Our research found many instances where renewable energy technologies are already economic for oil and gas, particularly when competing against expensive diesel- or propane-based power in off-grid applications. For this reason, a host of on-site renewable energy ‘wins’ remain largely untapped by the oil companies. Scaling these up could transform both sectors for the better.
Figure 2: Renewable energy opportunities for oil and gas companies
Solar for remote applications: Small-scale solar photovoltaic (PV) systems have successfully been applied in remote oil and gas operations to power monitoring systems, compressors, pipelines, and pumping stations. Companies including Cenovus, Encana and Suncor have been using solar-powered supervisory (SCADA) control and data acquisition systems across the Canadian prairies for years, and represent the largest market for solar cells in Western Canada. In Wyoming, BP found that replacing glycol dehydrators with solar pumps paid for itself within three months.
Renewable-powered offshore platforms: In 2002, Shell began developing offshore platforms that are fully powered by solar and wind. Today, several platforms are in use in southern North Sea gas plays, reducing operating and capital costs and improving safety.
Geothermal heat and pressure energy recovery: Existing oil and gas wells (both operating and abandoned) connect to deep geothermal resources, meaning that many wells produce highly pressurized waste fluids and gases at temperatures as hot as 200°C. This energy can be economically recovered using existing technology. In the U.S., where there are more than 2 million such wells, the government is actively funding and encouraging pilot projects and mapping the available resource.
Concentrated solar thermal for enhanced oil recovery: Since many of the known heavy-oil reserves around the world have limited access to cost-effective fuel sources and are located in areas with substantial solar resources, Chevron and others are investigating concentrated solar to generate steam for enhanced recovery.
Act 4: Keeping the Spark Alive
Based on our research and dialogue, the Pembina Institute believes that a stronger relationship between renewable energy and oil and gas is in the interest of both sectors and of the global climate. To fan the spark, we recommend three tonics: leadership, renewables literacy and increased collaboration.
In the absence of strong climate policy, the drive for renewable energy efforts in the oil and gas sector has come from internal champions within the oil companies. These champions can be empowered by a corporate renewables target, by a strong internal carbon price, and by a mandate to conduct systematic within-fence renewable energy options assessments for major projects.
Enhance Renewable Energy Literacy
To enhance the likelihood of success, oil and gas project design engineers need state-of-the-art knowledge on renewable energy technology performance and on best practices for integrating these technologies into operations. The sector could spur innovation by bringing engineers and renewable energy technology experts together more regularly, and by launching a technology prize (e.g. X Prize) for successful pilots.
Increase Inter-company Collaboration
In Canada, industry consortia such as the Canadian Oil Sands Innovation Alliance could facilitate moving sector-specific renewable energy research forward, with intellectual support from the renewable energy industry associations and non-governmental sector, and financial support from governments. Internationally, the Society for Petroleum Engineers, and IPIECA (the global oil and gas industry association for environmental and social issues), can play crucial roles in convening technical dialogue and consolidating best practices. There is an opportunity to benchmark across the sector, to build on lessons learned across multiple companies and to develop and adopt sector-wide guidelines for incorporating renewable options assessments in project design.
While many talk about a transition to a low carbon economy, few know how we will get there. Moving renewables from a side show into a core element of the oil and gas business could mark a tipping point, helping Canada compete in the estimated $3 trillion clean energy economy, while simultaneously providing a meaningful avenue for this major sector of our economy to address its social license challenges.
Ths article was originally published on Pembina Institute in March 2013 and was republished with permission.
Lead image: Fossil and renewable via Shutterstock