The ECN Carbon Tracking and Reporting conference* earlier this year included an informative panel session on decarbonization and net zero challenges in the American oil and gas industry. Panelists Hatem Nasr (SoftServe), Samantha Holroyd (Golden Advisory Services), Tony Beebee (TS Cyanergy) and Jeremy Grzwa (NOV) were shepherded through the discussion by Chairperson Abhi Kohli (Shell). Kohli began with a straw poll of the audience that found that while many attendees were involved in scope 1 and 3 decarbonization, scope 3 issues were, how should we say, out of scope for most. The big issue for the world is supplying an increasing population with energy while staying under the 1.5° C limit of the Paris agreement.
Holroyd observes that the ‘E’ component of ESG, environment, was the main way that its opponents can ‘really attack the oil and gas industry’ hence the current focus on the emissions side of business. In reality this is nothing new. Industry has been ‘tracking, measuring, assessing and managing emissions for years’ but now is the time to be talking publicly. ‘We can no longer keep this information in-house we can no longer self-manage and self-mitigate it’s now time for us to go public with our disclosures’. ‘Very soon the SEC will require this’. ‘Predicting and managing emissions will become part of your core license to operate.’
Nasr drilled down into the technologies that this involves. ‘The biggest culprit here is methane obviously, this is what we’re obsessed with and it is a huge source of concern for both the world and the oil and gas industry’. Measuring and reporting methane is challenging but there has been phenomenal technology development in accurate measurement with satellites that now give metric accuracy of super emitters. The consolidation and management of methane data is work in progress and is not helped by unclear reporting requirements which are ‘very confusing right now’.
Beebee observed that another issue is the feedback of measurement data to operators. ‘There may be a report at the corporate office but it doesn’t get to the person making a decision in the field’. The feedback loop is ‘super important’ in allowing operations to react to events and ‘achieve the efficiency number that the companies have promised’.
Grzwa added that while many were pinning their hopes on future breakthrough technologies, there was a lot being done now in terms of retrofitting existing equipment to run more efficiently, kinetic energy, peak shaving and more automation tools for drillers. Industry needs to invest more in this space and more clarity and from the regulator is needed especially in the area of consistent reporting protocols. Automation vendors are also up against companies that still operate with a ‘guy with a tape measure and a clipboard strapping tanks and sending off an email’.
Nasr agreed that the regulatory situation is very confused. ‘It’s a mess. I don't understand why the government is subcontracting this to everybody’. Frameworks such as MiQ, Veritas and UNCG are creating a lot of confusion. The government really need to step up and invest in the EPA, put a lot more people here to get reporting under control. The second aspect of this is that the IRA should include tax incentives to replace, for instance, the ‘hundreds of thousands if not millions’ of pneumatic valves and also to encourage tank automation upgrades. The government needs to put more incentives on the table. Support and hand-holding from the industry on allocating the $350 billion IRA money is needed.
The discussion ended up on the need for data transparency, not a strong point for oil and gas which does a better job of ‘closely guarding its data even when sharing it could be beneficial’. Holroyd sees data transparency as a core fundamental of stakeholder management. Data needs to be shared with all employees who ‘should be able to quote them just like they quote your daily production or they quote your stock price’.‘Maybe emissions numbers should be up there next to the ticker symbol!’
* This session from the ECN Carbon Tracking and Reporting US Conference 2023 is available on the SoftServe YouTube channel.
The sentiments expressed at the ECN event were largely reprised at the subsequent 2023 AWS Energy Symposium where TS Cyanergy and SoftServe unveiled a data-driven emission tracking solution leveraging Amazon web services. A proof of concept drillers dashboard performs emission measurement and monitoring using real-time data to manage and reduce fuel consumption and greenhouse gas emissions. In parallel, a machine learning model monitors motor performance and predicts failure. The system is still under development and second generation monitoring hardware is to roll out real soon now. The partners envisage a much larger market (15x over oil and gas) for the solution in the shipping industry.
On the AWS side, solution is already productized as the AWS CarbonLake which collects methane and carbon dioxide data, and provides recommendations for optimizing operations, along with auditable data for ESG reporting. The CarbonLake is said to address the issues raised at the ECN conference above, notably the ‘difficulties of ingesting, standardizing, transforming, calculating, tracing, and analyzing carbon and greenhouse gas emissions data’. It employs a ‘nine-step pipeline’ spanning data quality checks, a transformation ledger, greenhouse gas calculator, prebuilt analytics and machine learning tools and a ‘serverless’ web application. The pipeline deploys the whole gamut of AWS technology, Amazon S3, SQS, a DynamoDB GHG emissions factor lookup table, a GraphQL API, SageMaker notebooks, QuickSight dashboards with added AI, Athena queries, and a web app stack that uses AWS AppSync. AWS Amplify provides a ‘serverless, pre-configured management application that includes basic data browsing, data visualization, data uploader, and application configuration’.
Comment: While TS Cyanergy and SoftServe
joined AWS on the CarbonLake presentation at the AWS Energy conference,
the main sponsor of the ECN Carbon Tracking event was … Google Cloud.
Both carbon clouds address reporting that goes well beyond oil and gas
emissions to consider variously the emissions associated with computer
calculations in the cloud and also scopes 1, 2 and 3 resulting from
goods and services transiting the supply chain. For a comparison of
these and Microsoft’s too, read this report on the now defunct Protocol.
Visit the 2023 AWS Energy Symposium here and the ECN Carbon Tracking Conference here. Next year’s ECN event will he held in Houston on March 26-27, 2024.
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