8 ways the Oil and Gas Industry is making better use of sustainable technologies
Aramco President and CEO Amin H. Nasser highlighted the need for a much more credible energy transition plan, as he delivered a keynote speech at the Schlumberger Digital Forum today.
During the event, he stressed the importance of achieving a new global consensus on the way forward, and outlined three strategic pillars that should be central to the response.
The pillars are:
a recognition by policymakers and other stakeholders that supplies of ample and affordable conventional energy are still required over the long term;
further reductions in the carbon footprint of conventional energy, and greater efficiency of energy use, with technology enabling both;
new, lower carbon energy, that steadily complements proven conventional sources.
Highlighting the consequences of a flawed transition plan, Mr. Nasser said:
“When you shame oil and gas investors, dismantle oil- and coal-fired power plants, fail to diversify energy supplies (especially gas), oppose LNG receiving terminals, and reject nuclear power, your transition plan had better be right. Instead, as this crisis has shown, the plan was just a chain of sandcastles that waves of reality have washed away. And billions around the world now face the energy access and cost of living consequences that are likely to be severe and prolonged.”
On the importance of greater investment in the oil and gas sector, Mr. Nasser said:
“A fear factor is still causing the critical oil and gas investments in large, long-term projects to shrink. And this situation is not being helped by overly short-term demand factors dominating the debate. Even with strong economic headwinds, global oil demand is still fairly healthy today. But when the global economy recovers, we can expect demand to rebound further, eliminating the little spare oil production capacity out there. And by the time the world wakes up to these blind spots, it may be too late to change course. That is why I am seriously concerned.”
On the need for the world to unite behind a credible new energy transition plan, Mr. Nasser said:
“As the pain of the energy crisis sadly intensifies, people around the world are desperate for help. In my view, the best help that policymakers and every stakeholder can offer is to unite the world around a much more credible new transition plan, driving progress on the three strategic pillars I have outlined this morning… That is how we deliver a more secure and more sustainable energy future.”
Dover Precision Components Innovation Lab Officially Opens
Company Looks Toward the Future with Next-Generation Technologies to Support the Green Energy Transition
Houston, TX (October 6, 2022) – Dover Precision Components, an integrated provider of performance-critical solutions for rotating and reciprocating machinery, today announced its Innovation Lab is officially open. Since the construction of the nearly 12,000-square-foot building was completed in 2020, the lab team has focused on the installation and commissioning of key test rigs for its fluid film bearings and compression products. The Innovation Lab has four independent test bays to allow work on multiple rigs at once with dedicated control rooms to monitor and collect test data and help ensure the safe operation of the equipment.
The lab was built to centralize the company’s test rigs and bring together the research and product development teams. These teams are focused on developing innovative new products and technologies to support a greener future, including the upcoming installation of a hydrogen testing facility for performance materials that are key to enabling the transition to hydrogen. “Dover Precision Components continues to make significant investments in product development and material science which have allowed us to accelerate the speed at which technologies are made available to our customers,” said Michael Corrie, Vice President, Advanced Sealing and Compression at Dover Precision Components. Added Chris Johnson, Vice President, Engineered Bearings, “As the world transitions toward clean energy to reduce carbon emissions, we are positioned to provide solutions that address these challenging application needs.” Waukesha Bearings ® and Cook Compression ® use component- and system-level test rigs to validate designs and analytical methods, evaluate performance and reliability, prove solutions under real machine conditions, and develop next-generation technologies.
About Dover Precision Components
Dover Precision Components delivers performance-critical solutions for rotating and reciprocating machinery across the oil & gas; gas, power generation, marine, industrial, chemical, and general processing markets. Comprising the Waukesha Bearings, Bearings Plus, Inpro/Seal, and Cook Compression brands, our portfolio includes hydrodynamic bearings, active magnetic bearings, system and bearing protection, reciprocating compressor valves, sealing technologies, pistons, rods, and more. Each solution is custom-engineered to provide optimum efficiency, reliability, and productivity, and is backed by comprehensive aftermarket services. Dover Precision Components serves its global customer base through facilities in North America, Europe, Asia, and the Middle East, as well as technical sales representatives around the world. Additional information is available at www.doverprecision.com.
Contact: Robin Vodenlic
Marketing Communications Manager
By Brent Potts, Senior Director, Global Marketing, Oil, Gas, and Energy, SAP
Climate change and technology are affecting almost every industry on a global scale. None more so than the oil and gas sector. The groundswell of pressure toward sustainability is driving the oil and gas industry toward a major transformation.
In fact, many traditional oil and gas companies are evolving to the point where they now consider themselves energy companies, mobility companies, or even retail companies, as they diversify and expand into new areas with innovative business models.
Sustainability and digitalization have become the laser focus of many energy and utilities companies, and these industries are actually leading other sectors when it comes to adopting sustainable practices.
According to a recent survey by SAP and Oxford Economics, energy and utilities executives have made more sustainability-related changes to their operations than those in other industries. More than three-quarters (79%) say sustainability issues are a major concern or top-of-mind at all stages of the manufacturing process, and almost half (47%) have committed to a net zero carbon goal.
Drivers of Sustainable Change in the Oil, Gas, and Energy Sectors
There are several factors influencing sustainability efforts in the oil, gas, and energy industry. Companies are taking various approaches to address growing issues that are permanently impacting the industry. Some of the biggest drivers include:
1. Government regulations, incentives, and subsidies
Increasing government interventions, such as the European Commission’s European Green Deal and the United Nations’ Paris Agreement are pushing oil, gas, and energy companies to look for more circular and sustainable solutions to meet aggressive carbon-neutral targets. These agreements are in addition to various carbon taxes, incentives, and subsidies being offered by different levels of government globally.
Several renewable or alternative energy initiatives currently have government incentives, such as tax credits for the use of solar panels, electric cars, or other alternative-energy options. Some governments may also offer subsidies to businesses or consumers who choose alternative or renewable energy sources. These government incentives and subsidies artificially inflate the demand and lower the cost of these alternatives, but the cost savings may not last.
It will be interesting to see if the demand will remain high once subsidies or incentives are reduced, revealing the true cost of alternative energy sources. As more renewable energy technology is developed and mass-produced, the cost of generating renewable energy goes down, but whether or not it will be enough to offset the government subsidies remains to be seen. Renewable energy costs must go down to the point where people will choose them regardless of subsidies or incentives, because ultimately, the cost will determine if people choose a particular energy source long term.
2. Diversification and changing cost structures
Industry boundaries are blurring as several oil and gas companies extend beyond traditional revenue streams. A barrel of oil is not the central focus of many oil and gas companies anymore.
Now, many are placing a greater focus on customer needs and diversifying to include new revenue streams, such as renewable energy, electrical charging stations, advanced chemicals, biofuels, hydrogen, LNG, autonomous transport-on-demand initiatives, and even expanding retail outlets.
For example, Shell has set an ambitious goal to earn 50% of its revenue from non-fuels by 2025. The company is already the world’s largest mobility retailer, with more retail outlets than McDonald’s, and it sells $6 billion-dollars-worth of convenience retail products every year.
It also plans to ramp up its ‘power-as-a-service’ business model with an entirely new cost structure, which reflects the growing trend toward subscription or use-based business models being adopted by an increasing number of companies worldwide.
Digitalization is what makes diversification possible. Advanced technology is changing he way companies work, creating more opportunities for partner collaboration and opening doors to new options for innovative business models.
For years, the World Economic Forum has said that digitalization is allowing the oil and gas industry to redefine its boundaries. The pandemic has simply accelerated that mandate. For example, companies quickly learned that they needed to be more agile to respond to major disruptions and drastic supply and demand fluctuations when the COVID-19 crisis made demand for oil and gas disappear almost instantly as lockdowns spread across the globe.
Aside from the pandemic, as more business systems and processes move to the cloud, it becomes easier to integrate and streamline operations across entire organizations and beyond. This opens the door for diversification as well as product and service innovation.
The survey shows that energy and utilities companies are more advanced than other respondents in their use of technology, with almost half (49%) using cloud technology versus just 36% for other industries.
4. Changing customer, investor, and employee expectations
Peoples’ shifting expectations are having a huge impact on the oil, gas, and energy industry from multiple angles. Eco-conscious consumers continue to put pressure on companies to focus on sustainable practices and renewable energy sources. There is also mounting pressure from investors for companies to become more sustainable. For example, Harvard University plans to end all investments in fossil fuels and stop funding activities that drive global warming. Oil, gas, and energy companies should take note, as Harvard’s decision will no doubt influence other investors.
In addition to outside pressure from consumers and investors, many companies are also facing growing pressure from within their own workforce. As long-time employees retire, they take their traditional methods and intellectual property with them. They are being replaced with a tech-savvy, eco-conscious generation of employees who question conventional operating methods and may enter heavy-emission industries with the direct goal of promoting sustainability in the industry.
Many employees may focus on making a difference by encouraging and influencing more sustainable and purpose-driven practices within their own organizations. As a result, driving forces for sustainable change are mounting from multiple angles outside of organizations as well as from within the companies themselves.
Take Steps Toward a More Sustainable Future
As decision-makers attempt to move toward more sustainable practices, they should consider not one solution, but many. Here are a few recommendations:
Create a long-term strategy for foundational change that considers sustainability in every process.
Use data to influence decisions on implementing sustainable practices at the design, engineering, and manufacturing stages to track, measure, and reduce emissions at every stage.
Use transport and delivery methods that optimize loads and reduce mileage, emissions, and carbon footprint.
Source materials ethically and in the most sustainable way possible.
Operate assets and equipment in the most energy-efficient manner that is safe for the environment and the workforce.
Oil and Gas Companies Are Diversifying
As oil and gas companies look beyond the barrel and continue to diversify, it creates more complexity within their operations, which presents additional challenges to their sustainability efforts. According to the survey, 50% of energy and utilities executives say increased complexity is an obstacle to meeting their sustainability goals.
Despite this, close to half are still committed to achieving a net zero carbon goal, which is the most of any industry in the survey of 1,000 executives from industries worldwide.
Additionally, thanks to advanced technology, energy and utilities firms have more visibility than other industries into many aspects of manufacturing, including carbon emissions (58% vs. 43%), sustainable sourcing of raw materials (56% vs. 50%), and the complete lifecycle of by-products (49% vs. 42% for other industries).
This level of visibility provides valuable insight for business leaders as they focus on developing and enhancing sustainable practices throughout the oil, gas, and utilities industry today and into the future.
Learn more about balancing the bottom line with the green line in the SAP and Oxford Economics energy and utilities fact sheet, The Sustainable Supply Chain Paradox.
Credit to: Forbes
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IRVING, Texas – ExxonMobil today announced its ambition to achieve net-zero greenhouse gas emissions for operated assets by 2050, backed by a comprehensive approach to develop detailed emission-reduction roadmaps for major facilities and assets.
ExxonMobil announces ambition for net-zero greenhouse gas emissions by 2050
Comprehensive approach centered on detailed Scope 1 and Scope 2 emission-reduction roadmaps for major operated assets
Ambition supported by 2030 emission-reduction plans, including net-zero plans for Permian Basin operations
Company strategy tested for resiliency against a range of net-zero scenarios, including IPCC and IEA
The net-zero ambition is contained in the company’s Advancing Climate Solutions – 2022 Progress Report, formerly known as the Energy & Carbon Summary. The net-zero aspiration applies to Scope 1 and Scope 2 greenhouse gas emissions and builds on ExxonMobil’s 2030 emission-reduction plans, which include net-zero emissions for Permian Basin operations and ongoing investments in lower-emission solutions in which it has extensive experience, including carbon capture and storage, hydrogen and biofuels.
“ExxonMobil is committed to playing a leading role in the energy transition, and Advancing Climate Solutions articulates our deliberate approach to helping society reach a lower-emissions future,” said Darren Woods, chairman and chief executive officer. “We are developing comprehensive roadmaps to reduce greenhouse gas emissions from our operated assets around the world, and where we are not the operator, we are working with our partners to achieve similar emission-reduction results.”
The report provides details of how ExxonMobil’s business strategy is resilient when tested against a range of Paris-aligned net-zero scenarios, including the United Nations Intergovernmental Panel on Climate Change’s 2018 Special Report and the International Energy Agency’s Net Zero by 2050 scenario.
ExxonMobil’s Outlook for Energy, which is based on current policy and technology trends, continues to be the basis for the company’s business plans and investment decisions. In the Advancing Climate Solutions report, the company outlines how its short- and medium-term business plans are adjustable to developments in policy and technology and how it uses signposts and leading indicators to evaluate the need for any changes in future years.
Sound government policies will accelerate the deployment of key technologies at the pace and scale required to support a net-zero future. ExxonMobil continues to support an explicit price on carbon to establish market incentives and encourage investments in lower-emissions technologies.
ExxonMobil is also committed to helping customers reduce their greenhouse emissions by investing in carbon capture and storage, hydrogen and biofuels. Bio-based feed and plastic waste streams provide further opportunities for lowering greenhouse gas emissions.
“As we invest in these important technologies, we will advocate for well-designed, high-impact policies that can accelerate the deployment of market-based, cost-effective solutions,” said Woods. “We believe our strategy is unique among the industry and enables us to succeed across multiple scenarios. We will create shareholder value by adjusting investments between our existing low-cost portfolio and new lower-emission business opportunities to match the pace of the energy transition.”
To help reach net-zero for operated assets by 2050, the company has identified more than 150 potential steps and modifications that can be applied to assets in its upstream, downstream and chemical operations.
Initial actions already underway prioritize energy efficiency measures, methane mitigation, equipment upgrades and the elimination of venting and routine flaring. Further high-impact reduction opportunities include power and steam co-generation and electrification of operations, using renewable or lower-emission power. The company expects to finalize detailed roadmaps that address approximately 90% of operations-related greenhouse gas emissions by the end of this year, and the remainder will be completed in 2023.
Initial steps to achieve net-zero by 2050 are included in the company’s plans to invest more than $15 billion by 2027 on lower-emission initiatives. Policies further accelerating the development and deployment of lower-emission technologies could provide ExxonMobil with additional investment opportunities.
Advancing Climate Solutions – 2022 Progress Report is available online at exxonmobil.com. The report expands on the company’s 2030 greenhouse gas emission-reduction plans, which are consistent with Paris-aligned pathways, the U.S. and European Union’s Global Methane Pledge and the U.S. Methane Emissions Reduction Action Plan. Compared to emission levels in 2016, the time of the Paris Agreement, the 2030 plans include a 20-30% reduction in corporate-wide greenhouse gas intensity, which includes 40-50% reduction in upstream greenhouse gas intensity, 70-80% reduction in corporate-wide methane intensity, and 60-70% reduction in corporate-wide flaring intensity.
The 2030 emission-reduction plans are expected to achieve World Bank Zero Routine Flaring by 2030 and reduce absolute greenhouse gas emissions by an estimated 30% for the company’s upstream business and 20% for the entire corporation. Similarly, absolute flaring and methane emissions are expected to decrease by 60% and 70%, respectively, by 2030.
ExxonMobil has regularly updated emission-reduction plans as technologies and policies have evolved, and will continue to do so. When final data is collected and analyzed, the company expects to report it achieved its 2025 emission-reduction plans as of year-end 2021, including a 15-20% reduction in greenhouse gas intensity for its upstream operations, compared to 2016 levels.
ExxonMobil’s strategy is outlined in Advancing Climate Solutions and leverages its advantages in scale, integration, technology and people to build globally competitive businesses that lead the industry in earnings and cash flow growth across a broad range of future scenarios.
ExxonMobil, one of the largest publicly traded international energy companies, uses technology and innovation to help meet the world’s growing energy needs. ExxonMobil holds an industry-leading inventory of resources, is one of the largest refiners and marketers of petroleum products, and its chemical company is one of the largest in the world. To learn more, visit exxonmobil.com, the Energy Factor and Carbon capture and storage | ExxonMobil.