5 months ago

Climate Action 2012-2013


ENERGY AND POWER intensity in the oil and gas industry. In spite of actions to reduce energy intensity across the supply chain, there are a number of factors increasing energy use. Oil and gas production and oil refining became progressively more energy intensive through the 1990s. This is because it has been increasingly necessary to drill deeper to find and produce oil and gas, to use secondary and enhanced oil and gas recovery techniques, and to exploit heavier oil deposits and older reservoirs. In refining there is a demand to process greater volumes of crude, while also converting most of that crude into end products, and reducing environmental impacts through energy intensive processes such as greater desulphurisation. These enhancements consume more energy. Even with these challenges, energy intensity in both the upstream industry and in refining has fallen significantly since 2007 and is now back to below the level of the late 1990s, thanks to significant investments by the industry in energysaving technologies. CONSUMER EFFICIENCY The industry is also promoting energy-efficient use of its products by end users. Significant savings can be made as, typically, around 18 per cent of energy is consumed in the production of fuels, and the remaining 82 per cent is expended by end use. For example, a 10 per cent improvement in the efficiency of oil use in transport and other end uses would save the equivalent of half of the energy used by the oil and gas industry worldwide. As well as improving efficiencies in their supply chains, oil and gas companies are continually seeking to reduce energy needs through improvements in the quality of their products. Examples include advanced road fuels, motor oils and lubricants that improve vehicle performance. Several companies have developed proprietary additives for gasoline and diesel that help to enhance fuel economy. Some companies also offer specialised energy services such as audits and consulting advice on how to reduce energy use to business and public sector customers, such as schools and hospitals. WELL-TO-WHEELS In the transport sector, the Well-to-Wheels initiative has helped quantify the impact of different fuels and vehicle engines. Developed jointly by the oil industry research body CONCAWE, the European Council for Automotive Research and Development and the European Commission’s Joint Research Centre, Well-to-Wheels calculates the energy use and greenhouse gas emissions associated with different fuels and powertrains, and the associated costs and benefits. “Energy intensity in both the upstream industry and in refining has fallen significantly.” Industry partnerships facilitate the sharing of ideas and promote the awareness of energy efficiency and emissions reduction methods and best practices both within the industry and externally. The industry is also collaborating with governments and other bodies on research and development of more efficient vehicles, as well as developing in-house process technologies for use under licence. For example, many oil companies are helping to develop advanced vehicle technologies and components, such as lightweight plastics and resins, often in partnership with automobile manufacturers. “Many oil companies are helping to develop advanced vehicle technologies and components.” STAKEHOLDER CO-OPERATION Climate change can only be addressed if governments, industry and society work together. The oil and gas industry is working to develop collaborative and innovative solutions to the challenges of supplying energy in a cost effective and environmentally sustainable manner: The Global Gas Flaring Reduction Partnership involves major oil companies and governments working together to reduce gas flaring and venting. 78

ENERGY AND POWER The CO 2 Capture Project (CCP) is a partnership of six major energy companies working to advance CCS. The CCP has undertaken more than 150 projects to increase the science, economics and engineering applications of CCS, in association with government organisations and global research institutes. The US Environmental Protection Agency's Natural Gas STAR, Natural Gas STAR International and Global Methane Initiative are examples of programmes focused on the venting and leakage of natural gas throughout the oil and gas value chain. These programmes bring together countries and companies with the goal of promoting oil and gas industry methane emission reductions through the implementation of proven cost effective technologies and practices. IPIECA INITIATIVES Oil and gas companies have been working together on climate change issues through IPIECA since 1988. Activities include: Developing industry tools to help reduce flaring and venting and improve energy efficiency; Developing GHG management good practices; Publishing guidelines for monitoring, measuring and reporting GHG emissions and emission reduction projects; Proposing sustainable biofuels standards; Sharing knowledge on carbon capture and storage, including through partnerships such as with the Global Carbon Capture and Storage Institute (GCCSI); Engaging with the international policy process under the UN Framework Convention on Climate Change; and Supporting climate science, including engaging with the Intergovernmental Panel on Climate Change (IPCC). WHAT NEXT? The oil and gas industry’s efforts to minimise GHG emissions will continue, while its energy supply portfolio expands to meet the world’s growing energy needs. The dual challenge of energy supply and climate change calls for the development of cost-effective and environmentally viable solutions, through both short and long-term measures. The industry’s investment in technology to access new energy sources, including gas from shale, will provide further sources of lower-carbon fuel. Oil and gas companies will continue to work with governments and civil society to address sustainable energy supply and climate change challenges. Brian Sullivan joined IPIECA as the Executive Director in 2011 from the biofuels industry and following a 23-year career in BP. This included assignments in London, Copenhagen, Budapest, Athens and Johannesburg, and business experience in over 60 countries. During his time with BP he has had varied responsibilities in technical, commercial, financial and leadership roles across the downstream value chain, including crude and products trading, marine fuels, lubricants and alternative energy. IPIECA is the global oil and gas industry association for environmental and social issues. It develops, shares and promotes good practices and knowledge to help the industry improve its environmental and social performance; and is the industry’s principal channel of communication with the United Nations. Through its member-led working groups and executive leadership, IPIECA brings together the collective expertise of oil and gas companies and associations. Its unique position within the industry enables its members to respond effectively to key environmental and social issues. 79