Six Ways Oil and Gas Companies Are Addressing Sustainability and What It Means for Automation

Keywords: Oil and Gas, Sustainability, Net Zero Emissions, Carbon and Energy Intensity, Worker and Process Safety, Spill Reduction, Flaring, Oil and Gas Sustainability , ARC Advisory Group.

Overview

When most people think of sustainability they probably think of things like electric vehicles, renewable power, and recycling, but not so much oil and gas sustainability. The world’s largest hydrocarbon producers – the integrated oil and gas companies – are taking significant steps toward net zero emissions and carbon neutrality. Even as the world continues its transition to renewable energy, demand for hydrocarbons, in the form of oil and natural gas, continues to increase and will remain the foundation of the global energy mix for the foreseeable future. After a brief dip in demand due to COVID in 2019, oil demand is increasing. The war in Ukraine has restricted energy supply and flow worldwide and a new economic blueprint for the oil industry is forming as regions that previously depended upon Russian oil and gas have scrambled to find new sources of supply. According to the latest release of the BP Statistical Review of World Energy, fossil fuels still represented 82 percent of worldwide primary energy use in 2022.

It makes a lot of business sense for oil companies to adopt sustainability strategies. Adopting a sustainability strategy can eliminate a significant amount of waste in the form of reduced emissions, eliminating oil spills and pipeline leaks, and capturing countless metric tons of methane and other substances that are released into the atmosphere. But the oil companies are not focused on existing oil and gas related processes alone. The large integrated oil and gas companies are transforming themselves into energy companies, making huge investments in sustainable power, in the form of wind, solar, and hydrogen, and are entering into long-term energy contracts with large end users like Amazon to provide renewable energy at scale.

Let’s take a look at six ways oil and gas companies are moving forward with sustainability, which includes net zero emissions, flaring reduction, net carbon energy intensity reduction, worker and process safety, reducing spills, and investment in low carbon electricity and renewables. Each of these areas has a significant impact on automation and OT technology investments, from the sensor level to basic control, MES applications, cybersecurity, and more.

Net Zero Emissions

Oil companies have established concrete emission reduction goals. Shell's target, for example, is to become a net-zero emission company by 2050. In 2021, the company took an important step towards becoming a net-zero emissions business with a new target to reduce absolute emissions from operations (Scope 1 and Scope 2) by 50 percent by 2030, compared with 2016 levels. ExxonMobil plans to invest approximately $17 billion through 2027 on lower greenhouse gas emission initiatives.

Flaring Reduction

When it comes to net zero emissions, oil companies are looking at more than just emissions reduction itself. Flaring, where product, either gas or liquids, is burned because it cannot be captured. According to the World Bank, the amount of product flared in a year is 140 million cubic meters, is enough to power all of sub-Saharan Africa. Flaring accounts for seven percent of overall greenhouse gas emissions. It is the World Bank guidelines on flaring, also known as the Zero Routine Flaring by 2030 initiative, that many of the major oil companies have agreed to honor. ExxonMobil, for example, recently announced that it will eliminate routine flaring globally by 2023. Expect increased investment in flare gas recovery systems, and vapor recovery systems. All these systems have associated automation, sensor, and actuator components as well as more advanced forms of software.

Net Carbon Energy Intensity Reduction

Major oil and gas companies are focused on reducing the amount of energy and carbon required to produce a unit of product, also known as net carbon energy intensity reduction. Vast energy efficiency programs are being implemented to reduce this carbon intensity, from electrification of offshore operations to the adoption of carbon intensity metrics. Chevron, for example, has adopted a Portfolio Carbon Intensity Metric (PCI), which represents the company's carbon intensity across its entire value chain, including Scope 3 emissions associated with bringing its products to market. Developing carbon intensity metrics can create more efficient processes, identify opportunities for decarbonization, and more. Aramco too is working to reduce net carbon intensity and is working on solutions like advanced carbon capture and storage and circular carbon economy technologies.

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