Carbon was one of the top subjects of discussion at the Offshore Europe conference in Aberdeen last month and was the theme of the plenary session Sept. 8.

This year’s conference — which, incidentally, broke records for both attendees and number of exhibiting companies — was titled “Energy at a Crossroads.”

Thomas Thune Andersen, chairman of SPE Offshore Europe 2009, moderated the panel discussion at which Danish Minister of Climate and Energy Connie Hedegaard, one of the speakers, identified climate change and energy security as “the key conundrum of our time.” In her view, oil and gas will not have a central role going forward. It is in the interest of humanity, she said, to diversify the sources from which the world derives energy.

Hedegaard identified two roads forward, both based on R&D. In one scenario, she defined R&D as ‘R’eject the scientific facts and ‘D’elay necessary action. In the other, she defined it as ‘R’ecognize new realities and ‘D’eal with them.

I will leave the “scientific facts” comment aside because there is an ongoing debate about whether use of hydrocarbons and resulting CO2 emission are in
fact the primary cause of global warming, and I will focus instead on the need to “recognize new realities.”

Predictions indicate that despite plans to develop unconventional resources, move into deeper water, and venture into arctic frontiers, there is little likelihood that the industry will be able to supply growing demand with fossil fuels alone in the next 20 years. Developing additional energy sources is critical. The real issue is the transition.

UK Energy Minister Lord Hunt talked about the need to “make the transition to a low-carbon economy,” emphasizing that hydrocarbons will be “the mainstay of our transition.” Lord Hunt went a step beyond Hedegaard, adding low-carbon energy development to the twin challenges of energy security and climate change.

John Manzoni, president and CEO, Talisman Energy, added “economy” to the list, pointing out that decreasing carbon emissions translates into increased energy cost.

Cost is one subject US policymakers are not addressing directly in the push to get the Waxman-Markey bill through the US Senate. The cost of a cap and trade law will be significant, and Americans need to be aware of that cost and be willing to accept it. The other critical point about the clean energy bill is that to be viable, it has to encourage E&P for oil and gas.

“It’s not just about hydrocarbons,” Manzoni said, “but it’s a lot about hydrocarbons.”

Slated as the final speaker, Andrew Gould, chairman and CEO of Schlumberger, acknowledged the need for clean energy but pointed out a “mismatch of skill sets” between oil and gas E&P and renewables. “A realistic transition to clean energy will require considerable time,” he said. “In the energy equation, there is no quick fix.”

Though Gould’s comments threw a rather wet blanket on the discussion, he was spot on in his analysis. The world does need more fuel sources to meet its energy needs, but there is no quick fix. The optimism that spurs world leaders to jump on the renewables bandwagon is admirable because without strong government incentives, there will be no change.

The road toward substantial input from renewables will be a rough one, however, and at present there are no real guideposts to mark the way.