The potential of the energy sector for a more sustainable world

Article by Rafael Souza, Director of Risk and Insurance at Horiens and co-coordinator of the XVI Forum IBEF-RJ Energy 2022 – Ressignifying the Oil & Gas Sector

The last decades have brought significant evolutions to society, but they have also stimulated important debates for several sectors, and there is no doubt about the role of companies in building a more sustainable world.

The energy sector is among the hardest pressed to advance ESG (Environmental, Social and Governance) practices, especially with regard to the transition to cleaner or renewable energies.

The goals of decarbonization of the economy – or even carbon neutral goals – taken on by a growing number of companies and governments in the not so distant future make this agenda increasingly relevant within the industry: how to generate more energy in a clean way? What is the impact of energy efficiency in the process of transitioning to a cleaner matrix? What are the risks, opportunities and challenges of the transition?

The good news is that the industry is already moving in this direction, and not just today. Technology and innovation are very present in the energy market, improving the efficiency of processes and products. Still, there is a universe of paths of enormous feasibility.

Offshore wind power generation, for example, is today considered one of the most promising renewable energy sources, expected to grow eightfold by 2050, according to the International Renewable Energy Agency (IRENA).

Currently the coastal regions of European countries concentrate most of the offshore wind farms, and around the world there are major innovations being studied, such as the integration of wind farms with offshore oil and gas drilling and production units. The goal is the gradual replacement of diesel oil as the main source of energy for offshore assets, which has been another example of how the industry is moving to take bigger and bigger steps.

In emerging countries offshore wind farms also have great potential. In Brazil we have about 1,228 GW to house this type of project. Recently, we had the publication of a Federal Government decree (no. 10,946/2022) related to the cession of physical spaces and the use of natural resources for offshore electric generation, an important milestone for the implementation of projects in Brazilian territory. In this decree, among other subjects, the impacts resulting from the exploration of the power generation activity are addressed, considering the risk studies and how the concessionaire intends to mitigate them.

We know that oil and natural gas will still be essential players in the global energy matrix for a long time to come, but the steps we are taking today to ensure the evolution of energy generation, distribution, and consumption, as well as the increase in the chain’s efficiency, are determinants to open new frontiers – and why not re-signify – the energy sector.

The challenges are many, the possibilities too!