4 July, 2021

Sustainability in the Oil & Gas Industry

INTRODUCTION

Oil and gas companies are currently in a race against time to make their operations more sustainable as pressure from investors, governments, and society as whole increases, demanding a focus towards long term sustainability. There are 4 broad categories of actions being taken by oil and gas companies to become more sustainable as the transition to a low carbon economy progresses:

  • Advancement in technology
  • Better usage of data and analytics
  • Improvements in operational processes
  • Investment in renewable or low-carbon energy sources

A 2017 study by McKinsey placed the oil and gas industry’s performance gap at $200 billion globally, and their research indicated that offshore platforms run at only 77% of their maximum production on average [3]. The primary source of the performance gap is the operational complexity of production and processing facilities, as operators are typically fed information from a multitude of sensors throughout the facility. While they are assisted with tools and systems that are in place, the complexity of operations translates into significant performance differences between different operator crews. Big data and analytics are being used to smooth out performance differences and reduce ecological impacts by identifying wasteful areas and reducing accidents, bottlenecks and resource wastage while increasing returns.

DRIVING EFFICIENCY THROUGH TECHNOLOGY

The advancement of technology has also allowed oil and gas companies to shift to more efficient practices. For example, new ultrasonic technology can be used for 3D mapping of oil wells, allowing companies to make cost-effective decisions. Additionally, the use of Industrial Internet of Things (IIOT), automation, reserve placement and emerging AI programs can help identify and eliminate inefficiencies in operations. The emergence of cloud computing has also led to the adoption of digital oilfields, which is a concept that combines business process management with digital technologies to automate workflow and maximise productivity.

Alongside the incorporation of technology, efforts have been made to improve the overall efficiency of extraction and processing of oil and gas. With action on Climate Change becoming increasing urgent much of the focus is on reducing Greenhouse Gas emissions and reducing the carbon intensity of hydrocarbons produced. Additionally optimizing the use of other resources, including water, plays an important role in improving overall sustainability of operations.  Hundreds of millions of barrels of water are utilised daily for production processes such as fracking or separating oil from elements present in oil sands. Much of the water used is recycled, with roughly 80-95% on average being sent back into the process [1]. Oil and gas companies are now seeking ways to reduce freshwater usage by rethinking the extraction process and improving recycling processes.

REDUCING EMISSIONS

As well as targeting reductions in emissions of carbon dioxide from venting and combustion activities, oil & gas facilities are increasingly looking to address methane emissions which make up a significant contribution to the overall greenhouse gas emissions from the industry. Advances in technology have allowed improvements in monitoring and measuring and combined with structured approaches to identify & address primary methane emissions sources, this often overlooked impact, is being systematically targeted.

SWITCHING TO RENEWABLES AND BIOFUELS

Besides reducing emissions and improving the efficiency of their operations, oil and gas companies are looking to diversify their energy profiles and invest in the renewables market. BP currently have around 1680 MW of wind capacity in the US [5] and acquired Europe’s largest solar power project developer Lighthouse in 2018 [4]. They have also invested in technology for the electric vehicle (EV) industry, investing in rapid charging batteries and infrastructure for EVs. Shell also has interests in wind and solar energy, investing up to $2 billion a year in cleaner energy solutions, as well as EV charging stations and power generation [8]. Similarly, Total has also invested in solar power, aiming to increase their total capacity to 5GW over the next 5 years [4].

ExxonMobil has chosen a different path, as their strategy is to reduce greenhouse gas emissions and advance biofuels and Carbon Capture and Storage (CCS) technology. They hold interests in about a third of the world’s CCS capacity, being the first company to capture more than 120 million tonnes of CO2 in year [6] and are currently developing a biofuel site that will be capable of producing 10,000 barrels of biofuel per day by 2025 [7].

These actions illustrate the increasingly ambitious targets being set by companies as they adjust their strategies to align with the global energy transition and as they aim to reach net zero emissions in the decades ahead.

AIE SUSTAINABILITY SERVICES

The oil and gas industry is well aware of the environmental impacts resulting from their operations. They are met with the dual challenge of reducing emissions while providing sufficient energy for an increasingly developed world, at the same time as pivoting towards a low carbon future. By utilising data analytics, improving the efficiency of their processes, incorporating technology and automation and investing in alternative energy sources, they are shifting their priorities to focus on long term sustainability.

AIE have also embarked on the journey to support the oil & gas industry in its transition towards more sustainable operations. AIE provide a range of innovative sustainability services that can be implemented throughout an asset’s life cycle such as methane emissions detection & reduction, energy optimization reviews, feasibility studies, Environmental Impact Assessments, sustainability due diligence & compliance. AIE also provide a leading ‘Sustainability in Industry’ training course that spans over a two-day period and covers a total of 8 interactive modules on the topic of sustainability management in the energy industry.

To learn more about our services and how we can help you achieve your sustainability goals, please contact us on info@aiegroup.org

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