Oil and gas field operations are starting to be fueled by a surprising source: renewable energy, according to new research and analysis from IHS Markit.
“Energy efficiency efforts and flaring reductions can do little to reduce greenhouse gas emissions, so some companies are turning to zero carbon sources to fuel their upstream operations, to midway and downstream, ”said Judson Jacobs, executive director of IHS Markit, upstream energy.
But that’s not the only driving force.
“There is a striking growth rate over the past few years and a dynamic business environment for the supply of renewable energy to oil and gas operations,” Jacobs continued, adding that pressure from stakeholders to reduce emissions is a another factor.
“It is also about the sharp fall in the costs of renewable energies and the increasing knowledge and experience of the industry with these technologies. And there are tangible improvements in operational performance that go along with their use, ”he said.
IHS Market said its research shows renewable field installations are reliable. And electrification – by pulling renewable energy directly from the grid, as with offshore platforms in Norway – eliminates most of the power generation equipment entirely, reducing the on-site staff required to operate it. ” operate and reduce the footprint of facilities. Additional benefits include reduced maintenance expenses and the elimination of fuel deliveries to site.
Rapidly growing market
Although the number of renewable energy projects is small, it has grown rapidly over the past two years. While fewer than 15 such projects had existed since the early 2000s, when the industry began deploying such technologies, until 2017, the IHS Markit database on oilfield-based renewables and gas now has more than 45 projects announced, including 28 in 2018 and 2019.
The combined volume of avoided CO2 emissions from these projects is expected to exceed 3 million metric tons per year (3 MMtpa). In contrast, in just one other year, the projects avoided even 0.3 MMtpa. Deployments are taking place in both new developments and existing assets, with solar being the most important renewable technology, followed by hydropower and wind.
“North America and Europe, where renewable energy deployments have been the most prolific to date, continue to grow,” said Minuri De Silva, IHS Markit research analyst, Costs and Technology. “And other good regions such as the Middle East, Latin America and Asia are also on the verge of further adoption as they address technical and trade issues. The growth potential is significant.
The types of oil and gas companies using renewable energy on the ground have also broadened. International Oil Companies (IOCs) have been at the forefront in this area, but the use has spread to National Oil Companies (NOCs), independent exploration and production companies, and even petroleum service companies.
Getting past the early adoption stage
Although IHS Markit believes the number of renewable energy projects on the ground will continue to accelerate in the years to come, the company says several challenges must be overcome before adoption becomes widespread. The cost relative to traditional sources of energy production, the development of supply chains in remote areas and the storage of energy for intermittent renewables are among the important factors currently holding back growth.
According to Jacobs, the current activity in renewable energy based on oil and gas fields is in the early adoption stage. “This is a dynamic and important trend to follow,” he said.