Operators are responsible for the emissions that result from the production of oil and gas. It is imperative that companies consider all options for lowering their emissions, including collaborating with others.
The energy transition and the need for drastic change is at the centre of almost every public conversation operators and policy makers are having — and rightly so. The special report presented by the Intergovernmental Panel on Climate Change (IPCC) last year highlighted the need to hold global warming to 1.5°C rather than 2°C; currently, we are on course to exceed a 2°C carbon budget as soon as 2037.
In May 2019, the Committee on Climate Change (CCC) published its formative report titled, Net Zero: The UK’s contribution to stopping global warming. In this report, the CCC — an independent body established under the Climate Change Act 2008 that advises the government on setting and meeting carbon budgets and preparing for climate change — outlines the actions that need to be taken to ensure the UK achieves net-zero carbon emissions by 2050.
The extraction, stabilisation and export of hydrocarbons requires processes that result in the emission of greenhouse gases (GHGs) like CO2, methane, and oxides. These processes include combustion to provide electrical power and drive compressors and pumps, the flaring of excess gas for safety or during well testing and tank loading. Incidental releases of GHGs also occur from other platform equipment such as refrigeration.
The CCCs analysis considers four technologies for lowering industry emissions: electricity or hydrogen connections to offshore platforms; flare gas recovery; on-site carbon capture; and leak detection and repair (LDAR) for reducing methane leakage.
In 2018, emissions resulting from the production of oil and gas at offshore installations in the UK accounted for 3% of total UK GHG emissions, or 14.63 million tonnes of carbon dioxide equivalent (CO2e). The recommendation from the CCC is that, if we are to achieve the goal of being carbon neutral in 2050, this figure needs to fall to under 0.5 million tonnes CO2e by 2050.
Many operators in the North Sea have begun deploying and trialling new technologies to reduce emissions from the two activities that contribute the most to production-related emissions: offshore power generation and gas venting/flaring.
Production of oil and gas in the UK accounted for 3% of total UK GHG emissions, or 14.63 million tonnes CO2e. This figure needs to fall to under 0.5 million tonnes CO2e by 2050.
Powering offshore activity
The biggest contributor to offshore emissions is power generation, which is responsible for 74% of emissions on the UKCS. As such, it is one of the areas where the greatest impact can be had.
Power is needed offshore to run operations and support crew living quarters. This power is typically supplied via a small power plant (usually a gas turbine) on the offshore platform. Connecting platforms to the onshore power grids (supplying power from existing infrastructure on land), removes the need to generate power separately offshore. Connecting to the grid also enables access to more efficient power plants and to other, lower-carbon sources of electricity such as natural gas or renewable energy from wind and solar.
Norway is leading the way in this area, having pushed for electrification from shore on many of the newer platforms on the Norwegian Continental Shelf, maintaining its status as one of the world’s most carbon-efficient oil and gas producers. This change came as a result of a
Norwegian carbon tax introduced in 1991 on CO2 emitted from the production of oil and gas. As a result of this tax, Norwegian companies were driven to introduce technology like carbon capture and storage (CCS) at the site of production and electrifying as many of their platforms as possible.
In May 2018, Equinor began laying a cable to supply its Johan Sverdrup oilfield, one of the country’s five largest fields, with power from onshore. By using onshore power, Equinor estimates that emissions will be around 80% lower than they would using gas turbines on the platform. It is now exploring the possibility of electrifying other installations.
Electrifying major offshore oil and gas installations is not easy. There are challenges, both technical and financial, and many installations are in areas with little possibility for connecting to land-based power.
Where electrification may not be practical, there are other ways of lowering the emissions intensity of offshore assets. On-site CCS is another powerful technology for lowering emissions, allowing CO2 released from offshore activity to be captured and transported to a storage site. The captured CO2 may also be used, for example, injected into oil fields to stimulate production or be to create building and other materials, although this amount will be significantly smaller than the amount that must be stored.
Gas venting and flaring
Associative or by-product gas is produced as a result of oil production. Composed largely of CO2 and CH4 (methane), most platforms do not have the infrastructure to collect this gas for productive use so it is disposed of by releasing it into the atmosphere (venting) or combustion (flaring). These processes are first and foremost safety procedures, designed to remove highly combustible gas from the vicinity of an installation’s personnel and infrastructure.
Burning this associative gas (producing CO2 and water) is preferred to directly venting it. This is because methane is a powerful greenhouse gas, estimated to be 25 times more potent at trapping heat than CO2.
For this reason, it is vital that methane releases from installations are monitored and prevented by improving gas recovery or flaring where possible. Methane leakage from gas networks can be reduced through periodic leakage detection and repair or continuous monitoring.
OGUK member BP plans to incorporate continuous measurement of methane emissions in all its future oil and gas processing projects. The data generated from this will be used to identify the largest opportunities to target methane emissions and improve practice.
Gas flaring is subject to strict regulation and operators must report all flaring activity in the UK’s Environmental and Emissions Monitoring System (EEMs), with permissions needed for certain volumes of flaring over limited time periods from the Oil and Gas Authority. Operators are expected to minimise flaring as much as possible; where power generation represents 74% of CO2 emissions from the UKCS, flaring accounts for 23%.
BP is one of seven UK operators to sign onto the global ‘Zero Routine Flaring by 2030’ initiative set up by the World Bank Group. Flaring is a variable element of the industry’s GHG emissions and the solutions that exist to lower emissions from this process will require collaboration among operators. Emissions related to flaring can be tackled by building low- or no-routine-flare infrastructure, including a viable gas export for oil installations, or increasing the amount of gas pumped back into the reservoir at site.
Waste heat from offshore operations also has the potential to be useful. Eltiera is a start-up participating in the Oil and Gas Technology Centre (OGTC) TechX Accelerator programme. Its goal is to develop a way to generate electricity from waste heat produced on platforms offshore. This project, founded by Dr Ilia Cherezov, is in its early stage, but the implications are major, with potential applications ranging from waste heat recovery to geothermal power. “By harnessing the vast quantities of heat produced offshore, it is possible to extend the life of assets and delay decommissioning whilst also reducing the environmental footprint of operations to help the UKCS become the world’s first net-zero basin,” Dr Cherezov tells Wireline.
The future is electric
Changes in the production of grid-based electricity will also push change in the oil and gas industry. DNV GL’s global Energy Transition Outlook forecasts that the share of electricity in the final energy demand mix will rise to 40% in 2050, almost two-thirds of which will be generated by solar PV and wind. Natural gas will supplement variable renewables by meeting demand during peak periods. The report further forecasts that by mid-century, gas will account for 29% of the world’s energy supply.
If gas consumption is to increase, however, corresponding efforts must be made to decarbonise its use. The Net Zero report found that CCUS and hydrogen technology developed in regional industrial clusters will be essential to the UK achieving a net-zero carbon economy by 2050.
Drax Group and National Grid Ventures have also partnered with Equinor to deliver the UK’s first zero-carbon cluster in Humber, England. The region has been a strategically important industrial cluster for the UK, and crucially has the skills, industrial capabilities and offshore storage opportunities to enable transformation into a low- carbon hub.
The partnership will explore opportunities for developing a large-scale hydrogen demonstrator within the Drax site. It is also looking to scale-up the bioenergyCCS project currently underway at the Drax power station. A study outlining the technical, economic and societal opportunities for CCS and hydrogen in the Humber region will be published by the partners later this year.
“Our industry is crucial in delivering a net-zero economy. Not solely in delivering indigenous oil and gas for decades to come, thereby reducing our reliance on international imports, but through the transfer of skills and expertise that have been developed through a world-leading supply chain,” OGUK lead business adviser Harry Thorne reflects.
“As committed to in Roadmap 2035, industry will play its part in delivering net-zero emission produced oil and gas from the UKCS by 2050, but looking beyond to wider society’s emissions, are already leading the charge in developing a CCUS industry at scale, through the maturing CCUS cluster projects.”
A consortium like this has the collective expertise, credibility and means needed to deliver the recommendations set out by the CCC. Operators are limited by what they can do, or what is realistic, when working independently. Thorne continues: “The lines of what it means to be an oil and gas company have blurred, none more so than in the contractor community who are already out there delivering solutions across multiple industries, including oil and gas, renewables, maritime, defence and many more.”
A push from policy
It is in the industry’s interests to show investors and the wider public that it is acting to lower emissions at sites of production. Corporate environmental performance (which many companies disclose in annual reports and to regulators) is playing an increasingly important role in securing funding for projects, and as a result, making concerted efforts to reduce production-related emissions sends positive signals to investors and shareholders that industry is doing its part in addressing climate change.
Ultimately, operators and contractors within the oil and gas industry globally act within the parameters that policy makers put in place. Therefore, it is vital that governments support the industry in adopting better practices that can reduce emissions and provide the support required to deliver more renewable energy. If emissions-reducing technologies are deployed rapidly and ubiquitously, their costs will fall quickly, setting up a self-reinforcing effect.
This can only succeed if enabling policies are strengthened and enforced nationally. According to the report from CCC, current policy is insufficient even for the carbon targets that existed prior to the commitment to net zero by 2050.
“Net-zero emissions by 2050 is a challenge to all industries across the UK. Whilst a huge amount of emissions reductions have already been made across the nation, all sectors are working out exactly how they are to reach the necessary targets. Offshore oil and gas has many individual challenges relating to the difficulty in managing these changes on small structures hundreds of miles from shore. Collaboration and lesson sharing will be key in driving the cultural step change required to enable emerging solutions,” Thorne adds.
Collaboration as a solution
The Humber partnership exemplifies the need for operators to adopt collaboration to implement the necessary changes in practice that will support the UK’slow-carbon ambitions. By teaming up, operators can offset the potential costs associated with moving on from old practices.
Ultimately, the competitiveness of the UK as a basin will depend on lowering emissions from production — and providing evidence of how it can be achieved. Forming strategic partnerships with companies that already have the required expertise and infrastructure will strengthen businesses. As Remi Eriksen, Group President and CEO of DNV GL, says: “Existing technology can deliver the future we desire — including meeting the 1.5°C target set out in the Paris Agreement.”
When operators share their knowledge and successes in the process of fighting climate change, great strides can be made.