The first ever blockchain solution for the US crude oil market has been created
The first ever blockchain solution for the US crude oil market has been introduced, pioneered by Natixis, IBM, and Trafigura.
The distributed ledger platform, built on the Linux Foundation open source Hyperledger Fabric, allows major steps in a crude oil transaction to be digitised on the blockchain, ensuring improved transparency, enhanced security, and optimised efficiency.
Having all parties on the same ledger will mean that they can each view and share data simultaneously, from the time a new trade is confirmed and validated, to when the crude oil is inspected, to its final delivery. The system will contribute hugely to improving efficiency, visibility, and transparency whilst lowering costs and potential for cybercrime.
The crude oil industry is not well known for its modernity, but this platform is set to change that. Up until now, documentation has generally involved complicated paper trails using outdated technologies; this new digital solution will be hosted on IBM’s cloud platform, Bluemix, led and delivered by IBM France.
“We want to use blockchain to optimize the antiquated arena of commodity trade finance,” said Arnaud Stevens, Natixis’ New York Head of Global Energy & Commodities. “The current process is paper and labour intensive, we have multiple friction points with high processing costs and limited automation. Distributed ledger technology brings some much-needed innovation into our industry.”
“Processes in the energy and commodities trade business are ripe for improvement,” said James Wallis, Vice President, blockchain markets and engagements, IBM. “The approach we are taking, using a permissioned blockchain network built on the Hyperledger Fabric, has the potential to transform the crude oil industry by creating consistency in trade finance and by digitizing transactions and information sharing. Creating this ecosystem for the commodities market working with two world leaders in this industry will help create an entirely new approach to managing the global commodities trade."
“Together with Natixis and IBM, we have analysed the workflow of crude oil transactions in the US, detailing the different steps of a transaction, our interactions with the financial institutions and the documents exchanged among the various parties” said Rodney Malcolm, Trafigura Trading’s North American Chief Financial Officer. “The goal is to replace paper-heavy manual processes with blockchain-based workflows to improve transparency and data sharing. With the distributed ledger technology, all transaction participants in the network are updated simultaneously with a record that cannot be altered or tampered with. Each change or new transaction immediately creates a new record in the shared ledger.”
Read the April 2017 edition of Energy Digital magazine
Hydrogen Map shows 57 projects are operational globally
Currently there are 57 projects operational and a further 58 will be in development by the end of 2021. Construction of another 92 are slated to begin in the next decade.
Western Europe and Asia Pacific, which account for more than 83% of known low-carbon hydrogen projects, are driving growth, but US projects are rising. The US is well positioned to lead the green hydrogen economy due to the abundant, low cost renewable energy sources needed to produce it, such as wind, solar, hydropower and nuclear, according to McKinsey.
A hydrogen production facility being built at the Tabangao refinery in Batangas, Philippines is slated to be the first to generate blue hydrogen, in which hydrogen is produced using fossil-fueled sources but the resulting carbon emissions are captured, stored or reused.
"Low carbon hydrogen and ammonia production is the key to decarbonising the hard-to-decarbonise sectors like transportation, industry and buildings”, said Pillsbury energy partner and Deputy Energy Industry Group leader Elina Teplinsky.
"This map will be a helpful tool for a broad audience of policy makers, industry participants and investors, sustainability analysts, advocates and journalists tracking the development of low-carbon hydrogen projects and encourage dialogue between those parties to further accelerate adoption of this transformational technology."
"With governments and enterprises worldwide increasingly prioritising decarbonisation goals, we are laser-focused on helping clients capitalise on the enormous opportunities that the ongoing energy transition presents,” said partner Sheila Harvey, who serves as firm-wide Energy Industry Group leader at Pillsbury and co-leads the firm’s Hydrogen practice.
Hydrogen practice group co-leader Mona Dajani, who heads Energy & Infrastructure Projects and Renewable Energy teams, said energy demand is driving significant innovation in the hydrogen space.
"Green hydrogen projects, which combine renewable power sources with hydrogen production, are unlocking new possibilities for regions previously constrained by weak grid connections and transmission bottlenecks and marking a crucial step in the development of the green hydrogen business case," she said.
New Australian clean energy storage startup Endua aims to build hydrogen-powered energy storage and deliver sustainable, reliable and affordable power.
Endua is backed by $5 million in funding, technology and industry expertise from CSIRO, Australia’s national science agency; Main Sequence, the deep tech investment fund founded by CSIRO; and Ampol, the country’s largest fuel network.