The energy realities challenge
As an international energy company, Statoil has an important contribution to make to finding solutions to this energy, climate and environment dilemma. We believe we have the technology, experience and capital required to develop some of the future solutions.
One of our first responsibilities is to communicate what we consider to be "the energy realities" .
As indicated by the International Energy Agency's World Energy Outlook 2011, despite rapid growth in renewable energy sources, meeting the world's growing need for energy will require all sources of energy - including hydrocarbons. In that context, Statoil's greatest contribution will be to continue reducing the carbon intensity of our oil and gas production and developing low-carbon and renewable technologies where we can utilise our capabilities. Today, we are convinced that delivering a reliable supply of natural gas is our greatest contribution to solving the energy and climate dilemma.
At a time when available resources and projects are becoming increasingly difficult, we fully recognise that accessing new energy resources depends on our capacity to explore and develop reserves without adversely affecting people and the environment. For each of our projects, we aim to assess relevant environmental and social issues and minimise the negative impact. Statoil has, for example, established a dedicated environmental and social strategy for the Barents Sea that builds on 30 years of experience. The main objective of the strategy is to develop technology and operational procedures that will enable the company to operate in a sustainable manner anywhere in the Arctic by 2030.
Statoil also believes that unconventional resources, including oil sands, will be needed to meet the world's future energy needs. The challenges are to make production sustainable and cost effective. Statoil is now investing in developing and implementing the most environmentally advanced technology currently known to recover oil from oil sands.
HSE and carbon efficiency - a competitive advantage
Statoil aspires to be an industry leader in HSE and carbon efficiency, measured in relation to our peers. We believe this will be a competitive advantage in a carbon- and resources-constrained world. This ambition has a central role across the organisation, driving continuous improvement.
External benchmarks already document that Statoil is one of the most efficient upstream producers in the conventional oil and gas industry. This is due in part to 20 years of regulation on the Norwegian continental shelf, a carbon tax, geological conditions in the Norwegian sector and close proximity to gas markets. However, as we move into heavier oils and more complex projects internationally, the carbon intensity of our activities is expected to grow.
Measures to drive carbon-efficient investments are already part of Statoil's management and control system. The capital value process (CVP), which is our decision process for investment projects, requires that new investments identify technology development and concepts for carbon dioxide reduction from the beginning of the project design phase. Statoil also has an internal carbon dioxide price that we use when evaluating future projects and when making projections about future energy demand. Over time, we expect the cost of emitting carbon dioxide to rise substantially in Norway, the EU and North America compared with today's level.
Being an industry leader in HSE and carbon efficiency means driving technological innovation. We have a strong commitment to environmental and climate research aimed at identifying new solutions for reducing carbon emissions and staying at the forefront of developing environmental management tools. Driving technological innovation also means working with our suppliers and the different sectors involved in the oil and gas value chain to find solutions that can reduce emissions. In particular, we are involved in several technology projects aimed at reducing greenhouse gases from our shipping activity. These projects focus on both new technical solutions and what type of energy carriers can be used in future.
Energy and climate leadership programme
As economic conditions and the world's energy realities become increasingly complex, we believe that Statoil's management must effectively anticipate and understand market shifts in order to position Statoil for continued growth and development. To improve our executive leadership capabilities in relation to climate and energy, we launched the climate and energy leadership programme in 2011. Ten senior executives have been nominated to take part in the programme, which started in October 2011 and lasts for one year. Ten new senior executives will be nominated every six months. After completing the programme, participants are expected to actively invest in the company's ability to identify and respond to future uncertainties within their respective areas of responsibility.