Oil And Gas: Strategies For Pollution Reduction

The oil and gas industry is a major source of pollution, emitting large quantities of greenhouse gases, toxic gases, and other complex organic contaminants. These emissions contribute significantly to climate change and have adverse effects on both human health and the environment. As the industry is responsible for over half of the world's energy use, it is crucial to find ways to reduce its pollution output. While oil and gas companies often claim that reducing pollution is too costly or challenging, the technology and resources needed to achieve this already exist. This includes electrifying operations, using renewable energy sources, and implementing methane reduction strategies. Regulatory bodies also play a key role in establishing emission guidelines and encouraging the adoption of clean technologies and practices. By prioritizing environmental responsibility, the oil and gas industry can significantly reduce its pollution output and contribute to a greener future.

Stop flaring and using related gases

Flaring is the process of burning off excess gas that comes out of the ground during oil drilling. This gas is either burnt or released into the atmosphere. Flaring is often done for safety reasons, to reduce pressure and prevent explosions, but it is also a way for energy companies to save money. If they are extracting small amounts of gas or drilling in remote areas, they may opt to burn the gas instead of investing in the equipment and pipelines to capture, transport and process it.

Flaring is a major source of carbon dioxide emissions, releasing around 140 billion cubic meters of natural gas globally each year, which is the equivalent of over 400 million tonnes of carbon dioxide. This is a waste of a valuable natural resource, as the gas could be used for power generation, sold to businesses and consumers, or conserved. Flaring also releases harmful chemicals such as methane, black soot, nitrous oxide, benzene, naphthalene, and black carbon. These pollutants have negative impacts on human health and the environment, contributing to climate change and the melting of the Arctic ice cap.

To reduce pollution, the oil and gas industry should stop flaring and start capturing and utilizing the associated gas. This may involve building the necessary infrastructure, such as equipment and pipelines, to capture and transport the gas for productive purposes. Oil producers can also re-inject the gas into the ground to raise the pressure in oil reservoirs and extract more oil, or use it to power their drilling sites.

There are economic and technical challenges to capturing and utilizing associated gas. It can be expensive to build the required infrastructure, especially for small and dispersed oil production sites. Additionally, oil fields are often located in remote and inaccessible places, making it logistically challenging and costly to transport the gas. However, there have been technological advancements that provide alternative ways to address the flaring problem, such as portable CNG or mini-LNG facilities, small-scale gas-to-methanol conversion plants, and flare gas utilization through electricity generation.

Some countries have introduced policies and regulations to reduce flaring, such as Norway, which taxes flaring-related carbon dioxide emissions, resulting in an over 80% reduction in flaring emissions since the mid-1990s. The World Bank and the United Nations have also launched the Zero Routine Flaring by 2030 initiative, which encourages companies to develop plans to use or conserve all associated gas without non-emergency flaring. This initiative has been signed by 54 energy companies and 32 national governments.

By implementing available technologies, adhering to regulations, and prioritizing environmental responsibility, the oil and gas industry can significantly reduce pollution by stopping the practice of flaring and utilizing the associated gas for more productive purposes.

Electrify operations

Electrifying oil and gas operations is a straightforward way for the industry to significantly reduce pollution. Wind, solar, and other renewable energy sources can power extraction and refining processes, which would make a huge difference in reducing emissions. This is especially true when considering that the oil and gas industry is the largest industrial source of methane, a potent greenhouse gas.

Electrification of upstream facilities with low-emissions electricity is one of the key levers to achieving a reduction in emissions intensity. This includes electrifying high heat intensive units, such as coker units, which require a temperature range of 800-1000°F and would demand about 150 megawatts of electricity to electrify.

The benefits of electrification are clear. Electrically driven equipment is slightly more energy efficient, has lower maintenance costs, and, when using zero-carbon electricity, significantly lowers the greenhouse gas emissions of the industrial site. Additionally, the investment cost of electrical equipment is often lower, as is the case with industrial boilers.

The time is now for the oil and gas industry to electrify its operations. With the falling costs of renewable electricity and electric equipment, as well as more stringent emission regulations, the industry can make significant strides in reducing pollution.

Stop methane leaks

Stopping methane leaks is one of the fastest ways to slow down global warming. Methane is a very potent greenhouse gas, responsible for more than 25% of the global warming the Earth is currently experiencing. The challenge is that methane is colourless and odourless, making it difficult to trace emissions. However, there are effective ways to tackle this issue.

Firstly, it is crucial to improve the measurement and reporting of emissions data. This can be achieved through a combination of operational knowledge and methane quantification technologies, such as drones and sensor-equipped aircraft. While satellites are also useful for detecting and measuring large methane emissions, they may not always be practical due to ambient conditions like cloud cover or snow. Therefore, a comprehensive approach utilising multiple tools is ideal.

Secondly, addressing the root causes of methane leaks is essential. These leaks are often caused by equipment failures, so regular maintenance and upgrades are necessary to prevent them. Additionally, implementing prescriptive requirements can help tackle routine emissions. For example, if specific equipment is identified as a significant source of methane emissions, prescriptive rules can mandate the use of lower-emitting alternatives and prohibit the installation of high-emitting equipment.

Another effective strategy is to establish performance-based or outcome-based requirements. Instead of prescribing specific actions, these regulations establish mandatory performance standards that companies must meet. This provides flexibility for companies to decide how to achieve the target, encouraging innovation and cost-effectiveness.

Economic instruments can also play a role in reducing methane leaks. Taxes, subsidies, or market-based approaches can incentivise companies to reduce emissions. For instance, a methane tax would encourage firms to "replace valve controllers or pay for the methane they emit." Additionally, incentives such as allowing companies to deduct the cost of replacement equipment from their tax liabilities can motivate them to take voluntary action.

Finally, information-based requirements can help address the uncertainty surrounding methane emissions. By requiring companies to tag and report their emissions regularly, stakeholders can gain valuable insights into the magnitude of the problem. This increased transparency can drive voluntary action and encourage external pressure on operators to reduce emissions.

Improve energy efficiency

Improving energy efficiency is a critical step for the oil and gas industry to reduce its environmental footprint and enhance operational performance. Here are several detailed and direct strategies the industry can employ to improve energy efficiency:

Energy Efficiency Staircase

The first step is to understand the energy profile of facilities and assess the energy demands of each installation. This involves analyzing data in real-time to identify areas of inefficiency and set improvement goals. Shell has developed a 5-stage "energy efficiency staircase" that provides a comprehensive framework for companies to follow. This includes performing regular energy efficiency reviews and routine evaluations of progress using metrics and data.

Improved Drilling

The oil and gas industry has witnessed advancements in seismic surveying, analysis, and drilling techniques, leading to improved drilling success rates. The increased use of hydraulic fracturing and horizontal drilling has enhanced initial production rates and well productivity. Even with fewer wells drilled, companies are achieving higher production and profitability per well by drilling in more productive areas.

Innovative Data Acquisition and Management

The introduction of fully optimized digital oilfields, enabled by advanced information technology and data management systems, has revolutionized the industry. Centralized data management systems, such as PetroBase Pro, facilitate seamless data sharing and provide valuable insights. These systems enable companies to make faster and more informed decisions, optimize asset utilization, and improve overall operational efficiency.

Leak and Spill Prevention

Implementing leak protection technologies is essential for oil and gas companies to prevent environmental disasters and financial losses. Investing in research and adopting industry-sponsored spill prevention strategies are crucial steps. Setting spill reduction goals beyond regulatory requirements demonstrates a proactive approach to environmental responsibility.

Use of Energy-Efficient Equipment

Investing in energy-efficient equipment, such as turbines, pumps, and compressors, is a straightforward yet impactful strategy. Regular energy audits and equipment upgrades to innovative solutions are key to reducing energy consumption across the supply chain. By identifying areas for improvement, companies can implement changes that lead to significant energy, time, and cost savings.

Focused Operational Strategy

To further enhance energy efficiency, oil and gas companies should adopt a focused operational strategy. This includes conducting regular energy audits, upgrading to more efficient equipment, and implementing long-term action plans to effectively manage energy consumption. Additionally, stopping the flaring of associated gas during oil production, which contributes to high levels of greenhouse gas emissions, is crucial. Alternative options, such as selling associated gas or processing it into liquefied natural gas, should be explored.

Strengthen regulations and enforcement

Strengthening regulations and enforcement is key to reducing pollution in the oil and gas industry. Governments and regulatory bodies must step up and prioritize the health and future of people and the planet over the profits of the industry. Here are some ways to strengthen regulations and enforcement:

Emission Standards and Guidelines:

Implement stringent emission standards and guidelines for the oil and gas industry, specifically targeting the reduction of methane and other harmful pollutants. The U.S. Environmental Protection Agency (EPA) has taken significant steps in this direction, issuing rules and guidelines to curb methane and volatile organic compound (VOC) emissions from oil and natural gas operations. These regulations apply to equipment and activities used in the onshore oil and gas industry. Other countries and regions should follow suit and establish similar standards.

Frequent Inspections and Compliance Checks:

Increase the frequency and rigor of inspections to ensure compliance with state and federal regulations. In the U.S., for example, hundreds of thousands of oil and gas wells operate without any inspections, according to a report by Earthworks. Regular inspections by qualified personnel can help identify violations and ensure that companies are adhering to environmental standards.

Strict Enforcement and Penalties:

Enforcement of regulations must be strict and consistent. When violations are identified, they should be formally recorded and penalized. The penalties should act as a deterrent to discourage future violations. Currently, there is a lack of incentive for companies to comply as penalties are often too lenient.

Government Intervention:

Governments have a crucial role to play in regulating the oil and gas industry. They must prioritize the implementation and enforcement of emission reduction regulations. In Canada, for instance, the federal government has been urged to move forward with regulations to reduce oil and gas pollution. Similarly, other governments should take decisive action to hold the industry accountable.

Collaboration with Stakeholders:

Collaboration between governments, industry stakeholders, and environmental organizations is essential. Stakeholders should be actively involved in the creation and revision of regulations, as their input can help shape effective policies. However, it is crucial that the influence of the oil and gas industry does not hinder the implementation of much-needed environmental protections.

Transparency and Accountability:

Enhancing transparency and accountability in the oil and gas industry is vital. Regulatory bodies should require comprehensive reporting and disclosure of emissions data, making it publicly available. This transparency can help hold companies accountable for their environmental impact and facilitate informed decision-making by policymakers.

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