OGCI Invests in a Diverse Set of Technologies Designed to Reduce Emissions

The Oil and Gas Climate Initiative is advancing efforts to develop and commercialize technologies that reduce greenhouse gas emissions in some unexpected areas.

The voluntary organization of 10 major international oil and gas producers has finalized the first three investments of its billion-dollar investment fund, OGCI Climate Investments, to fund three low-emission technology projects.

The projects, the first in a host of planned investments, seek to make more efficient engines, reduce the environmental impacts of cement, and demonstrate the commercial viability of carbon capture and storage at a gas-fired power plant.

“OGCI Climate Investments’ goal is to deliver GHG reductions by investing in pre-commercial technologies and solutions that are both cost-effective and will scale globally,” explained OGCI Climate Investments Chief Executive Officer Pratima Rangarajan.

The group also has the unique ability to deploy the technologies in the operations of its member companies to amplify the scale an impact of its initial investments.

Promising technologies

The investments include US-based cement and concrete production company Solidia Technologies, which has patented a technology that facilitates the production of cement in a way that generates fewer emissions and uses CO2 rather than water to cure concrete.

OGCI says Solidia’s technology has the potential to lower the carbon footprint of concrete by up to 70% and water consumption by up to 80%. The project is also expected to demonstrate how carbon dioxide can be commercially re-used in an environmentally sound way.

In the OGCI report Catalyst for Change, the organization notes that the conversion of captured carbon dioxide into useable products can help reduce greenhouse gas emissions in specific sectors. In fact, the report notes that OGCI is looking to “invest in a range of companies that have developed innovative and commercially viable carbon utilization technologies.”

Another recipient of OGCI funding is Achates Power, a company that is developing high-efficiency opposed-piston engines that have the potential to reduce the greenhouse gas emissions produced by vehicles.  Achates Power plans to use the funds to accelerate the deployment of its technology across the globe alongside a broad consortium of engine makers.

The third project aims to design the world’s first full-scale natural gas power plant with carbon capture and storage, including industrial CO2 sequestration capability. OGCI Climate Investments has acquired the concept for a project in the UK and plans to work with the project team on a commercially viable concept and basic engineering design that can receive government support and attract private sector investors.

The project would also “enable neighboring energy-intensive industries to leverage the carbon dioxide transport and storage network that would be developed. This way, they too would be able to eliminate a large share of carbon dioxide from their operations,” OGCI said it its report.

The project could also advance the UK’s plans to reduce its greenhouse gas emissions to 80% of baseline 1990 levels by 2050.

The driving force behind OGCI

Together, OGCI’s 10 member companies claim to account for more than one-fourth of global oil and gas production. Their efforts demonstrate a commitment by these top producers – which include several national oil companies – to lessen the environmental impact of fossil fuels and collaborate on actions to reduce emissions.

The roster of members includes BP, China National Petroleum Corp., Eni, Pemex, Repsol, Saudi Aramco, Shell, Statoil and Total. An eleventh member, Brazil’s Petrobras, is set to formally join the group soon.

By collaborating thorough OGCI, the producers aim to be a catalyst for across the oil and gas industry and beyond. Since they produce so much of the world’s energy, the report says that makes them “important players in ensuring the supply of reliable and affordable energy, and gives us the opportunity to advance the transition to a low-emissions future.”

US Producers Reveal More Details on Their Methane Oversight Programs

Many top upstream and midstream companies in the US oil and gas sector are making meaningful methane disclosures to address increasing investor concerns about the gas, according to a report by the Environmental Defense Fund.

The EDF report, The Disclosure Divide: Revisiting Rising Risk and Methane Reporting in the U.S. Oil & Gas Industry, found that nine of the top 64 upstream and midstream companies release comprehensive reports on their methane leak detection and repair programs (LDAR), with many of the remaining companies carrying out some form of methane management program.

“Bright spots in the report include Southwestern Energy, which not only has a quantitative target, but is also committed to continuous improvement,” the report found. Noble Energy was also highlighted for releasing extensive details on its LDAR program in the Denver Julesburg Basin, the Appalachian Basin and onshore Texas.

“Noble’s methodology for inspections is conducted with infrared cameras. These efforts are reported as contributing factors to Noble Energy’s 1.62 billion cubic feet (bcf) reduction in methane emissions in 2016,” the report said.

Top performers also included shale-focused US producers Consol Energy, EOG Resources, Hess, Noble Energy, and WPX Energy as well as diversified international players ConocoPhillps and ExxonMobil and North American pipeline giant TransCanada.

To receive the highest distinction, each of the companies had to disclose three key details about its LDAR program, namely: The scope of the program, the frequency of inspections, and the methodology used for methane detection.

EDF noted that LDAR is evolving rapidly with emerging technologies like continuous mon­itors being piloted by Shell and Statoil, drone-based monitors, and predictive analytics.

Methane, a key component of natural gas, is a greenhouse gas 84 times more potent than carbon dioxide that is linked to climate change, according to EDF.

Activist Shareholders Push for Disclosures

The increased disclosures come as the Trump administration is rolling back aggressive methane-reduction regulations written by the Obama administration’s Environmental Protection Agency and Interior Department, measures that were criticized by the oil and gas industry for the complexity and high cost of compliance.

Regardless, the focus on methane emissions is unlikely to abate as a growing number of investors are pressuring oil and gas companies to increase their environmental disclosures. The EDF report found that five of the seven companies that began offering more details on their LDAR practices in 2017 were targets of methane-shareholder resolutions during the past two years.

EDF bloggers Kate Gaumond and Sean Wright note that 390 investors representing more than $22 trillion in assets have signed a letter supporting the Task Force on Climate-Related Financial Disclosures, an organization that advocates for a unified set of recommendations for corporate climate disclosure.

Among those calling for these measures is CalSTRS, California’s second largest public pension fund. “As a long-term global investor, we recognize that methane emissions are one of the most financially significant environmental risks we face,” Brian Rice, portfolio manager at CalSTRS said in a press release.

The push appears to be working. Cimarex Energy started providing more information about its methane management practices after it received methane shareholder resolutions in 2016 and 2017. ExxonMobil has likewise been the target of similar shareholder action and last year unveiled a comprehensive methane emissions reduction program focused on its shale-focused subsidiary XTO Energy (SO Jan. 28’18).

Industry is Leading its Own Efforts

The oil and gas industry has created its own group to address environmental concerns. In December, a host of players joined with the American Petroleum Institute to create a partnership designed to reduce the environmental impact operations across the US (SO Dec.24’17).

The voluntary effort, called the Environmental Partnership, is comprised of 26 producers who have pledged to initially focus on reducing emissions of methane and volatile organic compounds (VOCs) from their operations.

The move is as a step in the right direction, though many environmental advocates would still like to see more.

“EDF looks forward to working with leading companies and other stakeholders to support methane regulations that build from and improve upon federal and state regulatory models and ensure that we are tapping all cost-effective solutions to comprehensively address oil and gas methane emissions,” EDF business director Ben Ratner said in a press release.

RPSEA Outlines Oil & Gas Research Needs for the Next Decade

The nonprofit research Partnership to Secure Energy for America (RPSEAhas unveiled a comprehensive 10-year plan for advancing research into sustainable oil and gas technology that aims to help cement the status of the U.S. as a leading global producer well into the future.

The wish list of research needs addresses a diverse roster of topics that ranges widely from studies on streamlining the development of offshore reservoirs to improving well recovery in shale plays and advancing environmentally sensitive practices.

“No one knows what the energy industry will look like in the next 10 years, but we do know in order to maintain our leadership position, the United States must compete on a global basis, (and) take full advantage of rapidly evolving technology and address the variety of challenges we will face,” RPSEA President Tom Williams said in a press release.

The Research & Development Plan (R&D Plan) is being released at a critical point in the history of the U.S. oil industry.

Fueled by the shale revolution and development of complex deepwater reservoirs, U.S. oil production surged to a 37-year high of 10 million barrels per day in November and output is expected to continue climbing to a fresh all-time record this year, according to the federal Environmental Information Administration.

U.S. oil production hit a 37-year high of 10 million b/d in November 2017. Source: EIA

With output pushing higher and an oil-friendly administration in the White House, the need to focus on sustainable, environmentally conscious development practices is more apparent than ever.

The R&D Plan draws heavily on input from industry stakeholders and RPSEA’s network of subject matter experts, including universities, national laboratories, as well as large and small energy producers and consumers. It also builds on the foundation of RPSEA’s successful program in the past decade working with the industry, academia, and the Department of Energy National Energy Technology Laboratory (NETL).

Onshore Research Needs

Included in the research needs outlined in the R&D Plan are calls for studies into the most effective strategies and technologies for developing unconventional reservoirs, such as the Marcellus Shale in Appalachia, the Bakken Shale in North Dakota and the Eagle Ford Shale in Texas.

The report notes that the average U.S. shale well currently recovers less than 10% for oil production and 15% for gas production, making the enhancement of reservoir recovery an issue of great interest for all stakeholders. It suggests research into better reservoir characterization to improve the well design and wellbore placement to boost recovery.

As shale development increases, the R&D Plan also recommends examining of issues surrounding flowlines, pipelines, and stray gas especially in areas where population growth has occurred on top of old and sometimes abandoned flowlines that were not mapped or identified.

This need was highlighted last year by an incident in Firestone, Colorado. A home in relatively new Front Range neighborhood was destroyed in an explosion linked to an old flowline that was thought to be out of service. The accident led to two deaths and prompted state regulators to call for the inspection of wells and flowlines across the state.

“The domestic unconventional gas resource has dramatically altered the energy picture in the U.S.,” the report said. “As attention turns toward shale gas resources around the world, the technologies developed through this program and applied to the environmentally responsible development of domestic resources will keep U.S. companies and universities in the forefront of global unconventional resource development.”

The R&D Plan also included a call for documenting the impact of shale gas production on regional air and water quality, with proposed projects on environmental baseline monitoring, fugitive methane emissions and fracturing flow back water characterization.

Water management was highlighted as a universal issue, with the cost of recycling being an important factor. Though the report noted that advances are somewhat restricted by regulations, liability, risks, transportation, sourcing, and disposal. It also highlighted a need for research and better technologies to monitor and manage water disposal related to induced seismicity.

Offshore Research Needs

Offshore production research needs were also a subject of significance in the R&D plan. In recent years, several big deepwater developments have come online that pushed the technological boundaries of the industry to new limits and helped to propel production from the federal Gulf of Mexico to a record 1.7 million b/d in November, EIA data show.

Deepwater reservoirs are particularly challenging and costly to develop. They require years of advance planning and pose unique operating challenges and risks.  The R&D plan recommends further research into a variety of issues associated with this output to find ways to streamline the process of bringing new wells online while minimizing environmental impacts.

“The goal of Offshore Program is to develop environmentally sensitive, cost-effective technologies to identify and develop resources in increasingly challenging conditions and ensure that the understanding of the risks associated with deepwater operations keeps pace with the technologies that industry has developed,” the R&D Plan said.

Becoming a Safety Leader

The research model RPSEA has developed includes actively engaging stakeholders across the entire community of energy producers, researchers, technology providers, regulators and environmental groups.

And while the R&D Program was primarily developed to promote the safe delivery of energy resources to U.S. citizens, any discoveries could also be extended to oil and gas production in other countries across the world.

“While the U.S. is currently a leader in terms of the development of oil and gas (in particular, the onshore unconventional shale resources), other nations are beginning to see these resources as an important component of a plan to move toward a lower-carbon, sustainable energy mix,” Williams said.

Exxon Launches Multi-Pronged Approach to Reducing Methane Emissions

ExxonMobil is taking fugitive methane emissions seriously with a program designed to lower the volume of the greenhouse gas that is released from the company’s production and midstream sites across the US.

The program, launched in September, prioritizes actions at US sites operated by the company’s shale-focused subsidiary XTO Energy. The effort includes phasing out high-bleed pneumatic devices, research into new technologies designed to detect and reduce facility emissions, staff training, and a leak detection and repair program.

“We are implementing an enhanced leak detection and repair program across our production and midstream sites to continually reduce methane emissions, and are also evaluating opportunities to upgrade facilities and improve efficiency at both current and future sites,” XTO President Sara Ortwein said in a press release.

The program goes beyond measures required by federal and state laws and represents a substantial move by Exxon — the largest natural gas producer in the US — to set a higher bar for the entire industry.

Plan Details

The multi-pronged approach to reducing methane emissions begins with a focus on the wellhead and associated midstream infrastructure; The leak detection and repair program requirse every XTO division to survey production and midstream sites with optical gas imaging camera technology for leaks. Data collected by these surveys will then analyzed for frequency, trends and patterns with facilities and equipment that are found to be more prone to leaking becoming top repair priorities.

XTO is also starting a three-year plan to phase out the use of 1,250 high-bleed pneumatic devices across its US operations. The valves, which are typically found at older sites, are designed to periodically vent pressure buildup to maintain safety, system integrity and efficient operations. The ones considered ‘high bleed’ vent more often and at higher volume

The practice of addressing the most leak-prone equipment and high-bleed pneumatic devices first suggests that XTO’s program could yield notable improvements early on. That’s because the largest portion of methane emissions appears to come from a small number of sources, in much the same way that a small percentage of older cars is responsible for the largest share of automotive-exhaust pollution, according to a 2014 study published by the University of Texas and the Environmental Defense Fund, with participation from Exxon.

The new program also calls for managing planned events in ways that are designed to reduce the release of methane emissions into the atmosphere. For instance, field personal will now monitor and remain nearby during the manual liquid unloading process at well sites to close off all wellhead vents to the atmosphere. Liquid unloading is a process that involves removing liquid that has collected in equipment tubing and prevents natural gas from flowing up through the well.

In addition, a training effort focused on management approaches to overall fugitive emissions is being launched and will consider topics like pneumatic device integrity, leak detection and repair practices, and the sharing of best practices across the company.

XTO will also continue its practice of using green completions to minimize methane emissions at wells during the completion process by capturing or burning off flowback emissions instead of venting them into the atmosphere. It is also working to minimize the need to burn off or flare this gas by maximizing gas capture via pipeline, although some flaring will still happen at new developments where infrastructure investments are contingent on successful hydrocarbon development.

West Texas and New Mexico

XTO has already begun putting some of these practices to use in prolific fields in West Texas and New Mexico. Last year, the company completed a pilot project in the Midland Basin that tested new low-emission designs that use compressed air instead of natural gas to operate the pneumatic equipment that helps to regulate conditions such as level, flow, pressure and temperature. It said the results demonstrated the feasibility of using similar designs for new and existing central tank batteries to further eliminate methane emissions.

The company is also collaborating with ExxonMobil Upstream Research Company and third-party equipment manufacturers to develop state-of-the-art, low-cost, minimum-emissions equipment that could be used for future developments, particularly in the Delaware Basin. Parent company Exxon is also participating in a methane measurement reconciliation study with the Department of Energy’s National Renewable Energy Laboratory, and supporting research underway at Harvard, the University of Texas Energy Initiative, and Stanford University’s Natural Gas Initiative.

Legal Battles

Exxon’s expanded commitment to the environment comes as the company is facing an environmental legal battle in California. In July 2017, seven coastal communities filed suits in their local Superior Court systems alleging greenhouse gas emissions caused by Exxon and 17 other energy companies contributed to a warming planet, leading to coastal flooding, beach erosion and rising infrastructure costs. New York City followed California’s lead in January by filing its own lawsuit against the oil major and four other fossil fuel companies that seeks billions in damages to fund “climate change resiliency measures that the city needs to implement.”

Exxon’s Vice President of Public and Government Affairs for Suzanne McCarron addressed these global warming concerns in a January post on the company’s Energy Factor blog, saying “We believe the risk of climate change is real and we are committed to being part of the solution. That is why we have invested $8 billion since 2000 on energy efficiency and emissions reduction.”

In the meantime, the effort by these governmental bodies to wring money from the oil supermajor may ultimately be distracting from the bigger, overarching challenge we all face — that of securing energy to power a hungry world while coming up with technological solutions to reduce the risks posed by climate change.

The methane emissions reduction effort represents a step in the right direction for Exxon and serves as the latest indication that momentum to develop more sustainable oilfield practices is building across the industry.

Environmental Concerns Hinder Plans to Increase Development of US Offshore

The Trump administration’s early January announcement that it planned to open up 90 percent of federal waters to offshore oil and gas development was met by much fanfare, but what ultimately winds up on the final leasing block is likely to be far less than what is on the ambitious draft plan.

“By proposing to open up nearly the entire OCS for potential oil and gas exploration, the United States can advance the goal of moving from aspiring for energy independence to attaining energy dominance,” Vincent DeVito, Counselor for Energy Policy at the US Department of the Interior said in a press release announcing the new draft plan.

But barely a week after the announcement, the plan hit the first in a series of snags when Interior Secretary Ryan Zinke announced the removal of Florida from proposed list of planned lease sales following a conversation with Republican Governor Rick Scott.  Since then, legislators from more states along the eastern and western seaboards have lined up to request exemptions citing concerns about the environment and tourism.

Among the states asking to be left off the draft five-year offshore leasing plan are California, Oregon, Washington, New York, New Jersey and South Carolina. (source) So far, only Alaska and Maine have applauded the plan.

Henry McMaster, the Republican governor of South Carolina, told the press “we cannot afford to take a chance with the beauty, the majesty and the economic value and vitality of our wonderful coastline,” the Post and Courier newspaper reported.

The draft National Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2019-2024 proposed the largest number of lease sales in US history. It called for including 47 potential lease sales – 19 sales off the coast of Alaska, 7 in the Pacific Region, 12 in the Gulf of Mexico, and 9 in the Atlantic Region.

If implemented in its draft form, it would bring unprecedented access to US offshore oil and gas resources at a time when the OCS is already a substantial contributor to US production. The US Energy Information Administration reported that the Gulf of Mexico alone was expected to produce a record 1.7 million barrels per day in 2017.

The blowback to this plan highlights a broader public anxiety about the extraction of oil and gas resources that are essential to powering modern life. It creates a complex conundrum for the oil and gas industry; The public wants affordable energy and the economic stimulus generated by oil and gas production, but it balks at the prospect of drilling for these resources in their own back yards.

This atmosphere of concern highlights the need for the oil and gas industry to emphasize the use of ecologically conscious practices wherever possible. Several majors and independent producers are already heeding this call with the adoption of sustainability practices. Among the companies leading the way are BHP, Chevron, Shell, Statoil and Hess  which each release their own annual sustainability reports.

Adopting safe and environmentally conscious practices are an important part of maintaining the industry’s social license to operate. The ongoing kerfuffle over the draft OCS lease plan shows that even the most industry-friendly White House in recent memory cannot ease public anxieties about the potential for accidents and spills in ecologically sensitive areas. Only the industry can do this by demonstrating a good faith effort to promote sustainable practices.

History Can’t Repeat Itself

Memories of the 2010 Deepwater Horizon oil spill still linger on the minds of many coastal residents. The spill was kicked off by a cascading chain of missteps and equipment malfunctions that led to a blowout at the BP-operated Macondo field in the deepwater Gulf of Mexico. The ensuing explosion caused 11 fatalities and set into motion the largest oil spill in US history.

In response to the spill, the Obama administration overhauled the federal agency responsible for overseeing offshore production and implemented a host of new rules aimed at reducing the potential for another accident.

Today, the Trump administration is quietly working to roll back some of those regulations to bring new investment into the US offshore.

In December, the Bureau of Safety and Environmental Enforcement begin moving forward with a proposal to adjust some of these rules as part of a wider Trump administration effort to reduce undue burden on industry. This signal from regulators indicates that the US government is willing to make compromises in exchange for promises of investment and eventual production royalties.

Regardless, the resistance to new offshore exploration by many coastal states highlights the fact that the public mood has not changed and demonstrating concern for the environment remains a prudent business practice. Doing so will help to ensure that areas that are already open to development stay open and states that favor like more exploration, like Alaska, will be able to see more leasing within their borders.

Offshore, oil, gas, drilling

Petroleum Engineers Play an Important Role in Sustainability

Some people balk at the idea that oil and gas has a role to play in a sustainable future, but the reality on the ground suggests otherwise.

“Supplying energy for the world is a monumental task. There continue to be improvements in renewable energy sources; however, reasonable forecasts of growth in renewables suggest fossil fuels will remain the primary source of the world’s energy for decades to come,” Nathan Meehan, president of the Society of Petroleum Engineers, wrote in an article published by SPE in March 2016.

Even with the increasing adoption of renewable energy resources, Meehan notes that fossil fuels still play an important role in meeting today’s energy needs and using them prudently is the best way to make sure that our generation does not compromise the ability of future generations to meet their own needs.

The drive toward renewables is evident in the US where last year nearly half of utility-scale capacity additions on the power grid came from renewable sources like solar and wind, according to the US Energy Information Administration.

But even with the recent gains, renewables only account for a minority of total US power production and their intermittent nature creates the need for energy storage or backup generation that can be brought online quickly – like natural gas fired power plants – to stabilize the grid. The bulk of heavy lifting in the US power generation sector is still done by natural gas (34%), coal (30%) and nuclear (20%), according to EIA data.

This data suggests that fossil fuels will still be needed for decades to come in the power generation sector, and that’s only the tip of the iceberg. A myriad of other industries count on energy and products derived from oil and natural gas.

Considering this, SPE takes seriously the need to extract these resources sustainably.

Though many people may not realize it, there are many things that petroleum engineers can do to help ensure that oil and gas is part of a sustainable energy solution. Meehan says these areas include:

  • Minimizing methane emissions
  • Reducing or eliminating flaring
  • Supporting energy efficiency and conservation
  • Ensuring wellbore integrity
  • Reducing the surface footprint of wells
  • Eliminating spills
  • Optimizing field development and management

SPE offers its members opportunities to train, share knowledge and advance practices to further these goals.

SPE’s efforts supplement work being done by a number of producers, several of which voluntarily release sustainability reports that highlight their unique measures – like Statoil, Shell, and Hess. To learn more about what petroleum engineers can do, visit SPE’s website or read Meehan’s full article on the subject here.

Meet the First Generation of Nigerian Deepwater Oil Engineers

The deepwater Bonga oil field offshore Nigeria is opening up a unique opportunity to train Nigeria’s first generation of deepwater oil engineers.

One of the skilled Nigerian workers that keeps this complex offshore development running is Dare Famuyide, shift supervisor for Shell Nigeria Exploration Production Company (SNEPCo). When the Bonga field first came online, it was a novel project, Famuyide said.  “We were possibly the first deepwater offshore asset in the Gulf of Guinea.”

Shell’s deepwater Bonga production facility uses one of the world’s largest floating, production, storage and offloading (FPSO) vessels in more than 1,000 meters of water offshore Nigeria. It is 300 meters long and as tall as 12-story building with a deck that spans an area the size of three football fields.

In addition to being a significant revenue earner for the Nigerian economy, the Bonga field has also contributed immensely in developing the deepwater skills of the local workforce, while aiding in the Nigerian government’s aspirations to build truly Nigerian companies that can stand on their own.

Today, 95 percent of Bonga’s core offshore staff is Nigerian.

That workforce also include Prince Nwocha, the first engineer in his family and operations supervisor for SNEPCo at Bonga. Nwocha spends nearly six months of the year deployed at the FPSO, a profession that helps him support his family and also opens up opportunities for his son.

“My son, Justin, likes computation, mathematics, playing with things. And I can see that engineering streak coming out in him,” Nwocha said.

To learn more about the Bonga field, view the video above.

Statoil Makes First Solar Investment, Highlights a Growing Trend

Norwegian oil major Statoil has purchased its very first stake in a solar project, agreeing to pay $25 million to acquire 40% of the 162 MW Apodi solar asset in Brazil. The deal is the latest example of a growing trend of major oil and gas companies taking stakes in renewable energy projects.

“The Apodi asset is a sensible first step into the solar industry and can demonstrate how solar can provide Statoil with scale-able and profitable growth opportunities,” Irene Rummelhoff, executive vice president of New Energy Solutions at Statoil, said in a press release.

Statoil agreed to purchase the project stake from Norwegian independent solar power producer Scatec Solar in October. The purchase price also included a 50% share in the project execution company, which will enable Statoil to participate and the building and operation of more Brazilian solar projects in the future.

“The potential for solar energy in Brazil is substantial and together with Statoil we are increasing our ambitions further in this market. We are bringing into the partnership a strong track record as an integrated independent solar power producer, while Statoil has a strong engagement and experience from Brazil through its other energy activities,” said Scatec Solar Chief Executive Officer Raymond Carlsen.

About the Adopi Solar Project

The Apodi solar project is set to provide electricity for about 160,000 households. Construction of Apodi was set to start in October 2017, with completion expected by the end of 2018. The total capital expenditure budget for the development is estimated at $215 million. Funding for the project is comprised of 65% project financing and a 35% equity contribution. Statoil’s portion of the equity share is estimated at $30 million.

The Apodi solar project is in the Quixeré municipality of the state of Ceará in northeast Brazil. It is fully-permitted with a grid connection and has a 20-year power purchase agreement (PPA) awarded in 2015 at an auction organized by the Brazilian government. The PPA had an inflation adjusted offtake price equivalent to $104 per MWh in 2017.

In recent years, Statoil estimates about 3GW of solar projects have been awarded in Brazil in three consecutive utility scale solar auctions. Another 7GW is planned to be awarded by 2024.

Following the transaction, Statoil will hold a 40% share in the project alongside Scatec Solar (40%) and ApodiPar (20%).

Statoil’s Green Energy Ambitions

Though the Apodi project is Statoil’s first solar venture, it is not the company’s first foray into renewable energy. Since 2012, Statoil has amassed a sizable wind portfolio that includes three UK wind farms, one of which is the world’s first floating offshore wind farm, Hywind Scotland. In 2016, the company also purchased a 50% stake in the Arkona offshore wind farm planned in Germany, which is set to come online in 2019.

Statoil’s wind portfolio is capable of providing power to more than 1 million homes.

“As part of Statoil’s strategy to actively complement our oil and gas portfolio with profitable renewable energy sources, we have so far focused on offshore wind where we have a unique competitive advantage building on over 40 years with oil and gas activities, “Rummelhoff said.

More Supermajors are Investing in Renewables

Statoil is just one of several major oil and gas companies that are making moves into the renewables business. In December 2017 alone, several notable investment in the sector were inked by BP, Royal Dutch Shell and Saudi Aramco.

That month, Saudi Aramco Energy Ventures (SAVE) led a financing round that raised $8 million euros (US$9.6 million) for a German company that is commercializing a new technology for the fabrication of silicon wafers for photovoltaics called NexWafe.

Shell Technology Ventures B.V., the corporate venture capital arm of Royal Dutch Shell, was likewise part of a group of investors that invested a combined $9 million in a Series B equity round for SolarNow, a Dutch company that installs off-grid solar energy systems in East Africa.

Meanwhile, BP paid $200 million for a 43% equity stake in Lightsource, the largest solar development company in Europe that is focused on acquiring, developing and managing large-scale solar projects.

Like Statoil, BP’s move is also part of a concerted effort to invest in renewables. BP has an Alternative Energy Business with interests in onshore wind energy across the US capable of generating 2.3GW, and as well as stakes in Brazilian biofuels plants that produce around 800 million liters of ethanol equivalent per year.

Green Energy is Gaining Steam

These deals comes as technological improvements and lower costs are transforming solar into an attractive power source that can compete with traditional sources of energy in important markets. BP’s Statistical Review of World Energy notes that global installed solar generating capacity more than tripled from 2013 to 2016, rising by more than 30% in 2016 alone.

The growing viability of renewable energy sources is evident across the globe, and the appetite for these projects is increasing globally as countries work to meet commitments made during the Paris Agreement in 2015 amid growing concern about climate change.

Now, the building momentum for these installations has even caught the eye of supermajors like Statoil, indicating that an undeniable wave of change is underway in the way the world thinks about energy.

Chevron Uses Recycled Water to Boost Production at Aging California Oil Field

Chevron is using a sophisticated water treatment system to clean up produced wastewater at a Southern California oil field and using that recycled water to boost recovery from a previously idled portion of the field – demonstrating along the way that what’s good for the environment can also be good for a company’s bottom line.

The Optimized Pretreatment and Unique Separation (OPUS) system was installed at the San Ardo oil field by water treatment company Veolia a decade ago and the company continues to oversee it today.  The installation is the first of its kind to use the OPUS system as part of a produced water desalination facility and the cleaned up water is either used in steam flooding operations or safely disposed of on the surface.

San Ardo is one of the most prolific fields in California. It was initially discovered in the late 1940s and has been producing for decades. State data shows that it was pumping 21,400 barrels of oil per day in 2015, earning it the designation of being California’s eighth producing oil field. Output has actually been ticking upward annually since the OPUS system was put into place, with state data showing oil output in 2015 was nearly double production of 11,400 b/d recorded in 2008.

To counter natural production declines, the aging field has been using steam flooding since the 1960s to soften the remaining oil and coax it out of the ground.  During this process, large volumes of water rise to the surface that must later be treated and disposed of. In fact, for every barrel of oil produced in 2015, state data show about 15 barrels of water rose to the surface as well – or an average of 328,000 b/d of water per day.   

A case study by Veolia says, “Historically, a portion of this water had been recycled and softened to provide water for steam generation, with the (rest) going to local EPA class II injection wells for disposal. However, the injection zone capacity is limited and that had constrained full field development.”

That’s where to OPUS system comes in to make up the difference and ease water constraints. OPUS cleans up about 50,000 bb/d of water that using a multiple-treatment process that takes out contaminants and removes 92% of total dissolved solids.

With the treated water clean enough for reuse, the limited capacity of the injection wells becomes is less of a limiting factor in operations. The recycled water that is not used to generate steam is clean enough to meet California’s strict effluent discharge requirements and can be released through shallow wetlands into aquifer recharge basins that replenish water resources.

Veolia says the project goal was to reduce the total dissolved solids (TDS) of the feed water to less than 6,500 parts per million (pps), and the boron to less than 0.64 ppm for discharge, while achieving 75% water recovery across the treatment system and minimizing the volume of produced water. “For steam generation, the project goal was to reduce the feed water hardness to less than 2 ppm total hardness as CaCO3,” the case study said.

The system’s daily operations are overseen by Veolia, and Veolia staff also provides onsite and offsite technical and engineering support to troubleshoot issues as they arise. In short, they are responsible for ensuring that optimal function is maintained at the site.

The team displayed noteworthy ingenuity in 2005 and 2008 when a shortage of hydrochloric acid arose after powerful hurricanes pummeled the US Gulf Coast. OPUS uses hydrochloric acid in the regeneration process of the water softeners that are a part of the system. To get around this issue ad keep operations rolling, Veolia staff came up with a different concentration that lowered the field’s reliance on hydrochloric acid.

Indeed, the OPUS system is demonstrating one of the ways that producers can use technology and ingenuity to make their operations more environmentally responsible. To read the full case study on Veolia’s San Ardo project, click here. https://www.veolianorthamerica.com/en/case-studies/san-ardo-refinery

Southern California Refinery Case Study
PDF – 2.12 MB

 

Top US Oil and Gas Producers Form Collaborative Partnership to Reduce Emissions

A host of oil and natural gas operators have joined together to create a partnership designed to reduce the environmental impact of oil and gas operations across the US. The voluntary effort, called the Environmental Partnership, is comprised of 26 producers who have pledged to initially focus on reducing emissions of methane and volatile organic compounds (VOCs) from their operations.

At the time of its launch in early December, the American Petroleum Institute said the participating companies represent operations in every major US oil and natural gas basin. They include a host of shale-focused independent producers like Southwestern Energy and Chesapeake Energy as well as several larger integrated firms like Chevron, Occidental Petroleum and Shell. The partnership will provide a platform for these producers to collaborate with stakeholders and learn from one another.

“The Environmental Partnership will help America’s natural gas and oil industry share goals, technologies and best practices that will make our environmental stewardship even stronger,” said Mark Berg, executive vice president of corporate and vertically integrated operations at Pioneer Natural Resources.

“We are proactively taking steps to reduce methane emissions to ensure the sustainability of natural gas for generations to come,” added Greg Guidry, executive vice president for Shell’s Unconventionals business.

Focus Areas

The Environmental Partnership’s inaugural initiative will focus on reducing the methane and VOC emissions associated with oil and natural gas production across the US. The initiative is comprised of three separate Environmental Performance programs for participating companies to begin to implement and phase into their operations starting on January 1, 2018.

The three voluntary programs include:

  1. Leak Program for Natural Gas and Oil Production Sources: Calls for participants to implement monitoring and timely repair of fugitive emissions at selected sites using detection methods and technologies such as Method 21 or Optical Gas Imaging cameras.
  2. Program to Replace, Remove or Retrofit High-Bleed Pneumatic Controllers: Involves the replacement, removal or retrofitting of high-bleed pneumatic controllers with low-or zero-emitting devices.
  3. Program for Manual Liquids Unloading for Natural Gas Production Sources: This program asks participants to minimize emissions associated with the removal of liquids at aging wells that can build up and restrict natural gas flow.

The effort comes as the industry is trying to get out ahead of new federal rules that could force them to implement some of the same practices targeted in the partnerships initial programs.

Oil and gas producers narrowly avoided a federal mandate to begin using similar practices at federal and tribal lands when the implementation of a new methane reduction rule by the U.S. Bureau of Land Management (BLM) was delayed and suspended by the Trump administration in early December. The Methane and Waste Prevention Rule that was put on hold was designed to place new limits on the amount of natural gas that can be leaked from oil and gas well sites on these lands.

The BLM rules called for oil and gas producers to use technologies and processes to cut flaring in half at wells on federal and tribal lands. It also called for the periodic inspection of operations for leaks and the replacement of outdated equipment found to be venting large quantities of gas. The requirements also would have restricted venting from storage tanks and required operators to use best practices to limit gas losses when removing liquids from wells.

Some portions of the BLM rule had already gone into effect since it was first published in the Federal Register in November 2016. One aspect that came into effect in January 2017 called for operators to submit a waste minimization plan with their drilling operations. That and other requirements have been suspended while other parts of the rule that would have taken effect in January 2018 have been pushed back until January 2019.

The BLM rule is just one of several emissions restrictions to arise in recent years for the oil and gas industry.  Earlier this year, US lawmakers also voted to block the implementation of a pollution rule by the Environmental Protection Agency (EPA) that is currently facing litigation.

Big shale producing states like Colorado and North Dakota have had more success than the federal government adopting their own unique methane reduction policies in recent years. Colorado was the first state to do so in 2014, when it adopted rules that required operators to routinely inspect for and correct methane leaks and use technology to capture 95% of emissions of VOCs and methane.

The same year, North Dakota also instituted its flaring reduction rules designed to curb the amount of associated natural gas flared by oil wells targeting the Bakken Shale.

The organization of the Environmental Partnership shows that the industry is taking such environmental concerns seriously and is taking steps to work together proactively to find ways to become better stewards of the environment.

“The industry has a long record of implementing technology and practices that have proven to increase efficiency and reduce the environmental footprint of operations,” said Jack Gerard, president and chief executive officer of the American Petroleum Institute. “In establishing the Environmental Partnership, the natural gas and oil industry is working together to promote the most effective programs and opportunities to improve environmental performance throughout our operations.”

Inaugural Environmental Partnership Participants

  • Anadarko
  • Apache
  • BHP
  • BP
  • Chesapeake Energy
  • Cabot Oil and Gas
  • Chevron
  • Cimarex Energy
  • ConocoPhillips
  • CrownQuest
  • Devon Energy
  • Encana
  • EOG Resources
  • Exxon Mobil subsidiary XTO Energy
  • Hess
  • Marathon Oil
  • Murphy Oil
  • Newfield
  • Noble Energy
  • Occidental Petroleum
  • Pioneer Natural Resources
  • Shell
  • Southwestern Energy
  • Statoil
  • Total
  • Western Gas Partners
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