Pressure is mounting on the oil and gas industry to clean up its behavior and reduce emissions from operations, known as scope 1 and scope 2 emissions.
Many of Europe’s largest oil companies, including Shell, BP, Eni, Repsol and Total, have imposed their own targets for reducing the carbon intensity of their upstream operations, as they have committed to becoming zero-emission companies. net by 2050 or earlier.
Pressure from investors and shareholders is also increasing, including on the oil industry to reduce so-called Scope 3 emissions, these emissions generated by the use of their products.
Low-carbon energy would be the key to reducing emissions, says Wood Mackenzie, who estimates that about two-thirds of emissions come from energy use – production, processing and liquefaction.
Between 2021 and 2025, the region with the most carbon intensity will be Oceania, mainly due to the large emissions from liquefaction, according to Wood Mackenzie’s emissions benchmarking tool. Africa comes next, also due to the large share of flaring in upstream operations, followed by Asia with high production and liquefaction emissions, and North America, where production and losses of methane represent a large part of the carbon intensity.
There are emission mitigation projects.
“But the technical, logistical and commercial challenges must be overcome”,
Jessica Brewer, Senior Analyst, North Sea Upstream Oil and Gas at WoodMac, note.
Africa, for example, is home to some of the most polluting assets due to a lack of infrastructure to address the gas flaring problem, Wood Mackenzie said last month.
“Reducing emissions and looking at further energy diversification is really inevitable,” WoodMac said in a report.
While investors want evidence of solid efforts to cut emissions, international oil majors should work to solve the problem in Africa, where new liquefied natural gas (LNG) projects are being planned.
The oil industry has come up with ways to reduce emissions from operations, not just in Africa, especially after shareholders and the courts issued a warning, the most blunt to date, over Big Oil’s license to operate .
Oil companies have started to respond to investor concerns about emissions. Some are accelerating the electrification of oil fields with renewable energy sources, others, most in fact, are studying Carbon Capture, Storage and Utilization (CCSU) technologies to remove carbon dioxide during periods of time. operations.
The Norwegian company Equinor, for example, is electrifying its operations, replacing a power supply based on fossil energy, mainly from gas turbines, with renewable energy.
“Electrification in the North Sea is one of the main measures to achieve our climate ambitions for the coming decades,” said the Norwegian energy giant.
The American supermajors Exxon and Chevron, which, unlike European giants do not invest in solar or wind energy, are betting on carbon capture and storage. The same is true of many European oil companies in the hope of reducing their carbon footprint and helping entire industrial clusters to decarbonize.
In the United States, Exxon earlier this year created a new company, ExxonMobil Low Carbon Solutions, to commercialize its portfolio of low-carbon technologies, focusing first on CCS. Chevron is also betting on CCS as an area it would invest in for decades to come.
Biggest oil companies see CCS as one way to help carbon-intensive industries cut emissions, as growing number of companies in various industries commit to net zero operations over the next two to three decades.
Oil majors are already working on several large-scale CCS projects aimed at decarbonizing industrial clusters in parts of Europe.
Even in Canada, home to the oil sands, one of the highest emitting crude resources in the world, top producers have announced a collaborative net zero initiative to achieve net zero emissions from oil sands operations here. 2050. The initiative includes companies that exploit approximately 90 percent of Canada’s oil sands production: Canadian Natural Resources, Cenovus Energy, Imperial, MEG Energy and Suncor Energy.
The initiative is ambitious and “will require significant investment from industry and government to advance research and development of new and emerging technologies,” the group said.
The warning from Canadian groups is valid for all emerging technologies to save the day and reduce emissions from upstream operations – these technologies require a lot of investment, and not just Big Oil.
By Tsvetana Paraskova for OilUSD
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