practices and for things to get out of hand, to the detriment of sustainable agriculture practices.

The potential for blockchain technology to profoundly disrupt the world as we know it is enormous. The financial system is often seen as the most vulnerable industry primed for disruption. This technology has the potential to disrupt a variety of industries, including aerospace and defence, supply chain and logistics, and energy management, most notably decentralised micro-grid systems.

Background

• Examine the common misconceptions about the environmental impact of Blockchain mining
• Analyse the options for transitioning blockchain mining away from fossil fuels and towards variable renewable energy sources (vRES)

• Croatia should commission a Small Modular Reactor (SMR) as a pioneer of new types of nuclear power station

This short policy report considers the opportunities available to the Croatian government for the utilisation of new nuclear technology for domestically produced energy.

As other European countries struggle to balance their desire for a reliable energy supply with their contribution to climate change, recent advances in nuclear technologies present a solution.

In the first quarter of 2020, the oil market was as turbulent as a hurricane hurting the US Gulf Coast. The dramatic collapse of oil demand pushed oil prices to new territories. The situation sets a gloomy future for weaker oil producers in the upstream sector. This led to a fragile coalition between crude oil producing countries.

Read more ...

A pressing issue for policy makers

Availability and affordability of energy have become pressing issues. Particularly in the poorest areas on the planet where energy infrastructures is still insufficiently developed, but in more mature countries as well, where the less favoured have too often no choice but to accept poor housing conditions characterised by low energy efficiency and hence expensive energy bills. Today, access to affordable energy is considered to be a basic human right and as such a key goal for policy makers. In this context the concept of “fuel poverty” has emerged. Robinson et al. (2018)1 define fuel poverty as « an inability to attain the socially and materially necessitated domestic energy services that ensure the wellbeing of a household, allowing them to participate meaningfully in society ». This view is aligned with the general definition of poverty and social exclusion2. Of course, a large number of academic studies, surveys and reports addressing this specific theme have been produced. Their aim is first to reveal the growing importance of this problem and its related potential severe consequences, then to identify the mechanisms involved in the rise of this form of poverty and to imagine indicators to identify the population at risk. The ultimate goal is of course to propose guidance for corrective actions.

A relevant approach? 

Download the paper to read more ...

The shale gas revolution has made the United States, Canada’s only customer of its natural gas exports, the number one competitor of Canada. Therefore, finding an alternative natural gas customer overseas is crucial for the Canadian economy. However, the country is unable to do so due to an absence of LNG export terminals in the short term. At the same time, a window for new market entrants has opened in China from recent deregulation of its natural gas import barriers and an increase in demand.

This paper proposes to export Canadian natural gas to China through the U.S. in the short run in order to secure long-term contracts.

Could the crisis in Ukraine threaten the security of Europe’s energy supply?

The European Union imports significant quantities of oil and gas from Russia. The EU also imports oil and gas from the Central Asian republics, in particular Kazakhstan (oil) and Turkmenistan (gas), which also come via Russ

When fuels as versatile as petroleum products are in transports, it is not surprising that several alternative fuels are needed to substitute for different vehicle types and usages. Petroleum products' qualities are their unsurpassed energy and volume density and their ease of handling. 

At a time when, in the West, people drive fewer miles and the number of gasoline and diesel retail stations is on the decrease, Compressed Natural Gas (CNG) is bucking the trend. The original justification for using CNG in transports despite its greater bulk is its low cost, on an energy basis. Oil 

Energy efficiency is high on the agenda of policy makers because it contributes to the achievements of the three main objectives of energy policy: security, affordability and sustainability. In this paper the focus is placed on efficiency gains arising from the adoption of smart energy technologies by domestic and small corporate users, including smart metering and "beyond the meter" management systems, home area networks and devices. Though the expected benefits are important a lot remains to be done. Condition for smart energy systems to be adopted and barriers to their adoption are discussed. Considering the dominant suspicious attitude toward utilities it appears that a trustworthy independent business entity, building a proper relation between users and technology providers, is needed to assure the deployment of smart energy technologies across the population concerned. 

This paper details a methodology to manage the long term Reputation of an International Oil Company with respect to key Stakeholders. Reputation is defined with three major components: responsibility (respect HSE rules, national laws, local content target, social responsibility), reliability (deliver project on time, schedule and quality) and trustability (be honest and transparent with stakeholders).

Growth has been the driving force for most countries and organizations. Global economy has grown over the last thirty years. Although the growth rate varied, but overall the global economy has got a rate of over 2 % as measured by GNP. During the last ten years we are seeing a new phenomenon; the emerging markets have grown at a much faster rate. The balance of global economy has radically changed. But where does energy come in? The growth means demand for energy. Energy production has to grow to sustain the growth.

This article presents the main conclusions of a survey carried out as part of a research project on "risk management in the energy industry" sponsored by KPMG/ESCP Europe Chair Risk Strategy and Performance.

Abstract

The success of shale gas in the US has prompted companies to examine the possibilities of replicating the shale gas production and market in Europe. But in doing so they face various difficulties including issues such as the different geology, the density of European population, the legal, fiscal and land-use particularities and the service industry for onshore. To add to the difficulties, there is considerable environmental skepticism and opposition from lobby groups and media regarding shale gas drilling in Europe. Hence, a comprehensive assessment of risks of shale gas development in Europe is helpful to prevent harms as well as to take into consideration investment and growth opportunities. In this paper we outline six major clusters of risks associated with developing the shale gas industry in Europe: social, environmental, economic, regulatory, geopolitical, and technological. The outcome of this paper is extremely useful to companies' leaders willing to invest in shale gas in some European countries. This dimension of contemplating the risks associated with shale gas development, from the companies' point of view, has received less attention so far and provides opportunities for further research, particularly from management scholars.

Index Terms-- Shale gas, energy security, energy policy, energy market.

This paper evaluates the energy efficiency of EU countries over the period 2000-2010. At the first stage, Data Envelopment Analysis (DEA) is employed, combining multiple energy consumption data, economic outputs, structural indicators, and environmental factors. The efficiency estimates obtained from the analysis are evaluated in a second stage through a multiple criteria decision aiding methodology (MCDA). The proposed non-parametric approach combining DEA with MCDA enables the modeling of the problem in an integrated manner, providing not only energy efficiency estimates, but also supporting the analysis of the main contributing factors, as well as the development of a benchmarking model for energy efficiency evaluation in country level.

In this paper we present an empirical study to verify the assertion of a negative impact of economic growth on carbon efficiency using a cross country analysis. More precisely we are concerned with the relation between past growth and CO2 emissions, assuming that rapid growth in the past may explain lower carbon efficiency today. The central idea tested is that hasty growth is likely to slow down the improvement of energy and carbon efficiency. In other words, using an ordinary least square multifactor model to explain carbon intensity, we verify that the coefficient for an exogenous variable measuring the average past growth rate (apgr) for each country in our sample, is significantly positive.

This paper proposes a set of VaR models appropriate to capture the dynamics of energy prices and subsequently quantify energy price risk by calculating VaR and ES measures. Amongst the competing VaR methodologies evaluated in this paper, besides the commonly used benchmark models, a MC simulation approach and a Hybrid MC with Historical Simulation approach, both assuming various processes for the underlying spot prices, are also being employed. All VaR models are empirically tested on eight spot energy commodities that trade futures contracts on NYMEX and the Spot Energy Index. A two-stage evaluation and selection process is applied, combining statistical and economicmeasures, to choose amongst the competing VaR models. Finally, both long and short trading positions are considered as it is extremely important for energy traders and risk managers to be able to capture efficiently the characteristics of both tails of the distributions.

Most executives know that overarching paints of plausible futures will profoundly affect the competitiveness and survival of their organisation. Initially from the perspective of Shell, this article discuses oil scenarios and their relevance for upstream investments. Scenarios are then incorporated into generative explanation and its principal instrument, namely agent-based computational laboratories, as the new standard of explanation of the past and the present and the new way to structure the uncertainties of the future. The key concept is that the future should not be regarded as 'complicated' but as 'complex', in that there are uncertainties about the driving forces that generate unanticipated futures, which cannot be explored analytically. 

The major premises of the resource-based view of the firm (RBV) are that firms are bundles of idiosyncratic resources and capabilities and that firms with valuable, rare, inimitable and nonsubstitutable resources and capabilities outperform in their industries (Barney, 2001; Dierickx and Cool, 1989; Wernerfelt, 1984, 1995). Drawing on Barney (1991), Miller and Shamsie (1996) define property-based resources as appropriable resources controlled by the corporation through property rights, and in contrast, knowledge-based resources are those "protected from imitation not by property rights but by knowledge barriers", and often include technical, creative or collaborative skills (1996: 522).

This paper uses the resource-based view framework to conduct a comparative analysis of the major European oil and gas companies. This study will look at six companies namely BP, Eni, Repsol, Shell, Statoil, and Total, and identify which resources are drivers and determinants of their competitive advantage and financial performance. Drawing on the framework of property-based and knowledge-based resources, the paper will analyse six resource categories of oil and gas companies namely annual capital expenditure, annual changes in liquids and gas reserves, annual replacement ratios, refinery distillation capacity and number of service stations, number of employees and net income per employee, and annual levels of drilling activity in exploration and development with a disaggregation of successful and unsuccessful wells drilled.

The ACEGES (Agent-based Computational Economics of the Global Energy System) 1.0 model is an agent-based model of conventional oil production for 93 countries. The model accounts for four key uncertainties, namely Estimated Ultimate Recovery (EUR), estimated growth in oil demand, estimated growth in oil production and assumed peak/decline point. This documentation provides an overview of the ACEGES model capabilities and an example of how it can be used for long-term (discrete and continuous) scenarios of conventional oil production.

Keywords:

Oil production, ACEGES, agent-based model, energy scenarios, oil forecasting

A central goal that has eluded most countries in sub-Saharan Africa is to effectively manage their natural resources, develop diversified and prosperous economies, and as a result improve the standard of living of their citizens. This paper draws from the framework of diversification and economic growth, resource-based industrialization, resource curse hypothesis, ownership and control, and political structure and economic choices to examine how Nigeria and Angola managed their oil and gas resources from th 1970s and the outcome of their choices. The findings show that both countries were poorly equipped to diversify their economies and failed to achieve economic prosperity for their citizens. The contribution that this paper makes is to clearly outline and discuss key lessons that emerging oil producers in sub-Saharan Africa can learn from Nigeria and Angola for them to successfully manage their hydrocarbon resources.