Decarbonizing Oil and Gas: Green Alternatives and Sustainable Energy Choices


06/22/2023


The oil and gas industry plays a crucial role in facilitating the global energy transition. However, the production and transformation processes associated with this industry contribute to approximately 15% of its overall environmental impact, as reported by the IEA. Moreover, these processes are known to be highly energy-intensive. In recent years, Schneider Electric has taken significant steps towards decarbonizing the energy sector by leveraging data, software, efficiency measures, and sustainable energy sources. The company's mission revolves around fostering a more sustainable and efficient energy industry, while also exploring new avenues for clean energy generation. 

Lately, there has been a considerable emphasis on the concept of the Green Premium within the industry, particularly with Bill Gates advocating for it in recent months. The Green Premium concept effectively highlights the cost factor as a major obstacle to the widespread adoption of clean technologies. However, a critical challenge lies in distinguishing between technologies and solutions that are unsuitable for large-scale implementation and those that have the potential to make an immediate and significant impact once they are scaled up. It is crucial for both governments and industries to carefully evaluate and differentiate between these two categories. 

We firmly believe that comprehensive environmental considerations must be integrated into all processes, products, and business decisions. Our commitment lies in enabling meaningful change. Currently, over 75% of Schneider Electric's product sales come from Green Premium solutions that offer enhanced transparency, environmental stewardship, and resource efficiency throughout the lifecycle of assets. This includes optimizing energy usage and minimizing the emission of CO2, water, air pollutants, and other natural resources. These efforts are aligned with our vision of a Net Zero future.

In the realm of the oil and gas sector, we can strive for even greater progress. I am convinced that Net Zero upstream facilities represent the future for this industry, and these possibilities are within our reach using the solutions available today. The initial step towards achieving this Net Zero future involves transforming the sector's infrastructure and adopting best practices that will remain relevant for the next 20 to 30 years. 

In collaboration with McDermott and io Consulting, Schneider Electric published the findings of the 'Net Zero Upstream Facility' study in March 2021. The study reveals that by making a marginal 2% investment in 'Green Premium,' the operational emissions of oil and gas operators can be reduced by a remarkable 76%, while the embedded carbon emissions (CAPEX emissions) can be lowered by 17%.

This can be accomplished through a combination of factors, such as a significant reliance on renewable grid power, the use of SF6-free switchgear, the elimination of flare systems and fugitive emissions, the promotion of remote operations, and the enhancement of staff safety.
 

The primary objective was to establish a facility with minimal carbon emissions. This goal is accomplished by sourcing power from the mainland grid, which incorporates renewable energy generation, and utilizing equipment and instrumentation that effectively minimize or eliminate leaks and venting requirements. 

Looking ahead ten years, one notable aspect of 2021 will be the mainstream adoption of the Net Zero concept, which has reshaped the economy. The pivotal factor that has made this shift towards a more sustainable future achievable is the rapid advancement of digital technologies. 

While corporate initiatives have driven progress in addressing climate change, it is surprising that only 23% of Fortune 500 companies have publicly committed to climate goals by 2030. This figure is low, considering the awareness of the potential consequences of climate change on both our planet and future generations. As highlighted by U.N. Secretary-General António Guterres in a September 2019 speech, "the climate emergency is a race we are losing, but it is a race we can win." 

There are numerous eco-friendly alternatives currently available for the oil and gas industries that not only reduce costs but also prove to be financially beneficial over their lifespan. As we navigate through the energy transition, it is crucial to invest in decarbonizing the oil and gas sector, considering that the costs involved are relatively minor compared to the overall benefits. 

Considering that 80% of carbon emissions stem from energy consumption, and a significant 60% of our energy management practices are inefficient, the task of transforming the way we generate, manage, and utilize energy to achieve Net Zero is substantial. However, the potential benefits are equally significant. As an industry, it is imperative to empower key stakeholders to make sustainable energy choices that effectively reduce greenhouse gas emissions in a manner that is both environmentally and economically viable.