Making every molecule matter: the technology journey
The pressure from investors, policy makers and society for energy companies to decarbonise is growing and the energy landscape is already changing. A wide range of deep decarbonisation technologies, some existing, some yet to be developed, will be key, but which ones, and when?
Shell Catalysts & Technologies
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In recent years, the sector has developed a wide range of highly effective decarbonisation technology solutions. These will be crucial, but it will also require new technologies that are still in development and need complex engineering challenges to be resolved.
At Shell Catalysts & Technologies, we have a unique perspective here; as part of Shell, our corporate heritage is that of an energy provider, and we also provide tools and technologies to help Shell and others meet their energy transition objectives. So, this article explores technologies that may play a key role and discusses some of the engineering challenges that must be overcome.
I have broken this down into the short, medium and long terms and have avoided adding dates because the pace of change will vary around the world. Although each phase may be shorter or longer in different regions, the overall sequence is likely to be broadly applicable to most countries.
In addition, I must emphasise that, although I describe what the world may look like in each period, these are not forecasts or predictions. My intention is to provide context through plausible representation of how things could play out. Much of this aligns with Shell’s Sky scenario, but of course there are other possible, credible futures.
Interestingly, you will notice that many future technology solutions are likely to involve repurposing or integrating existing, tried-and-tested technologies. Clearly, further scientific advances are necessary to, for example, open new routes for re-engineering hydrocarbon molecules — and Shell continues to invest heavily here — but I believe that it is important not to overlook the opportunities that repurposing can provide.
Two new Shell technology solutions illustrate this point. The recently introduced Shell Blue Hydrogen Process is based on the Shell Gasification Process, which has a 70-year track record. And our new HVO technology, the Shell Renewable Refining Process, is based on fundamental, decades-old hydrotreating and isomerisation catalyst technologies. That is not to say there was no ingenuity involved in its commercialisation though: it took a great deal of innovation to understand the implications of the changing feed qualities, reaction kinetics and product qualities, for example, and to manage the risks appropriately. But ultimately the heart of the technology already existed.
I am highlighting this for two reasons. First, the need for retraining in the oil and gas industry is high on the agendas of policy makers worldwide but, from a technology perspective, the skills gap may be smaller than it may seem.
Second, energy companies, who are often seen as being risk averse, may be reassured to know that many emerging technologies draw on long track records.
Part 1: technology trends in the short term
In this period, the energy transition is gathering pace. Driven by the need to meet the goals of the Paris Agreement on climate change and achieve a world of net-zero emissions, oil demand stagnates, coal use declines, and use of natural gas and solar both grow. Government policies begin to crystallise and, as energy companies develop their energy-transition-related ambitions, technologies such as blue hydrogen, hydrotreated vegetable oil (HVO) and carbon capture are adopted.
Flexibility will be key, so there will be a need for incrementally moving molecules to the most profitable paths. For example, many refiners’ profitability will depend on their ability to find ways to shift increasingly heavy, low-value, bottom-of-the-barrel molecules into lighter aromatics and olefins to make intermediates for the growing manufacturing and chemicals industries.
To maximise margins, it may also be important for them to supply the increasing global demand for kerosene molecules, which is expected to pick up once global travel opens up again.
As the market changes, there will likely also be need for repurposing existing assets through revamps; two important solutions may be revamping a hydrocracker to capture new business opportunities in petrochemicals or lubricant base oils, or revamping a fluidised catalytic cracker to maximise propylene for polypropylene production.
Energy companies will likely need to act in each of the three classic decarbonisation pathways: they will need to increase energy efficiency, make lower-carbon energy products and store the remaining emissions.
Many will probably begin with energy efficiency studies, which are low-cost solutions. In addition, carbon pricing, which may be adopted by governments globally during this period, would lead to a meaningful cost for carbon being embedded into consumer goods and services and help to justify more developments.
Although it is imperative for energy companies to ensure that their own operations use energy as efficiently as possible, the reality is that most of their emissions come from their customers’ use of the energy products they sell. So, drives to achieve net-zero emissions will likely also require the introduction of low-carbon energy products such as biofuels. Incremental government mandates may provide further stimulus during this period.
Consequently, to reduce the carbon intensity of liquid fuel products, one of the most important solutions may be a phased investment programme that would begin with co-processing up to 10% renewable feedstock in an existing hydrotreating unit, for little or no capital expenditure. As biofuel mandates become more stringent in the future, a dedicated HVO unit for processing 100% renewable feeds could follow.
Another technology that could play a major role during this period is gasification, as it enables unwanted streams such as steam cracker residues to be converted into synthesis gas (syngas), a high-value product that can be used for producing chemicals, hydrogen and power.
The third decarbonisation pathway requires carbon capture, utilisation and storage (CCUS), which the International Energy Agency says is a key technology for cost-effectively reducing carbon dioxide (CO2) emissions from large industrial facilities.
The importance of blue hydrogen
In the short term, the use of blue hydrogen is set to grow and to provide an important stepping- stone between grey and green hydrogen.
Grey hydrogen is produced from natural gas, often in a steam methane reformer or a gasification unit from residue. The large volumes of CO2 generated are neither captured nor reused.
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