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Energy Currents
A Blog by Enerdynamics

Can Oil Companies Contribute Toward a Low-Carbon World?

By Christina Nagy-McKenna, Enerdynamics Facilitator

How do you make your carbon footprint smaller when you are a large contributor to greenhouse gas emissions (GHG)? Is it even possible? For the oil and gas industry, this question is taking on new urgency as the global community searches for solutions to curb greenhouse gas emissions and stop global warming.

According to data collected by the US Environmental Protection Agency (EPA), in 2018 the petroleum and natural gas sector was responsible for 10.8 percent of the all U.S. GHG emissions reported to the agency.  As seen below, this sector is the second largest contributor and does not include refineries, which are accounted for separately. 

2018 GHG Emissions

Methane leaks are a problem for the natural gas industry and a strong contributor to GHG. Reducing leaks can take the form of several steps including improved leak detection, updating processing facilities and replacing older equipment. Because methane leaks are not detectable to the naked eye, infrared cameras and lasers are necessary to locate problem areas.  Drone technology is helping the industry expand its detection ability with greater efficiency. BP is using such technology in West Texas.

A natural gas wellhead

     A natural gas wellhead

Flaring and venting of natural gas on a routine or non-routine basis contributes significant release of natural gas into the atmosphere. Flaring is common in instances when there is no natural gas customer base close to the producing region, and the producer is looking to produce oil with natural gas as an inconvenient by-product of production. Poor reliability of equipment leads to non-routine flaring, as can bottlenecks in production regions and a lack of gathering system capacity in newer production regions.  

natural gas flaring

     A natural gas flare in the Bakken oil field in North Dakota

An example is the problems of the Permian Basin according to Rystad Energy. The company recently reported preliminary data analysis that showed flaring and venting of natural gas in the basin was in excess of 750MMcf/d in the third quarter of 2019. On an international scale, the World Bank has created a public-private alliance, the Global Gas Flaring Reduction Partnership, comprising primarily governments and oil companies trying to reduce the flaring of natural gas. The goal of the partnership is to disseminate best practices, conduct research, and mitigate the barriers to global reduction of gas flaring. This is especially important for reduction of GHG emissions because uncombusted natural gas has a Global Warming Potential 28 to 36 times greater than carbon dioxide. 

Strategies for offsetting/reducing emissions

Some emissions will always remain for the oil and gas industry. Offsetting these emissions is possible by investing in natural carbon sinks that reduce GHG proliferation in the atmosphere.  Curbing deforestation and planting new forests is one way to sustain natural carbon sinks. For example, Italian energy company ENI has an active forest conservation program. It has  formed partnerships with the countries of Zambia, Mozambique, Zimbabwe, and Mexico and is looking to expand its program. 

Carbon Capture and Storage (CCS) is another option to reduce the reduction of GHG.  Rather than venting carbon dioxide into the atmosphere, the CO2 is transported to a new location where it is injected deep into the earth and stored underground in depleted oil and gas fields or deep saline aquifer formations. While the oil and gas industry does not produce as much carbon dioxide as other industries, it has transported and used CO2 in Enhanced Oil Recovery projects for years, so it is well positioned to develop CCS projects for use by other industries such as power production. Even as it considers rolling back regulations regarding gas flaring, the current administration is bullish on CCS with the U.S. Energy Department investing tens of millions of dollars in projects to further develop the technology.

Lastly, some oil and gas companies have begun significant investments in various forms of renewable energy. In fact, Business Insider reported that of the top 10 global investors in clean energy in 2019, four were oil companies. Active oil companies investing in renewables include Shell, BP, Total, and Equinor (formerly Statoil).  

Reduction of GHG will be an important issue for the oil and gas industry as more governments focus on the reduction of fossil fuel use by their citizens (see our blog Are Natural Gas Bans the Next Energy Trend? for further discussion on this topic). Oil and gas companies are also feeling pressure from the investment community including discussion of divestment of fossil fuel stocks. The technology to reduce GHG during the production and transportation of oil and gas readily exists. By taking the necessary steps to reduce natural leaks, flaring, and venting, and creating and preserving natural carbon sinks, the industry can shrink its carbon footprint and continue to market natural gas as a cleaner alternative to other fossil fuels. By aiding in the proliferation of CCS projects, it can also take a leadership role to help other industries reduce GHG. And by deploying capital in development of renewables, it can focus the use of fossil fuels for needs that cannot be economically met by cleaner fuels.  

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