The oil and gas industry is vital to ensuring the world’s energy transition, yet the production and transformation processes represents 15% of the overall industry footprint according to the IEA. It’s also one of the most energy-intensive industrial processes. In recent years, Schneider Electric has embarked on the journey to help decarbonise the energy sector with the help of data, software, efficiency and green electrons. The company’s mission is to help create a more sustainable and efficient energy industry with new sources of clean energy.
There has been a lot of talk in the industry about Green Premium especially since Bill Gates has been more vocal about this topic in recent months. The Green Premium concept does a great job in highlighting cost as the key barrier to adopting cleantech. But the main risk lies in ensuring government and industries can distinguish between technologies and solutions that will never be suitable for mass deployment versus those that can potentially make a significant and immediate impact, once scaled up.
Our belief is that ambitious environmental considerations must be embedded in all processes, products and business decisions. We are committed to facilitating meaningful change. Today, more than 75% of Schneider Electric’s product sales come from Green Premium solutions that offer superior transparency and environmental stewardship, as well as improve resource-efficiency throughout an asset’s lifecycle. This includes the efficient use of energy along with the minimisation of CO2 emissions, water, air, and other natural resources, putting us on the right path to a Net Zero future.
When it comes to the oil and gas sector, we can go further. I believe that Net Zero upstream facilities are the future for the oil and gas industry. It’s something that is already possible today, with the solutions we have now. The first step to that Net Zero future is changing the sector infrastructure and best practices to future-proof them for 20-30 years to come.
Schneider Electric, together with McDermott and io Consulting, released the findings of the ‘Net Zero Upstream Facility’ study in March 2021. It reveals that for a minimal total expenditure ‘Green Premium’ increase of 2%, the solution operational emissions of oil and gas operators could be reduced by a staggering 76%, while embedded carbon (CAPEX emissions) could be dropped by 17%. This can be achieved through a high mix of renewable grid power, SF6-free switchgear, designing out the flare system and the so-called fugitive emissions, encouraging remote operations and increasing staff safety.
The core of the study was the development and evaluation of five alternative concepts to identify the optimal solution for reducing the lifecycle GHG emissions of the reference case facility – an offshore compression platform located 100+ km from shore in a water depth of 100+m. The platform is sized to process a maximum capacity of 650 MMSCFD of gas with no provisions for condensate treatment and removal or produced water treatment and removal. The platform has full utilities and support systems.
The intent was to develop a facility that has minimal carbon intensity. This is achieved using power from the mainland grid, a grid that is partly based on renewable power generation, and the use of equipment and instrumentation that minimises/eliminates potential leaks or venting requirements.
Ten years from now, one positive thing 2021 will be remembered for is how the concept of Net Zero became a mainstream activity that reshaped the economy. The pivotal shift that has made this more sustainable future possible is the rapid acceleration of digital.
Though corporate action has spurred progress in addressing climate change, to date only 23% of Fortune 500 companies have made public climate commitments to meet by 2030. This is surprisingly low given the awareness of the potential consequences of climate change on our planet as well as future generations. As Secretary-General of the U.N. António Guterres pointed out in a speech in September 2019, “the climate emergency is a race we are losing, but it is a race we can win”.
There are many green alternatives available today for the oil and gas industries that reduce costs and more than pay for themselves over their lifespan. As we undergo the energy transition, it’s important to invest in decarbonizing the oil and gas sector as the costs have proven to be marginal in comparison to the benefits.
When you consider that 80% of all carbon emissions are due to energy consumption, and 60% of the way we manage energy is inefficient, the scale of the task of changing the ways we create, manage and use energy to reach Net Zero is significant, but so are the potential benefits. As an industry, we must empower key players to make sustainable energy choices that reduce GHG emissions in a sustainable and affordable way and don’t cost the planet.
This piece was first published in Future Net Zero on April 7, 2021