Bill Wilks and Phil Copestake of Merlin attended the 2025 edition of the GESGB/AAPG BEOS show in London earlier this month.

In their latest blog post they share the take-aways from the event regarding the state of the industry and future trends. Whilst the traditional E&P industry continues to be sluggish for smaller companies, the dawn of sub-surface energy storage could herald a golden age for geoscientists. If you couldn’t make it, continue reading and get the gist of what you missed out on.

The first reflection from BEOS 25 was that it was poorly attended – a far cry from the vibrant Prospex events of the past! That was no reflection on the convenors, who organised the event extremely well and, in the case of Neil Hodgson, gave it the energy and passion it deserves! However, there is no doubt that the UK government policies have clearly taken the wind out the sails of the UK-based energy industry and that clearly translated into a lack of bums on seats.

Green Energy

Well the first thing to say here is that there is an ever-expanding list of green energy initiatives being offered. That creates a challenge for all to keep up with a fast-evolving vocabulary and nomenclature, let alone the science! One can only imagine how difficult it is for non-technical regulators and politicians, yet they are the ones who need to set critical policy to get these projects off the drawing board and into the ground! As many of these all have to be connected across borders, it creates another level of regulatory complication to cut through. Some highlights from a number of excellent talks:

A snip from the PCI-PMI Transparency Platform

Rosa Nieto talked us through the evolving plans for the European Hydrogen network, which will plug together production, distribution, storage and power generation across the continent. You can view the plans live here on the snappily titled ‘PCI-PMI Transparency Platform’, see figure above. Geoscientists will be interested in the list of new or re-purposed salt caverns that are awaiting the green light. There are challenges to overcome, though, including cross border permitting, the ‘fast cycling’ of pressures required and (a surprise to me) the limitations in available compressor technology.

CAES energy storage ‘salad bowl’ concept of from Corre Energy

Compressed Air Energy Storage (CAES) was covered by Alistair Metcalfe, who explained how CAES sites could provide longer-term energy storage in salt caverns, whilst being co-located with short-term battery storage, wind power/green hydrogen production and even hydrogen storage.  This ‘salad bowl’ concept sounds really smart and certainly wins my prize for the best new buzzword at BEOS! CAES also carries the distinct benefit of being relatively cheap in terms of $/KWh and avoids the more controversial environmental aspects of pumped hydro or battery farms.

Elke Mugove cranked up the buzzword count by covering the spectrum of sub-surface Thermal Energy Storage (TES) techniques. There is Aquifer (ATES), Borehole (BTES) and Mine (MTES), all with multiple options and no industry-wide agreed nomenclature. Nevertheless, it was great to see a host of EU-funded feasibility studies which will seek to quickly assess the viability of each option. You can follow these at the PUSH-IT website. (Yes, another acronym – I will leave that one for you to explore)!

The theme of sub-surface energy storage was further explored by Bruno Colcombet who gave real-world examples of existing schemes involving salt caverns, porous media (i.e. reservoirs) and mines. Mine caverns can be un-lined or lined, with the latter allowing pressures to be increased from 10bar to 250 bar. Bruno highlighted the far lower cost (per m3) and far higher volume/capex ratio of sub-surface storage versus above-ground tanks. However, there is a big BUT here… Whilst there is a need to build dozens or hundreds of caverns to deliver an aspired 45-90 TWh  of hydrogen storage capacity by 2030, almost none are under construction in Europe. Indeed, a short perusal of the PCI-PMI Transparency Platform reinforces this, with all (?) planned or possible sites awaiting permitting. Bruno suggested that a political shock was necessary to drive change as the Suez Crisis had done in 1956, driving the French government to issue a decree which compelled refiners and distributors to develop storage equal to 25% of the national consumption of hydrocarbons. The result? A complex of leached salt caverns in southern France. So, will European governments drive similar change to mitigate the risk from Russia, or should future wind farm contracts carry a mandatory requirement to develop sub-surface storage? If European governments can come together on energy in the way that they have with Ukraine, then all is possible.

All in all, the green energy theme clearly showed that our geoscience community can make a huge contribution to delivering the Energy Transition, if the politicians can provide financial and regulatory incentives. However, if all of these schemes mature and are added to geothermal, CCUS and O&G, one wonders whether we will have enough geoscientists to go around..  Are you listening Mr. Milliband?

Traditional Oil and Gas

A snip from the Energy Dashboard showing renewable solar and wind energy generation and the continued baseload support from gas required for the UK energy demand over two weeks from 1st March 2025

As usual, there were some excellent summary ‘state of the industry’ presentations and discussions, including those from Mike Lakin and Jerry Jarvis. Some broad conclusions from these are summarised as follows:

1. Global O&G demand will remain strong in the decades ahead, as part of the energy mix. (Obvious, I know, but it’s always good to recognise that it is being communicated).
2. Mike discussed the issue of variance in renewable power sources and showed data (from the superb Energy Dashboard site, figure above) to illustrate days when the UK would have suffered power outages, had gas-fired power stations not been available. This theme was re-visited by several speakers, who analysed the desperate requirement for short and long-term energy storage, to mitigate the intermittency of wind and solar.
3. Between 2020 and 2040, human population will need some c. 1.6 billion barrels of production and Jerry’s ‘global creaming curve’ calculations estimate that only 19% of that will come from exploration IF the exploration trend continues. So, what will fill the gap? Unconventionals? Production from existing giant fields (which will likely become less efficient and less environmentally friendly)? A challenge indeed.
4. Who will deliver the new reserves and production? Jerry showed an insightful graph that mapped out the decline in operating companies, with 49% lost since 2009. Wow! As most of these losses have been small and mid-caps, we are left with a top-heavy demographic.
5. We might say the same of the service companies of course, and Jerry showed that the global delivery of 3D seismic has also been declining, together with wildcat drilling, despite the sustained high (ish) oil price – a global disconnect!
6. Deep Water drilling has also seemingly plateaued, with 3km of water being the practical limit right now.

So, looking ahead, something has to change to reconcile the supply and demand, unless renewables can pick up the slack. Many speakers pointed out the reticence of investors to support O&G in recent times, due to the perceived impact on their ESG credentials. Whilst so many companies have been gobbled up in M&A activity, precious few start-ups have been funded to take their place. However, the speakers documented the evidence that the tide is beginning to change, partly due to investor frustration with the limited profitability from green energy. So, will we return to a world where the ‘little mushrooms’ of our industry will, once again abound, or will we be a world completely dominated by super majors and NOCs? Our opinion (and that from discussions at the conference) is that a more balanced demographic is required, as the smaller companies have ‘greased the wheels’ of E&P throughout history and contribute to the efficiency of the global delivery process. We’ll see. The fragmented nature of global politics makes this difficult to predict!

Let’s hope for a bright future for our geoscience and engineering family. There is so much that we can contribute. Merlin is focused on doing its level best to support the many-faceted transition, by continuing to deliver the high-quality geoscience component of energy projects, whether they be green energies or traditional oil and gas. Come and talk to us if you would like us to help accelerate the growth of your business!

KeyFacts Energy Industry Directory: Merlin Energy Resources