Energy addition, not energy transition? What does it mean for the future of our energy system, and the climate? | Special episode recorded at ADIPEC, the world’s largest energy event

0:00In the United States we seem to have quite a bit of politicization of energy. One side, one kind of tribe has an affinity for these types of energy supplies. Another one thinks that those are terrible and that it's only this way to go. But I'm telling you, we really need all of the above. The transition will happen when it's economically viable. No greater example of that is solar or even onshore and offshore wind. When they become viable, it just happens. It doesn't really matter about policy. The energy transition for it to succeed, we need all the fuels on board. not to continue producing in the same way we have been producing lots of technologies out there to reduce the industry's impact on the environment.

0:39But really, I think and I'm a strong believer that the energy transition is about complementarity and substitution. It's too early for substitution.

0:50This episode of The Energy Gang is brought to you by ADAPEC, the world's largest energy event. ADAPEC 2025 took place in Abu Dhabi from 3rd to 6th November under the theme Energy, Intelligence, Impact. It brought together the entire energy ecosystem to address a dual imperative, strengthening today's energy systems and scaling intelligence solutions that advance global progress. More than 205 ,000 attendees and 2 ,250 exhibiting companies gathered to exchange ideas, forge partnerships and mobilize investment, showcasing solutions that deliver energy to more people more affordably and with lower carbon intensity.

1:26Across 380 sessions, over 1 ,800 expert speakers explored how the convergence of energy, AI, investment in emerging economies is reshaping markets and driving opportunities worldwide. Following this year's success, Adipec returns to Abu Dhabi from the 2nd to the 5th of November 2026. Discover more at adipec.com.

1:51Hello and welcome to The Energy Gang, a discussion show from Wood Mackenzie about the fast-changing world of energy. I'm Ed Crooks and all week we've been at ADPEC, the world's largest energy conference which is held in Abu Dhabi. It is a vast event, more than 200 ,000 people attend and it's also a place where you can see many of the most influential people who are shaping the world of energy. Now one of the big themes here has been the idea of energy addition as opposed to energy transition. What it refers to is the thought that newer sources of energy, in particular renewables and also other low-carbon technologies such as green hydrogen, are being added to the world's established energy sources, meaning oil, gas and coal, rather than replacing them.

2:30To write off our conference, I spoke to a range of people about that idea. Did they think that was the right way to describe the way the global energy system is changing? And if it is true, what are its implications? First of all, I spoke to Carol Nackley. She's had a long career in energy and now has an advisory firm called Crystal Energy. She's also Secretary General of the Arab Energy Club. I asked her first for her impressions on this year's ADIPEC as the conference drew to a close. I'm not new to ADIPEC, so I don't like to comment only on this year's ADIPEC. I like to take a look at all the previous ADIPEC sessions that I attended over the years and easily that goes over 10 years.

3:04And it's amazing. So each year you do find a main theme. So we cover all themes related to energy, but there is always one theme that dominates the discussions. and this year in particular AI, digital technologies. And it's not just in the discussions that dominated the pros and cons, the challenges, the impact. It's also you see it everywhere. So when you cross the halls, you can easily see the whole event has been more digitalized than all the previous years. And I mean, I learned a lot about AI, how it's being implemented in organization, the energy sector. And the only question that I kept on coming to my mind is mainly about the workforce, because I know the energy industry, especially oil and gas, you will always seek improvements in efficiencies, optimizing costs, and this is where AI is helping a lot.

3:52But I have to say that I did not leave with a convincing answer about the outlook when it comes to the workforce, because nobody really knows. So you have some organizations, they don't mention letting people go. They said it's against their culture. What they are doing, they are upgrading the skills. So they are having this kind of nice flow between humans and the machines and the software. But other people warn of job losses, but not quite convincingly. And the interesting thing, nobody knows how far AI can go with its impact on the industry. We also talked about AI and the increase in demand for electricity.

4:32but I did not hear about improvements in efficiency when it comes to the demand. So there are lots of unknowns with AI and I don't think AI is going to leave Adipak anytime soon. Because I was wondering how real you think a lot of this is. I mean, I've been speaking to some people here who said, yes, there's all this talk about AI, but it's kind of, it's fashion, it's the current trend, it happens to be what everyone wants to talk about at the moment, but a lot of it is cosmetic, a lot of it is kind of showy stuff and things that could be done in principle and might be interesting but are not actually really changing the way people do business and the way the energy industry operates.

5:10Do you think there's something in that or do you think there is a real change here? Look, that's how I'm going to put it. So far, and I'm not an engineer or a specialist in IT or AI, But I don't think, and I'm not convinced, that AI is as disruptive as a technology as, for example, what we saw as a share evolution. Even if you take horizontal drilling alone back in the 60s and before that, you know, they made deep water drilling possible. They opened up Alaska. They opened up the North Sea. They opened up offshore Brazil, for example. And then we had the hydraulic fracking added to horizontal drilling.

5:47And that's when we saw a serious disruption. I mean, look at market dynamics today, largely dictated by what happened in the U.S. with the share revolution. I don't see that happening with AI, at least not in the coming few years. So it is changing the way organizations are doing business, but it's not really rewriting, reinventing the structure of oil and gas markets or energy markets in general. That's really very interesting. I mean, again, talking about sort of changing fashions, it feels like two years ago, if you'd been at this event or many other energy conferences, all the talk would have been about decarbonization, emissions reduction, the energy transition to a low-carbon energy system.

6:26We've heard much less about that here this week. Absolutely. Yes. Again, does that reflect a real change in the industry, or is that just a kind of a change in the prevailing discourse? I don't think it's just a change in the industry. I think the industry is mirroring what is happening in the global environment. If you look at policy shifts, for example, the geopolitical changes that we are seeing, and not just in the U.S., but everywhere. I mean, 2024 was the biggest election year in human history, so we had changes everywhere. And with those changes, we also saw fundamental changes in policies.

7:03We saw policy shifts moving away from the rapid push towards decarbonization, achieving net zero to I don't like the word abandonment or a U-turn. Not a U-turn, but definitely a deceleration. Definitely like trying to rebalance the argument. For me, it was a bit too polarized, but we're not ditching the net zero. So now when you think about the future of the energy industry, when you think about the future in the light of everything you've been hearing here this week, what are you expecting now? What I always believed in, that the energy transition for it to succeed, we need all the fuels on board.

7:41Not to continue producing in the same way we have been producing. We mentioned AI earlier. Lots of technologies out there to reduce industry's impact on the environment. But really I think, and I'm a strong believer, that the energy transition is about complementarity, not substitution. It's too early for substitution. So when you look at the global energy industry, primarily oil and gas companies, private or nationally owned companies, I don't see them abandoning their net zero targets, right? I see them recalibrating their portfolio, especially the private companies. But when you look at the Aramco's of this world in Adnong, they did not abandon their efforts to reduce their carbon emissions because they are taking a much longer-term perspective than this immediate short-term debate.

8:26They want to be the last to leave a shrinking market, whether it would be maybe in 80 years or 50 years, I don't know. But there is not about just the one which has the lowest cost of production. It is also about the organization and the country that has the lowest carbon footprint, the lowest carbon intensity. Blend those two in addition to your resources, and they have massive reserves here in this region. They will be the last to leave a shrinking market when that happens. Yeah, I think that's really interesting, and I think that is a very compelling argument. So, question, what might we be talking about a year from now then?

9:01Come back to ADAPEC 2026. What do you think the hot topic will be then? Well, it will definitely, oil and gas will always remain key topic. One thing actually we should have mentioned is, for example, hydrogen was not a big thing this year. Although last year or the previous years, it was almost like AI today. I don't think, yeah, I don't think it's going to come back anytime soon, hydrogen. Maybe we'll have to wait a bit longer. Well, we do have to wait and see. I actually chaired a panel on hydrogen, talking about hydrogen and derivatives. I heard some pretty interesting things there from people operating in the industry saying that, as you say, it's out of fashion now, but there is actually a lot of progress being made.

9:40Costs are being driven down. Perhaps some of the hopes for hydrogen being a huge part of the global energy system have faded. But low carbon hydrogen having a key role in some sectors, in some countries, that's definitely not gone away as an idea. I still think there could be much more progress. Yes, it has not been abandoned. But definitely the excitement, I mean, last few years, in almost every session, everybody became hydrogen experts. You don't have that this year. And I don't think it's going to come back anytime soon next year. But we will continue to see definitely technology playing an important role, including carbon capture and storage.

10:16And this is an area which was there, especially in this region, because what's happening in this region also influenced the ADPEC agenda. Gas, the push for gas in this region. gas is going to continue to be a big theme, as well as renewable and maybe, maybe nuclear, because I can see like a stronger interest across the region to think about power, security, and increase in demand for electricity. We'll see. Yeah, I do think that's very interesting. The UAE, where we are at the moment, they've had their nuclear program, which has been a big success, it seems. I've just come from the United States, where there's talk about this massive push, $80 billion plus push into new nuclear construction being backed by the US government.

10:58And SMRs coming up. A lot of interesting technologies there. Is it the next hydrogen story? I don't know. I think it could be, but maybe some of those technologies. I think it's certainly not going to be room for all of those different ideas. There's a lot of different SMR designs that have been proposed. They're definitely not all going to make it. But as you say, some of them may reach commerciality. We'll have to see about that. But that's a very interesting thought, as you say. Maybe next year everything's going to be about nuclear. So I will see you here next year. And I'm just about to say it would be great to talk to you again next year and to see how things are going then.

11:33But thanks very much for joining us here. Thank you for having me with you. Very luckily. Thanks a lot. I next spoke to John Gilley, who's chief executive of the energy services company, Kent, which is dealing with a lot of these issues in a very practical way. It works on projects in oil and gas and hydrogen and renewables. I asked him first to talk about what he thought were the most important messages for the industry coming out of AdiPec. I've been coming to AdiPec for 15 years, at least 15, 16 years. And the narrative changes as how, you know, people talk about it and how it's actually put across.

12:05You know, so it used to be a pure oil and gas conference where you were talking about technologies. How can we drill for oil? How can we extract gas more efficiently? So on and so forth. to a point where you start talking then about energy transition. Certainly over the last couple of years, energy transition, how can we progress into energy transition, especially on the back of the COP that was held in Dubai recently where Sultan got that fantastic agreement. That narrative does seem to have shifted or deprioritized slightly and is replaced with AI, digital. How can we secure the data? How can we be more efficient?

12:41The fact of the matter is energy transition is continuing. Yeah, that is really interesting. And I want to get into a lot of those issues later on in the interview. Just before we do that, though, I am interested in hearing a bit about your recent history. You became CEO in 2020. And then the following year, Kent became a much larger company with the acquisition of the SNC level in oil and gas division. And you changed the name of the company from Kentek, which had been back to Kent. What did that mean for you? To be honest, frankly speaking, it was a crossroads for me because at the time I'm a complete energy transition geek or freak or addict, whatever you want to call it.

13:17I can't get enough of it on the data side of it, on the engineering side of it. And I did think for a while that maybe I should leave this industry. Maybe I should go and do something purely in renewables or something completely, completely different. And it was at that time that we went from a company of 2 ,500 people to the new company of 10 ,000 people overnight. So we had a complete reset of culture. We couldn't have said to those 7 ,500 people come in and bow down in front of the Kent Tech Culture. We rebranded as Kent. I think that was 2021. And during that work, we asked everybody, we interviewed or had workshops with over a third of the population of the company to ask them, what type of company do you want to work for?

13:58What should that company's purpose be? and so where I squared it away with my own kind of moral line was I prefer to be in the industry doing something about it than being outside of the industry you know driving my Range Rover and saying that these companies are destroying the planet so that's what I chose and funnily enough from the 3 ,000 or three and a half thousand employees that was the theme you know we want to be known as a company that are courageously tackling the greatest challenge of our time and the greatest challenge of our time is climate change So let's talk a little bit more then about the energy transition and climate change.

14:34You called climate change the greatest challenge of our times. There's a debate about that, right? Not everyone would agree with that. You'll find people who will say, yes, it's a challenge, but there's a lot of other challenges in the world, in particular, I guess, challenges around relieving poverty, global development, raising living standards and so on. And then on the other hand, you will also find people who will say, well, okay, if you think that, if you believe that climate change is the greatest challenge of our time. That means we just have to get off hydrocarbons as quickly as we possibly can.

15:04Even if, as we say, the hydrocarbons produced in the Gulf region that are relatively low emissions and low cost, you still need to move quickly away from those because of the urgency of the issue. How do you sort of square that circle? So, following off, getting off them as quickly as we can is probably not the right statement. getting off them in a controlled manner over decades is the way to go because the problem is is that what nobody needs is price spikes so we have to continue to invest in producing hydrocarbons responsibly we're in the regions of the world where we where we ought to and then at the same time we're in parallel invest in these newer technologies to make sure that those can also come to bear specifically sustainable aviation fuel and the pure renewables type projects.

15:58It's something that if you rush into will cause massive economic problems and we've seen that in past years with spikes in Europe and the gas cost almost crippled the UK at one point. So you can't have that. It has to be very well planned, very well documented as to how we will actually do this. It of course becomes extremely difficult because of the short... In countries where you have political systems that actually turn over every four years, it becomes almost impossible, you know, because every four years, those political parties are looking for re-election. So drives that they're trying to do in implementing policies can be reversed or can be dampened down.

16:36And we've seen that. We've seen that for decades, for decades, you know. And so your point is then that if you want public buy-in to the energy transition, if you want public support for decarbonisation over time, you have to do that in a way that people aren't acceptable that's affordable crucially and that doesn't hurt living standards. I kind of change my view on this as time goes by. In the end of the day the transition will happen when it's economically viable. No greater example of that is solar or even onshore and offshore wind. When they become viable it just happens. It doesn't really matter about policy.

17:17Trump cancelling wind projects and and deprioritizing that. Okay, he has canceled certain projects that he was allowed to do, but wind will continue in the US because it's cheaper to provide electricity. When you compare it to what the US utility customers are paying for electricity because of failed nuclear projects to the actual cost of a kilowatt hour from solar or wind, it's a fraction. So there's no policy that will stop that because business people will just look to make their margin. And how do you see the outlook for some of those low-carbon sectors then? Because as you say, there are cases where the case for low-carbon energy is just economically very, very compelling without any subsidy or anything, and wind and solar would fall into that category.

18:00When you think about some of the things you've been talking about, though, think about offshore wind, think about sustainable aviation fuel, those are relatively higher cost. Where the policy support isn't there, those sectors are really challenged. so what's your expectation of how that's going to play out do you think the policy support will be there to enable those sectors to continue to grow or is that a risk do you think that'll be withdrawn and they'll face severe problems i really would see that sustainability aviation fuel is a fuel for the future it's just a no-brainer when you think about actually let's say the decarbonization of transportation i think the well the demand for oil at the moment is about 100 or 102 million barrels a day depending on the week and what's happening around the world 40 million miles of that is in personal transportation private transportation that transportation whether people like to admit it or not is being electrified as we speak with certain countries you know i can't remember what china is at but it's about 50 or 60 percent overall evs now proliferation is up around eight percent there's an inflection point on that curve that when you pass it it could hit 25 percent within three years.

19:07You know, there's this adoption curve that you have, but nobody's really tested it on something such as large as a car, normally on an iPhone. And the inflection point on the iPhone, I think, was around 7%. So for a car, it might be bigger. Once that happens, that will take 10 to 15 million barrels of demand off the page, which is monumental, you know. And that will have, I think, the type of effects that nobody can understand just yet. You know, we saw the effects from Russia's invasion of Ukraine, what it had on gas, you know, and this type of effect is just unprecedented. And it will be a different world, you know, and so we will start to decarbonise massively.

19:43For the first time last year, oil was 30 % of the world's energy supply, with renewables being roughly a third. Largely the new capacity, the increased capacity on the renewables, has been met by wind and solar. You know, so energy transition is happening. Oil and gas will be around for decades to come, and we should continue to produce it as responsibly as we possibly can. Many of our projects with ADNOC is about actually reduction of flaring, taking out of carbon within the process before it ever gets burnt. So lots of the projects are actually, I would have said maybe 7 or 8 out of 10 of our projects, even though they're in conventional oil, have an element of energy transition in them.

20:21But nobody really understands or talks about it. And what about AI then? That, as you say, has been another big theme of the conversation here at IPEG. yeah that's something you do a lot of work in but you have a data center business yeah uh how has the ai revolution been changing what you do massively and we've been investing millions millions in it for the last number of years and we look at it in different ways you know so we've looked at the actual data center side of things which is the company that we acquired subtle as consulting and so that's just purely figuring out how to design and build data centers globally so subtle was a relatively regional company and that's what we figured that we have at camp we've got this wonderful global reach platform that we can buy regional companies plug them into our platform and then grow them from from there so that's one side of we're also interested in the power side to supply energy to the data center so where that can be let's say gas turbines or where they're not really interested in the whole rhetoric about nuclear supplying power to data centers i think is nonsense but other things like wind or you know let's say isolated energy supplies like offshore wind that we can bring ashore and power data center.

21:30So we're interested in making that connection somehow into data centers. On the AI side of things, we've got this as kind of two different sides. One is a sales side where we've launched our own product called Innova AI, which is a Kent product. We won the award last year for best AI solution. And that was launched last year at Adypec. It's in the AI hall as well. You can see AI is becoming a much bigger theme. And then outside of that, we've retained consultants to guide us on our roadmap towards how we integrate AI into our business, either to sell it to our clients or to make us more efficient so we can pass on the savings to our clients.

22:07And we have to hardwire the logic of that and theme it towards our purpose, which is tackling the great challenge of our time. We're continually looking, how can we use this software, this gift from whomever to actually accelerate us working more efficiently, producing hydrocarbons more efficiently and more responsibly, but also increasing the energy systems of the future, which the world is... At some point, it's an existential threat for our company. That's why we're investing. That's why our purpose says we want to give the world the energy that it so badly needs. The world's addicted to energy.

22:46We're all addicted to energy. So there's all sorts of different things that we can do in terms of helping the world to get the energy that it requires. Yeah, that's a really great point. And that's actually a theme that my colleague on this podcast, Amy Myers-Jaffe, often picks up on, which is that people talk about AI and energy and people talk about data centers and rising electricity demand and all of that in terms of problems that are being created by AI. There is also enormous potential for AI to help solve these challenges and can have a really positive contribution as well. Huge. I mean, it's outside of our remiss, so I'm not talking about Kent, but it's maybe something that we could look at in the future, especially as soon as we've kind of dipped our toes into data centres, and I think we'll be very large in data centres.

23:29And we're building mega data centres in this region, in Saudi and in Abu Dhabi, and we're looking at going into our regions then with the help of the companies that we've acquired. But if you think about energy usage and efficiently using that, So behind the meter type energy generations in houses, you know, having AI systems figure out which houses are good energy batteries in terms of heat or cooling, that it can draw on that energy at different times and running more intelligent networks. You know, the actual need for or the demand will drop dramatically. At the same time, we're electrifying vehicles.

24:05We get, you know, demand side generation. It will transform. It will transform. And I'm sure there are companies doing that. I would love for us to actually get into that side of things. You know, when you talk about passive houses, you know, reducing all of the demand on that side of things, as well as everything that Kent and our clients are doing on the other side and meeting somewhere in the middle. I'd love to do that. But we can't do everything. We can't do everything. Yeah, we're busy with what we have. Yeah, but it certainly is a very exciting time, isn't it? Fascinating. The possibilities are amazing.

24:39and it's going to be, as you say, fascinating to follow how it develops and how this industry changes in the years to come. For now, though, John Glead, thanks very much indeed. Great talking to you. My pleasure. Thanks for joining us. Cheers. Another executive we spoke to was Sascha Sisiu, who's the sales manager for the Middle East and Africa for Erzen, which is a German manufacturer of industrial equipment. I asked him what he'd learned at the conference. Do you think carbon reduction and addressing climate change has been de-emphasised here this year? No, I would say the opposite actually.

25:10And to be honest, I think the most drive that actually comes from companies. So they have their own mandate, whether it's Oman, UAE or other GCC countries or even African countries. So they have their own mandate to push that decarbonisation forward. And which is good for us because we have innovative products that actually fit into this gap. That's still on. Yes. Right. And so obviously there's been a lot of a debate about the energy transition and what's happening to that and is there an energy transition and so on. But you're saying that as you see it and certainly from your customers, that interest in reducing emissions is still stronger than ever?