The Oil and Gas Industry and carbon neutrality

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According to a recent report by the International Energy Agency, global climate change can be combated by the energy industry. Currently, oil and gas comprise the largest part of the worldwide energy supply, which means they play an essential role in the energy transition and the path toward net zero.

Some companies are taking steps to reach carbon neutrality in recent times. Oil and gas companies have launched various initiatives to reach net-zero consumption. Here are some of the initiatives undertaken by the Oil and Gas industry to help achieve zero emissions on the planet.

The Oil and Gas Industry and carbon neutrality - Vira Petroleum Company

Investing in Renewable Energy

Companies that produce oil and gas have invested a lot of money and effort into renewable energy over the past few years as they look to diversify their portfolios and move towards greener energy.

In the 1980s, BP became the first oil and gas major to commit significant resources toward renewable sources. In recent years, the company has been re-investing in renewables, despite selling many of its renewable energy assets in the early 2010s.

The British Petroleum company, for example, owned a 43% stake (worth 200 million USD) in Light source (now called Light source BP), the European market’s leading developer of solar energy projects.

The company expects its installed renewable energy capacity to reach 20 GW by 2025 and 50 GW by 2030.

To fulfill its goal of installing 35 GW of new renewable energy production capacity by 2025 or 100 GW by 2030, Total Energy (formerly Total) has also set ambitious targets related to renewable energy production. Earlier this year, the company announced its goal of becoming one of the top five renewable energy companies in ten years.

Total Energies’ renewable energy production capacity increased to 7 GW in 2016 through the consumption of 8 billion USD.

The company has made several strategic acquisitions worth billions of dollars in the past few years. In this way, Saft Batteries, a French battery manufacturer, holds a 60% stake in SunPower and Direct Energie, an electricity retailer in France.

At the same time, Eni has focused particularly on wind energy, entering into a partnership with GE Renewables and Equinor. As of 2020, there is only 1 GW of installed capacity. The company aspires to have five GW by 2025 and sixty GW by 2050.

The Oil and Gas Industry and carbon neutrality - Vira Petroleum Company

Carbon capture technology research and development

Many see CCS (carbon capture and storage) as a major way to reach carbon neutrality within the oil and gas industry. There is much hope for CCS technology, even though the technology is still relatively new, relatively expensive, and has caused some skepticism amongst stakeholders and investors.

With 38 facilities at various development stages, the US currently holds 50% of the world’s operating capacity. In fact, the US processes 83 million tonnes of CO2 per year. Moreover, the US has the largest CO2 pipeline network globally, spanning about 8,300 kilometers (5,150 miles). With 11 more CCS projects to be completed by 2030, there is a lot of interest in CCS technology in the US.

It is also evolving in Europe, where 13 commercial operations capture 21 million tonnes of CO2 annually using the CCUS technology.

As one of the biggest investors in CCS technology, ExxonMobil leads the way. It holds about one-third of the global capacity as of January 2020. Recently, they announced the creation of a new business unit called Low Carbon Solutions, dedicated to commercializing and deploying emission-reduction technologies. It will initially focus on carbon capture and storage (CCS). Over 20 carbon capture projects have been proposed as part of this initiative.

They have set the standard for carbon capture as the first company to capture over 120 megatons of carbon dioxide in a year (equivalent to over 25 million automobiles).

As part of this collaboration with the University of California, Berkeley, they developed a metal-organic framework (MOF) that could capture a significant share of the CO2 generated by natural gas power plants to generate electricity. Though there is much activity within the field and projects that require expertise and skilled workers, carbon capture still needs more funding and support from policymakers and investors to be effective.

The Oil and Gas Industry and carbon neutrality - Vira Petroleum Company

Digitalizing oil and gas processes to increase efficiency

As the oil and gas industry decarbonizes, new approaches to sourcing, using, and thinking about feedstocks, energy, and companies will be needed. Many analysts believe that digitalization is essential to oil and gas companies’ transition toward net-zero.

To further carbon neutrality efforts within the field of energy, new and existing technologies, such as Artificial Intelligence (AI), Big Data, Cloud computing, and the Internet of Things (IoT), must be incorporated.

Researchers from Minsait surveyed 263 energy executives and managers in global firms from all over the world, and their findings revealed that oil and gas companies tend to invest most in IoT and cloud/mobility technologies.

The following areas are experiencing the greatest impact of transformative technologies:

  • Enhanced recovery
  • Exploitation at greater depths
  • Fracking/tight reservoirs
  • Operations and maintenance
  • Production-related

Some companies have collected and analyzed their industrial process data for years, which has led to an in-depth understanding of their business processes. They can then use this data to improve their processes further since it has been collected in cloud-based storage.

A recent study demonstrated that optimizing the design of one of their LNG facilities could cut emissions by as much as 130 kilotons each year (equivalent to removing 28,000 US cars from the road each year).

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