Why oil companies are moving towards nuclear fusion energy?

/ Renewables / Wednesday, 02 February 2022 07:09

The push for green energy is gaining momentum by the day. Governments around the world are trying to put their best foot forward to tackle climate change in line with the UN’s agenda of carbon neutrality by 2050. With investors and activists adding to the momentum rooting for a sustainable and cleaner world, global oil companies are at the crossroads of the energy transition. Major European energy companies such as BP, Royal Dutch Shell, TotalEnergies, ConocoPhillips, Equinor, and Italy's Eni are turning towards low carbon and renewable energy already. All these companies have made commitments to cut emissions to net-zero by 2050 and massive reduction in oil production is the only way to achieve these targets. “While some oil and gas companies have taken steps to support efforts to combat climate change, the industry as a whole could play a much more significant role through its engineering capabilities, financial resources and project management expertise,” reads the IEA’s Oil and Gas Industry in Energy Transitions 2020 report.

So how carbon-intensive are O&G operations?

IEA experts estimate that around 15% of global energy-related greenhouse gas emissions come from digging oil and gas from the ground to the consumer. A large part of these emissions can be brought down with the right kind of investments in renewable energy sources. Moreover, over time, the oil wells become harder and the crude extraction process becomes more carbon-intensive. Fortunately, with today’s advancement in technology, it is easier to build new renewable plants from the ground up which are more cost-efficient than running coal plants. According to the International Labour Organization, despite inevitable job losses due to de-carbonization drives, the clean energy transition will create 18 million net new jobs by 2030.

However, the oil and gas industry landscape is diverse and there is no one-fits-all approach to the energy transition. Consequently, the industry’s search for carbon-free alternatives to fossil fuels has opened up investments in renewable sources such as offshore wind, green hydrogen as well as nuclear fusion. Some companies’ diversification drives have included non-core businesses such as electricity distribution, electric-vehicle charging, and batteries. However, the large-scale capital allocation for a sustainable future is expected from the oil and gas companies who are deemed to have the technological know-how and investment power. Moreover, capital-intensive clean energy technologies – such as carbon capture, utilisation and storage, and hydrogen will need the support of oil and gas companies to achieve their potential to bring about change in reducing carbon emissions, according to experts.

Pivoting toward green energy

“In planning for net-zero, companies in the oil and gas industry need to consider strategies involving reducing production costs, moving downstream into refining and petrochemical production, or investing in low-carbon energy, transitioning from ‘oil and gas’ companies to ‘energy’ companies, writes Dr. Steve Griffiths, senior vice president of research and development and professor of practice at Khalifa University on a research news article.

Directing its focus on cleaner energy, Italian energy group Eni took part in a $1.8 billion funding round for a project that aims to produce clean electricity from nuclear fusion. In 2018 Eni became the single biggest shareholder in Commonwealth Fusion System (CFS), a firm set up by the Massachusetts Institute of Technology to produce energy by fusing atoms at superhot temperatures.

Following in the footsteps of Eni, Chevron became the most recent player to show an interest in the technology when it invested an undisclosed amount of cash into Seattle-based Zap Energy. Other big companies have followed suit and the trend is likely to go on in the foreseeable future.

The energy demand is expected to triple by the end of the century, triggered by population growth, rapid urbanization, and electricity requirements in developing countries. The dependency on fossil fuels to fulfill the global energy demand is proving to be costly and unsuitable for the environment. Nuclear fusion energy as a potential large-scale, carbon-free, and sustainable form of energy is gaining momentum globally. Fusion has low radioactivity, massive generation capacity, and practically unlimited fuel.

Timely find?

Fusion energy as a commercial proposition for oil and gas companies had long been regarded as a long-shot offer. The major handicap for fusion companies is the uncertainty over the capabilities of the proposed reactor designs – unlike nuclear fission which produces energy by splitting a heavy, unstable nucleus into two lighter nuclei, fusion reactors work by fusing hydrogen isotopes in a process similar to that which powers the stars. However, scientists at the Lawrence Livermore National Laboratory facility in California have achieved the decades-long quest to harness fusion energy – a process that generates power the way the sun generates heat which can be used as a viable source of energy for humans. At their lab, the researchers were able to create the fusion fuel for the first time to heat itself beyond the heat they supplied into it, achieving a phenomenon called a burning plasma, indicating the possibility of self-sustaining fusion energy. 

The ideal future energy mix for the planet would be based on a variety of generation methods instead of majorly relying on one source. As a new source of carbon-free baseload electricity, producing no long-lived radioactive waste, fusion could make an impactful contribution to the challenges of resource availability, reduced carbon emissions, and fission waste disposal and safety issues.

Moreover, the ability to use practically limitless carbon-free power would ensure oil companies – who are obliged to cut down their oil output levels drastically –maintain their authority in the energy sector for the foreseeable future. With the recent breakthrough in fusion energy by American scientists, commercial fusion as the potential source for the energy sector is likely to see the light of day.

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