The words ‘eco-friendly’ and ‘oil industry’ are rarely used together in a single sentence. The past industrial revolutions have increased the carbon footprint, but the modern era focuses more on a greener approach for industries to be more sustainable by reducing their carbon footprint.
Recently, Shell (Europe’s largest oil company) announced that it is planning to reduce its carbon footprint by a considerable margin (almost half) in the coming years. This seems to be the right step towards a safer environment and limiting the rise of global temperature. As this announcement comes from a major oil and gas company, the sector will surely witness a massive change.
Banks are also favouring companies with an eco-friendly vision in giving loans and demanding greater transparency on the companies’ approach and their plans to move towards a low-carbon emission era. It is also interesting to see how companies will keep their business running with ever-growing demand for renewable energy resources.
This momentum to move to a low-carbon economy brings 2 choices for oil and gas companies - take bold steps to remodel themselves as low emission companies or continue their operations as usual, or become obsolete as oil and gas are non-renewable.
The 2015 Paris Agreement was aimed at all the countries working together, reducing their carbon emissions, and keeping the average increase in earth’s temperature to below 2 degrees. Thus, every sector and company will be given an ‘emission budget’ which means that only limited carbon emissions can be produced by them. So how can companies operate at the same level or increase their production in alignment with the 2-degree scenario?
The only way companies can fulfil the ‘emission budget’ criteria is by adopting new methods that improve their production and decrease carbon emissions. Below mentioned are some ways.
Investing in Renewable Sources of Energy - British Petroleum has always been a company with a vision for the future. It has always invested in a progressive approach towards a greener planet and an alternative fuel.
Oil and gas companies are certainly taking notice of the value renewable sources of energy like solar, wind, and other sources will bring to their business. Like BP, other companies have also started investing in these energy sources for long-term gain.
Solar energy is leading the industry as it is easily available and can become a primary source in the residential sector in the coming years. Oil companies that look to stay in the business for long, are now creating popularity for this energy source and working towards a carbon-free future. This will increase their energy production but will keep a check on the carbon emissions produced.
2. Preventing Methane Leaks - Oil companies are aware of the fact that methane is a key contributor to air pollution and aim to minimise its leaks at all costs. Using existing and futuristic measures, companies focus on minimising oil spills, accidental leaks, and wastage of oil.
Newer methods focus on recycling oil and transforming waste oil into re-usable diesel fuel.
3. Using Wooden Mats - Wooden mats are a new innovation that can prevent pristine environments by using reusable wooden mats. Wooden mats create temporary access roads to provide paths for equipment and crew movement that protects the ecosystem underneath. They can be simply picked up and used again at a new location. This method is highly beneficial as the environment is not harmed in any way and the mats can be reused.
4. Decreasing Freshwater Usage - All oil and gas companies require large amounts of freshwater on a daily basis for processes like fracking and separating oil from oil sands. Although most companies recycle almost 80-95 % of their freshwater, they aim to develop newer technologies that minimise the usage of freshwater from the very beginning.
5. Recycling is the key- Oil and gas companies are finding ways to enhance their efficiency to recycle non-potable water. They aim to achieve a 100% recycle rate of such water by using improved filtration methods and newer chemical-free water treatment to neutralise contaminants.
Treated water can be purified through reverse osmosis and can be used for drinking.
Treated water can be used to suppress dust on drill roads
Agriculture can be benefited with the use of treated water for irrigation and other purposes
Cost of running the oil and gas operations can be reduced exponentially by the development of a highly efficient process of water recycling.
Paperless Operations - The introduction of cloud-based systems promotes a move towards paperless operations, saving trees, and producing fewer greenhouse gases.
Analysing the Gap in Data Analysis - McKinsey reported that offshore platforms work at an efficiency of 77%, valuing this gap at $200 bn. This means that there is a gap in analysing the data and better use of data can improve the efficiency of offshore platforms.
Creation of Digital Oilfields - Digital transformation is a fact of life for every business now. This transformation has enabled oil and gas companies to create ‘digital-oilfields’, using technologies like big data, oil and gas software such as e&p software and petrophysics software, and cloud systems. Digital oilfields allow for close monitoring and utilisation of data in real-time, leading to better decisions that minimise wastage and carbon emissions.
Improving Production Processes - Oil and gas processes that do not directly contribute towards a cleaner environment can indirectly contribute towards better production processes, resulting in minimal wastage and maximum usage of resources. For example, new ultrasound technologies help companies to map the inside of their wells in 3-D, enabling them to make more informed and cost-effective production decisions.
Similarly emerging technologies like IoT, AI, automation, etc. can identify and improve operational inefficiencies.
10. Research in Developing Biofuel - Exxon Mobile introduced a new initiative in 2006 - ‘Protect Tomorrow Today’. In this initiative, the company invested $100 bn in biofuel research. The research found out that biofuels weren’t economically feasible at that time, but the company claims to have reduced its drill rate to 80% since.
Another oil and gas giant said it will be able to produce thousands of barrels of biofuel per day in a few years. Seems like biofuel is the buzzword in the oil and gas industry now.
Biggest oil and gas companies across the globe are now investing more in greener fuels and new technologies to reduce their carbon footprint. This is a transition period and the future seems to be promising as companies such as Shell are more focused towards a green transition, which will inspire other companies as well.