Oil and gas cos to use renewable energy sources to cut carbon emissions

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Oil and gas companies are starting to utilize renewable energy sources in order to cut carbon emissions associated with operations, according to new research by IHS Markit.

“Energy efficiency efforts and reductions in flaring can only do so much to lower greenhouse gas emissions, so some companies are turning to zero-carbon sources to power their upstream, midstream and downstream operations,” Judson Jacobs, executive director, upstream energy, IHS Markit, said.

There had been fewer than 15 of these renewable energy projects from the early 2000s (when the industry first deployed such technologies) through 2017. IHS Markit now tallies more than 45 announced projects in its Oil and Gas Field-based Renewable Energy database, with 13 announcements made in 2018 and 15 made in 2019.

Projects announced in 2018 and 2019 are expected to avert more than 3 million metric tons of annual carbon dioxide (CO2) emissions combined. By contrast, projects in only one prior year averted as much as 0.3 MMT.

Deployments are occurring in both new developments and existing assets, with solar the most prominent renewable technology, followed by hydropower and wind. These deployments are part of companies’ broader greenhouse gas emissions management strategies that IHS Markit tracks and analyzes.

Field-based renewable installations are demonstrating reliability. Electrification — drawing renewable-generated power direct from the grid, as to offshore platforms in Norway –removes most energy generation equipment entirely, enabling fewer on-site personnel needed to operate it and smaller facility footprints. Additional benefits include reduced maintenance expenses and the elimination of fuel deliveries to site.

Cost relative to traditional energy generation sources, the development of supply chains in remote regions, and energy storage for intermittent renewable sources are all significant factors currently constraining growth.

“North America and Europe, where renewables deployments have been most prolific to date, are still growing,” said Minuri De Silva, research analyst, costs and technology, IHS Markit. “And other conducive regions such as the Middle East, Latin America and Asia are also poised for greater adoption as they address technical and commercial issues. The growth potential is significant.”