January 8, 2024

The Evolving Energy Industry: In Conversation with Rodney Garrard, Geo Energy Adviser

Insights London Market
Offshore Energy

In conversation with Rodney Garrard, Geo Energy Adviser, we speak about his in-depth experience as a geologist, his move to the insurance sector and how he will be supporting Arch to assess risk and advise brokers and their clients around the energy transition space.

You have considerable experience as a geologist in the energy industry —what saw you pivot towards to the insurance industry and Arch, in particular?

“Variety is the spice of life” and I have always been drawn to the new, challenging, and fresh. Many people find themselves pigeonholed however I have been fortunate to have been able to ‘change lanes’ throughout my career. Moving to insurance felt like a pretty natural choice as it provided the opportunity to try something entirely new with a different perspective on how to leverage my knowledge and experience of multiple industries.  The energy of the future that our modern society requires will not only need to have undergone technical surety but must also be scalable and financially robust. So, it’s at this nexus where I can see myself making a useful contribution at Arch.

How does your unique expertise provide a different energy perspective that the insurance sector may not have had before?

As I alluded to, it can be difficult for people to move between mining, oil and gas and nuclear waste disposal industries. So, it’s unusual as a geoscientist to have held positions in all three resource industries. This has allowed me to see the proof-of-concept selection, business development, planning, and execution phases of a broad range of projects.   

Can you describe your role as Geo Energy Adviser at Arch?

My role as a Geo Energy Adviser spans the whole spectrum of energy types – conventional, intermittent, and innovative geologically-driven energy sources, which ranges from nuclear to solar power. The energy sector itself is evolving quickly and Arch is committed to being as agile and informed as possible; particularly as some of these energy forms might look good on paper, but you need to understand whether they are commercial, scalable and what the associated risks are.   

Ultimately, the focus is on assessing risk; the more you know and understand about any model or system, the more you can manage the risk. I bring decades of industry experience to the role, which enables me to support Arch on several fronts.

This could include advising underwriters around what datasets are required for establishing proof-of-concept for a certain project, helping an actuary on the evaluation of a certain technological aspect of a low-carbon energy project, or if a broker presents a submission on a `new` form of energy, advising on what the operational risks might be. We will be working directly with brokers, sharing geo-insights to help ensure the most appropriate solutions are delivered for our mutual clients.

Part of my role will also include using my experience to conduct geological hazard assessments of catastrophe models. This will involve analysing the underlying data to help calibrate the models more effectively and improve overall usage.

We hear a lot about the transition to low-carbon energy. At the recent COP28, 118 countries pledged to triple renewable energy capacity by 2030. This will obviously require vast investment in clean low-carbon energy infrastructure. What role can a company like Arch play in enabling this investment?

It’s about risk; the bigger the project, the bigger the financial risk.  Being willing to underwrite certain projects that Arch believes are robust and can be safely executed in the energy transition space helps to create an environment where businesses are more willing to invest in clean energy infrastructure. Arch has considerable sector experience, maintains longstanding relationships with its clients, and has a comprehensive understanding of their technologies and liability exposures, so is uniquely placed to support the transition to low-carbon energy.            

Carbon capture and radioactive waste storage are some current examples of the innovative geological disposal developments in the energy space. What are the emerging risks from these activities?

A phrase I often use when talking about geological storage is “the rocks don’t change but the way we assess them does”. My experience is specifically in relation to radioactive waste storage, which requires that material is stored safely for periods of more than 100,000 years. In the case of carbon capture, while the principles of the process and scientific rigour will be similar, the duration of the storage period required is much shorter at between 200-400 years. However, for reasons of practicality, both could essentially be seen as permanent.

As a general point, no project is without risk – it’s no different than building a house, bridge or road in some respects. There is technical surety in the geological disposal of both carbon capture and storage of nuclear waste. Geothermal energy, for example, can change how fluids move underground and create minor tremors. While this is not a significant risk, it can cause some concern amongst the general public.

However, I think the biggest risk currently is to forge ahead without a plan. The transition away from fossil fuels is arguably the single most ambitious thing humanity has attempted for a very long time. It needs to be done in a coordinated and thoughtful way. Baseload power – which could be geothermal, nuclear or hydro energy, should be the guiding principle, and then use more transitory power generation to augment the baseload. Every geographical area will be slightly different according to its geological endowment (available resources) and its social needs. 

Are you surprised that your career path has led you to where you are today?

As I mentioned before, I have always been interested in looking around the next corner, ridge-lining or turning my hand to new things, so I guess I’m not “surprised” as such. But could I have seen myself doing this two years ago? Not a chance. I didn’t have the insurance industry on my radar but given the rapidly evolving nature of the energy industry it makes perfect sense and is a very interesting space going forward.