A marriage of convenience or necessity? Research and policy implications for electrifying upstream petroleum production systems with renewables
Introduction
The energy industry's contribution to climate change is apparent and nearly uncontested due to greenhouse gas (GHG) emissions in the form of carbon dioxide (CO2) and other non-CO2 Kyoto gases. As of 2016, the energy industry accounted for over 70% of global GHG emissions [1]. In between, the Intergovernmental Panel on Climate Change (IPCC) observes that the combustion of fossil fuels is the largest source of anthropogenic GHG emissions, discharging over 30 billion tonnes of CO2 into the atmosphere annually [2]. Globally, the oil and gas industry accounts for between 20 and 25% of CH4 emissions [3]. For a clearer and more direct upstream-specific picture about CH4 emissions, recent estimates by the International Energy Agency (IEA) are valuable. The IEA suggests that operations connected to oil, gas, coal, and bioenergy supply account for approximately 100 metric tonnes of anthropogenic CH4 emissions per year [4]. Over half of this estimate is traceable to the oil and gas sector, with an upstream share of about 60% [4]. The preceding statistics point to the necessity of transitioning from carbon-intensive energy sources and practices to low-carbon systems to mitigate climate change and its adverse effects [5], [6], [7]. There is a consensus among scholars that, to address climate change and limit global warming to 1.5℃ above pre-industrial levels, all of humanity would have to facilitate far-reaching, swift and unprecedented rates of transformation, especially in the energy sectors [8], [9]. Apart from the known environmental implications of increasing emissions, recent scientific evidence identifies air pollution as the most significant risk to human health, diminishing life expectancy by two years [10]. This further supports the imperative to eliminate anthropogenic pollution, GHG emissions and other particulate matter that imperil the existence of earthly life forms.
The oil and gas industry’s contribution (and, by extension, the entire fossil fuel industry’s contribution) to climate change is undoubtedly a problem that necessitates energy transition. This stark reality means a bleak picture for the fossil fuel industry [11]. There are multiple permutations and projections regarding peak oil demand and supply, although the temporal dimension to these peak theories and energy transition remains uncertain [12].
Recently, the IEA has suggested that, as part of the critical milestones for achieving net-zero emissions by 2050, there should be no new investments or extension of existing investments in oil, gas, and coal beyond projects already committed to as of 2021 [13]. Then there should be a reduction in the production of coal by 90%, oil by 75%, and gas by 55% and a reduction in their carbon footprints in 2050 [13]. These ambitious goals may not be realised easily. However, oil and gas companies face a logical and moral burden to clarify the implications of the energy transition for their operations and an imperative to decarbonise upstream petroleum production operations [11]. We also note the existence of a rich repository of scholarship on energy efficiency measures and industry-specific strategies to decarbonise upstream petroleum operations and the oil and gas industry in general [11], [14], [15]. For example, energy efficiency improvements can reduce the cost of petroleum production, with a concomitant reduction in the associated GHG emissions from flaring, venting, and fuel combustion for process energy needs [11], [16]. The International Petroleum Industry Environmental Conservation Association (IPIECA) posits that the GHG emissions reduction potential of an energy-efficient design relates to savings from reduced energy input from the use of power, heat, and fuels, which will reduce the overall carbon intensity of operations [17].
Corporate structures within the oil and gas industry have shown a commitment to support climate action and ensure sustainability practices [18], [19]. This shows through different corporate responses and measures such as emissions reduction targets, energy efficiency improvements and further research and development to deploy suitable technological solutions [20], [21]. Another identifiable phenomenon by mainstream international oil companies (IOCs) is to rebrand themselves as ‘integrated energy companies’, clearly ridding themselves of the dominant association with oil and gas and gravitating towards renewables [22]. Specific examples like British Petroleum, Shell, Total and Equinor now incorporate renewable energy investments and assets into their corporate portfolios. While this evolving phenomenon may indicate oil and gas majors’ support for global climate action, its potential to tilt the energy dynamics favouring a completely clean energy transition has not received much attention in the literature. Nevertheless, a notion has recently emerged on how IOCs can go beyond corporate rebranding and environmentalism to champion the energy transition to renewables, drawing on their technical leverage, organizational steering, and essential industry-centric synergies [23].
Equally evolving in the oil and gas industry is the practice of electrifying upstream petroleum operations through renewables to mitigate process emissions. This idea can simply be referred to as ‘field electrification’. For some time, it has gained prominence on the North Sea offshore petroleum exploration and production territories of the United Kingdom Continental Shelf (UKCS), the Norwegian Continental Shelf (NCS) and the Danish Continental Shelf (DCS) [24]. We can also point to some examples. Field electrification was first implemented in Norway in 1996 at the offshore Troll field facilities; and Norway currently electrifies eight domestic petroleum-producing fields, resulting in a cumulative emission reduction of approximately 2.8 metric tonnes of CO2 equivalent per year [25]. This emission reduction is traceable to the replacement of gas- and diesel-fired turbines with renewables for power generation. Swedish petroleum operator, Lundin Energy, has a target to electrify over 90% of its operations using renewables instead of fossil-fired power generation for process energy [25]. Other handy examples include the remote solar-powered onshore petroleum wells in Australia, Saudi Arabia, and Canada, and the use of solar-generated steam for enhanced oil recovery in Oman [25]. We note that field electrification with renewable energy technologies (RETs) is yet to gain widespread industry application, but it is a growing idea among industry experts and regulators as a sustainability strategy. However, its broader implications for the energy transition, and its effect on resource extraction, remain unexplored in the scholarly literature. Our modest effort in this respect is, thus, a valuable addition to scholarship.
In a bid to ensure analytical tractability, it may be desirable to discuss, briefly, upstream petroleum production processes to identify the core aspects that can be, and are being, electrified to reduce GHG emissions. The upstream petroleum sector comprises five principal phases, namely exploration (searching for oil and gas), appraisal (feasibility study of the well/field and commercial viability of production), development planning, recovery of oil and gas, and decommissioning (field abandonment/closure) [26]. In this piece, we have focussed predominantly on the production phase, which captures the extensive extraction or recovery of reservoir resources (usually oil and gas) to the surface after satisfactory testing of the discovery well (first oil), with the primary objective to deliver the resources at required rate/volume and quality [26]. Carbon dioxide, methane and volatile organic compounds (VOCs) from petroleum production-related gas flaring and venting account for vast amounts of GHG emissions in the upstream petroleum production process and contribute immensely to the greenhouse footprint of the oil and gas industry [27]. Masnadi et al. [28] have recently reported that flaring, venting, and fugitive emissions account for approximately 75% of the upstream petroleum sector’s carbon intensity. In the year 2015 alone, flaring contributed to 22% of global upstream emissions [28]. We note that emissions vary between jurisdictions and oilfields, depending on production practices and reservoir qualities. Irrespective of jurisdictional and procedural variations, the upstream petroleum production phase involves certain conventional technical processes (such as crude oil separation, natural gas conditioning, wastewater disposal, routine wellsite visits) and the use of certain equipment (compressor engines, dehydrator, stations, rigging pumps, gas lift valves, separator, and other site facilities) [29]. These processes and equipment are energy-intensive and account for vast emissions of CO2, CH4, N2O and other VOCs because of process energy input (typically combustion/burning of fossil fuels to generate energy) and gas flaring [29]. It is believed that, globally, combustion-related GHG emissions in the offshore upstream petroleum sector result in approximately 200 million tonnes of CO2 annually, equivalent to the total CO2 emissions of Vietnam [30]. Thus, it makes sense to seek logical strategies to reduce such emissions, in addition to industry and policy efforts to mitigate other sources of emissions in the industry. Within this context, operators are electrifying process energy input with renewables to reduce the emissions that are traceable to the combustion of fossil fuels to power production activities, especially offshore.
We note that downstream operations are also carbon-intensive and with mitigation potential [31], but we have not focused on these thematic departures in this paper. Rather, the objective of this piece is to identify and discuss some fundamental implications of the emerging practice of electrifying upstream petroleum production systems with renewable energy sources. This is to frame a research and policy agenda for understanding the dynamics of upstream energy integration and providing preliminary reference points to guide policy decisions and future scholarship. We draw on the socio-technical transition theory and adopt a qualitative approach to energy systems analysis to contextualise the topic within three thematic parallels – energy mix paradox, energy complementarity and smart energy optimisation. Socio-technical transition captures socio-technical and systemic changes along the trajectories for sustainable development [32], [33], [34]. This theoretical prism captures different institutional, corporate, systemic, and societal shifts in response to energy transition or other types of transition. In this paper, the context is concerning energy systems and energy governance. Besides, a qualitative approach to energy systems analysis is not new. It has recently been used for conceptualising and understanding the legal geography for understanding just energy transition in terms of critical minerals development and extraction [35]. Some scholars have also adopted a similar approach to describe multiple scenarios and drivers of the energy transition [36], [37]. The conceptual framework that this paper introduces for understanding upstream energy integration underpins its novelty. Five frames underpin the discussion for optimal energy integration – Process energy needs, Resources and materials sourcing, Embodied energy implications, Scalar deployment costing and Temporal dynamics for transition (the PREST framework). This conceptual perspective comes when energy research needs a rethink, especially on reconceptualising interactions between time and energy [38], [39].
Section snippets
Logical foundation
Given the mainstream prominence of climate change and energy transition debates, it may seem counter-intuitive and paradoxical to advance ideas to further research relating to the fossil fuel industry. However, it is imperative to consider this topic from a pragmatic lens. On this premise, it is necessary to consider the contribution of the fossil fuel industry to the evolution of modern civilisation, beginning from the industrial revolution to the present era, and the prevailing global energy
Socio-technical transition nexus
Socio-technical considerations are essential to the energy transition debate. They consider interactive processes between energy systems and society and how energy technology is embedded in the latter. However, our reference to socio-technical transition here encompasses the numerous socio-technical and systemic changes along the trajectories for sustainable development [32], [33], [34]. Within this broad understanding, corporate petroleum-oriented corporations rightly fall under the umbrella
Thematic parallels
The energy integration concept suggests a shifting industry culture and a commitment to abate process energy and consequently reduce process GHG emissions. This is in addition to other industry-driven initiatives identified in the previous section. It may prove amenable to multiple descriptions, but in this piece, we identify three thematic parallels: energy mix paradox, energy complementarity, and smart energy optimisation. We frame these as hypotheses towards understanding the emerging energy
Introducing the PREST framework
Cognizant of the thematic parallels we identified above and the potential existence of multi-faceted considerations outside our scope, we conceive the need to entrench a framework for ensuring optimal energy integration across petroleum-producing jurisdictions. We lay no claim as absolute authorities for providing optimality in this respect but propose a set of valuable elements. These include Process energy needs, Resources and materials sourcing, Embodied energy implications, Scalar
Conclusions, research, and policy implications
The need to develop effective interventions for climate change mitigation in the energy industry in general – and particularly in the oil and gas industry – is presently critical, especially in an era of a strong global movement against conventional fossil fuels. A look to the North Sea reveals the growing emergence of the upstream energy integration concept – an idea to reduce process energy-related GHG emissions with the deployment of CCS and RETs. This piece identified the ideological
Declaration of Competing Interest
The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.
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