There is huge pressure on our industry to reduce CO2 and greenhouse gas emissions. And, if we all went back to riding a bike or a horse to work, we could reduce emissions, but let’s face it that’s not happening anytime soon. The lure of those air-conditioned Ford F-150 seats are much more appealing on a hot 100°F+ summers day!
There are many high investment, long lead solutions to assist with reducing emissions or being carbon neutral, such as carbon sequestration, reducing gas flaring, identification, and remedy of methane leaks, or investing in renewable projects. But, none of these are immediate changes that provide a benefit now.
In this blog we’ll look at a few practical measures, that any operator can take, to have an immediate impact on how you manage your wells day to day and reduce emissions.
How the oil and gas industry can rise to the challenge of global warming
There’s a love-hate relationship with the oil industry. Consumers love the end products – from plastics and feedstocks to medicines and, of course, the fuels that will heat homes and offices and power vehicles for a long time to come. Modern life can’t be sustained without them.
Many of those same consumers consider oil to be dirty, wasteful, polluting, and downright nasty. In ALP we’ve struggled to hire software developers! As soon as they realize that we work in oil, they’re not interested.
Throw in climate change and increasing political, investor and activist pressure for the industry to change its ways (and to be seen to change its ways) and it’s clear that there are challenges, as well as opportunities.
In August 2021 a United Nations report1 stated that the planet’s average temperature has risen by 1.2oC and will rise to 1.5oC, by 2040 unless radical and almost immediate action is taken. The 2015 Paris Agreement on climate change committed most countries to being carbon neutral by 2050, to prevent ongoing warming of our planet.
Worldwide, the oil and gas industry account for nine per cent of all greenhouse gas (GHG) output, just from our operations. Add in the fuels we manufacture, which produce 33 per cent of global emissions, and our sector alone is responsible for 42 per cent of global emissions2.
Despite the bad press, demand for our products is not going to go away. Even though renewables are expected to form half of all energy used by 2040, oil and gas will still comprise 40 per cent (see Figure 1), and the total amount of energy used will still be rising. The world’s population will have increased from 7.5 billion to 9.0 billion, expectations about living standards will have grown as developing nations become more prosperous and gas will still be used as a transition fuel away from coal, lignite, wood (or cow dung!)4.
Figure 1- Power generation and carbon intensity of electricity in the Sustainable Development Scenario
Our industry is in the spotlight as a major contributor to greenhouse gasses (GHG), so what can we do?
Problems – meet solutions
Ultimately, the reduction of emissions will be driven financially. Carbon taxes will drive this – the more you emit, the more you pay.
Our industry is expected to remove 90 per cent, or 3.4 gigatons, of CO2 and its equivalents by 2050. It’s all looking a bit tough. Prompt action will be advantageous.
Oil company people, almost by definition, are challenge seekers - so let’s see how we can meet the challenge.
Invest in digital oil field technology to unlock change
The World Economic Forum3 estimates that our industry can cut 1.3 billion tonnes of CO2, avoid spills equal to 230,000 barrels of oil and save 800 million gallons of water – all by 2025. That’s effectively a $1 trillion saving and a great start.
The key to unlocking change is to use digital technology (see Figure 2) to radically improve efficiency at the individual well level. Operating wells more efficiently will reduce power consumption, result in more production for less cost, reduce site visits and prevent many vehicle accidents. This will substantially reduce upstream emissions, which account for a quarter of the entire industry’s output4.
Figure 2- Investments in digital technologies in the Oil and Gas industry
Digital technology allows us to monitor and analyze individual wells fast. We can use machine learning, or artificial intelligence, to optimize them quickly and keep them optimized.
Optimize wells in seconds not hours
While it can take around two hours for a field engineer to scrutinize a single well, a digital system can do the same job in four seconds6. It can present the results and recommendations for optimizing multiple wells on a dashboard identifying all the wells that are candidates for attention almost immediately.
That means an engineer can handle many more wells in a working day, remotely altering their parameters to optimize them, lower the amount of electricity used to run a pump, or the amount of gas burned in a compressor to produce gaslift wells.
Limit site visits with remote monitoring
Remotely monitoring and controlling individual pumps means many fewer site visits. This has two consequences – much reduced travel, which decreases transport emissions and consequent CO2, and many fewer crashes.
Oilfields are usually in relatively remote areas with unlit, dirt roads. Accidents happen, too often. One operator found the number of site visits has fallen by nearly a quarter (23 per cent)7, after adopting digital technology. That’s thousands of miles not travelled, lower accident rates and higher resolution operating data. Machines are better at watching wells than people.
Digital technology, such as our Pump Checker®, not only allows hundreds or thousands of wells to be constantly monitored and flag potential or real problems, it’s also vendor and lift method agnostic, automatically integrating data from multiple sources into one system. That means technical teams only need to learn and log onto one system, substantially reducing their workload and increasing their productivity.
IT costs are reduced, as the system is run in the Cloud, constantly updated, and protected against hackers and can be used anywhere. This also decreases emissions. During pandemic lockdowns, our clients reported that our systems were business-as-usual for operators working from home, while gaining access to their own organizations’ systems was problematic, to say the least.
Leverage AI to increase efficiency across the industry
Digital tech can learn, anonymously, from other operators using the same system. By merging data from multiple operators, AI predictions are even more accurate and constantly improve.
One organization using digital technology is useful but if every operator followed suit, the effect on the industry’s emissions would be spectacular. Compare it to household recycling of domestic waste. If one household, does it, the effect is negligible. If every household does, the results are impressive. By extending digital technology to all of our wells, the potential for emissions reduction is significant.
Reduce flaring and methane release
If there’s one universal image of our industry, it’s a well pad or rig flaring. In the Permian Basin, it is estimated that 661 mcf/day was flared in first quarter of 20199. The public and politicians see wasted energy and lots of CO2.
To give a sense of scale, 9075 bcf of natural gas (that’s equivalent to half of Europe’s entire piped supply of gas) disappears globally though vents, leaks and flares every year. It’s gas worth $40 billion10.
Flare gasses could instead be converted to compressed natural gas (CNG), liquid petroleum gas (LPG), gas-to-liquid diesel equivalent (GTL) or liquefied natural gas (LNG), all of which have ready markets and are much less CO2 intensive than solid fuels.
Vapor recovery units can be installed, along with compressors, to make use of the gasses and reduce GHG emissions. Double mechanical seals on pumps, gas seals on compressors and valve stems with carbon packaging rings, among other opportunities, help to retain gas that can be sold.
Many North American shale fields are remote, which makes transporting compressed gas by road uneconomic, so gas is flared. Depending on the extent of expected carbon taxation, those economics could change. Long term, the solution is joint-operator pipelines to processing centers.
Saving $1 trillion
Longer term, we’ll be looking to carbon capture, storage and use (CCSU), which has not yet been commercially achieved and might not be viable unless heavy industries (and heavy CO2 polluters) join as partners. They will have little choice if carbon taxes rise.
For our industry, it’s a huge opportunity. We know geology and we know drilling, the building blocks of carbon sequestration. Equally, deep drilling for geothermal heating is a shoo-in11, which could help to power industry and heat homes.
Then there’s manufacturing “green” and “blue” hydrogen from our CO2 to make pollution-free fuel. Both are workable but there’s a lot more development to come.
Here and now, digital technology monitoring and control already exists and can be implemented in weeks.
It’s eminently possible to reach that $1 trillion saving by 2025. Let’s adopt the Nike philosophy and ‘just do it’.
Get in touch
Agree? Disagree? Not convinced yet? Get in touch. Let’s talk.
- AR6 Climate Change 2021: The Physical Science Basis, The Intergovernmental Panel on Climate Change (IPCC)
- The future is now: How oil and gas companies can decarbonize, McKinsey January 2020
- Figures 2015, World Energy Outlook 2018, International Energy Agency (IEA)
- Oil and Gas: on the cusp of a digitally fuelled new era, World Economic Forum
- Page 93, World Energy Outlook 2018, International Energy Agency (IEA)
- Accenture, The 2016 Oil and Gas Digital Trends Survey, 2016
- SPE-195278-MS: Application of Machine Learning in Transient Surveillance in a Deep-Water Oil Field
- Production life cycle management case history, Schlumberger
- Permian natural gas flaring and venting reaching all-time high, Rystad Energy press release
- Monetising flared gas … innovative applications of proven technology presentation by Mark Davis, Capterio.
- The Future Need for Petroleum Engineering, Journal Petroleum Technology July 2021