The economics of deepwater development are more challenging than ever in today’s low-price environment. While technology innovation faces economic headwinds for the same reason, it also remains the key to future deepwater projects and will be essential to their competitive sustainability through market downturns.
In a session on the energy outlook and the future of innovations for deepwater in a cost-competitive environment at the recent Offshore Technology Conference, panelists emphasized the need for scalable technology, the standardization and simplification of projects, patient capital investment in innovation, greater collaboration, and new perspectives coming from outside the industry.
“Fossil energy sources will continue to be a main component of our energy mix out to 2050 and beyond,” said Robert Armstrong, director of the MIT Energy Initiative. “By 2050, fossil fuels will still account for about 75% of our primary global energy supply.
“How do we continue to take advantage of these fossil energy heat sources and at the same time start driving down carbon emissions?”
Armstrong noted the Mission Innovation commitment announced by 20 developed and developing countries at the 2015 Paris Climate Change Conference to double basic clean energy research and development budgets by 2020.
“Basic energy research is the beginning stage of the innovation chain,” Armstrong said, [but] “how do you get innovative ideas to come out of basic research; how do you get that into commercial practice? And that’s a particularly difficult thing to do in the energy sector because the amounts of capital required are quite large and the time scales are quite long, compared with what, say, the venture capital community is dealing with.”
An initiative addressing that problem, likewise announced at the Paris conference, is the Breakthrough Energy Coalition. It is a group of private investors who committed to picking up projects coming out of the Mission Innovation countries’ research—“providing the kind of patient capital necessary to move them from the laboratory and into commercial practice,” Armstrong said.
Deepwater Future Tied to Technology Innovation
Joel Parshall, JPT Features Editor
17 June 2016