The complicated road to decarbonisation
The energy sector is in a fascinating position: it needs to keep providing uninterrupted power to industries, governments, institutions and individuals, but it is also under increasing pressure to quickly, efficiently and (here’s the rub) cost-effectively transform itself and become carbon neutral. In short, there’s where we are today, there’s where many people think we need to be in the future and there’s a question about how get from one to the other.
Several global organisations including Facebook and Google have stated their ambition to become carbon neutral within the next decade. Many governments around the world are also committed to decarbonising their economies, including UK Prime Minister Boris Johnson who recently promised that windfarms will power every home in the country by 2030.
While there continues to be debate in certain quarters about the reality of global warming, there is increasing evidence that renewable energy is moving towards achieving the scale it needs to become an important and economically viable part of the global energy mix. If this tipping point is achieved and alternative energy becomes as viable as fossil fuel, the economic reality will make the environmental argument irrelevant.
An interesting article on the CoinTelegraph, XRP Ledger blockchain energizes decarbonization, but tokenization a challenge, describes some of the challenges facing companies as they work towards becoming carbon neutral. It also points out the role that the blockchain could play in the process, making it possible to establish digital identities for real world assets with data anchored transparently via a blockchain. This tokenisation process means that energy and power can be traded as they make their way through the exploration, refinement and retail stages of their existence.
The article points out that regulations are currently a challenge given the complicated process that energy has to go through as it makes its way from where it is produced to where it is consumed, but in a free market, regulators tend to find a way to accommodate rather than stifle innovation when there’s a opportunity to bolster government coffers.
The route from here to there
What’s clear is that there are many steps we need to take to get from where we are today to the carbon neutral future most people say that they want us to reach. One of the key steps is making sure that we are making the most of the resources that we currently have, irrespective of how they are generated.
PermianChain is looking to achieve this in two ways.
Primarily we are working with extraction projects to harness natural gas that is often wasted. In many small to mid-sized sites, the volume of gas that accompanies an oil deposit is too small to make it economically worthwhile to build compressors and pipes and send it to market. As a result, the gas is currently released into the atmosphere or flared off, either of which are environmentally damaging and represent an economic opportunity cost for the project. Rather than waste the gas, PermianChain processes it on site and uses it to power data centres. The processing power that this creates is then sold to blockchain and other crypto projects, creating a new revenue stream for the oil and gas firm and relatively cheap processing capacity for the crypto sector.
At the same time, we have developed a platform where oil and gas contracts can be traded significantly more efficiently than they are today. PermianChain uses the blockchain to tokenise barrels of oil and volumes of gas so that they can be traded quickly and efficiently and without the need for intervention from brokers or the maintenance of extensive back-offices. The PermianChain platform will also make it simple to trade contracts across jurisdictions, ensuring that regulators have confidence that communities are receiving what they are due from their natural resources.
There is also a wealth of data in the natural resources sector that is currently stored on disparate systems. By moving to a blockchain structure, the industry will be able to learn more from this data more quickly, helping it embrace more efficiencies and develop further.
Embracing efficiency and keeping prices low
We are delivering a way for the natural resources industry to reduce waste and increase efficiency and transparency, building a bridge that will help the energy sector as a whole move from where it is today to where increasing numbers of its consumers want it to be in the future.
The bottom line is that demand for energy is likely to keep growing over the next few years and we need to be developing practical ways of meeting consumers’ needs without losing sight of society’s goal of decarbonising the global economy in the least disruptive way possible.
We are in the process of tokenizing 60 megawatt power capacity dedicated to data centres, have active power sites at several oil and gas projects around the world, and already have natural resources contracts scheduled to be listed on our platform.
We believe that delivering an oil and gas blockchain would be an important milestone on the road to a carbon neutral future. By complementing and augmenting existing structures, we are more likely to deliver success.
PermianChain is a proprietary technology platform that brings together the crypto-mining and oil and gas sectors. Using a permissioned access blockchain, PermianChain makes it possible to utilise stranded and wasted energy resources, unlocking liquidity and transforming the way that oil and gas projects are funded, produced, bought and sold. Established in 2018, PermianChain Technologies is a pioneer member of the Blockchain Research Institute (BRI) and start-up member of the Petroleum Technology Alliance Canada (PTAC).