E&P companies today are faced with a number of challenges, from increasing regulatory requirements to emissions penalties and rising production costs. To reduce emissions as well as comply with all HSE standards and maintain production levels profitably, organizations need advanced engineering modeling software tools to enable better decisions about processes throughout the asset life cycle.
Increasing regulatory compliance requirements
The majority of greenhouse gases (GHGs) derive from burning fossil fuels to produce energy. According to the International Energy Agency, the chemical and petrochemical industry accounts for 30% of global industrial energy use and 16% of direct CO2 emissions. More than half of the hydrocarbons used in the industry are for feedstock, which cannot be reduced through energy efficiency measures and create issues for a number of companies around the world.
Emissions controls have increased in scope worldwide over the past decade. The Convention on Climate Change, an international treaty that sets binding obligations on industrialized countries to reduce GHG emissions, has led many developed countries to agree to legally binding limitations or reductions in their emissions. For example, the EU is committed to a 20% reduction in energy consumption and 20% fewer emissions by 2020. In the U.K., climate laws require a reduction in emissions of at least 80% (from the 1990 baseline) by 2050.
Elsewhere, countries such as Russia are working to identify ways to modernize plants to lower energy costs and GHG emissions. China wants to change its ignominious role as the world’s largest producer of carbon emissions. The country is taking significant steps to adopt sustainable energy management policies, as demonstrated by Beijing’s announced plan to ban all coal use by 2020.
As one of the world’s most developed nations, the U.S. has witnessed tremendous industrial growth through the shale gas revolution. However, U.S. GHGs also have increased. According to the U.S. Energy Information Administration, in 2011 86% of GHG emissions were energy-related, and 92% of those energy-related gases were CO2 from the combustion of fossil fuels. Petroleum is the largest fuel source of CO2 emissions from energy consumption in the U.S.
Further afield, the growth in oil and gas production in the Middle East has seen carbon emissions increase in recent decades. The huge demand for energy domestically and internationally has meant that the use of petrochemicals and other environmentally noxious materials has contributed significantly to the deterioration of the region’s air quality and atmospheric conditions. Although the Middle East is not bound to GHG emissions reductions by the Kyoto Protocol, Middle East operators and governments are making commitments to reduce CO2 emissions.
Maintaining, increasing production levels
In addition to understanding compliance requirements, E&P companies also are faced with day-to-day challenges of increasing production and minimizing costs while maintaining safety within their operations. In recent years, as oil and gas fields have become less accessible and their hydrocarbon quality has become more variable, this idea of maintaining or increasing production levels has emerged as a key field development goal.
One of the most pronounced challenges in meeting this goal is managing the complex hydraulics of pipelines used in gathering systems to transport the oil and gas from wells to processing facilities.
As these pipelines grow longer in new fields, deeper in offshore environments or simply older in aging implementations, E&P companies face critical problems for which they need better performance prediction and troubleshooting tools. From a business standpoint, solving these technical challenges is increasingly a priority since the capex involved in constructing and retrofitting gathering systems represents a high proportion of development costs. Of course, possible losses in field profitability due to flow interruptions are even more costly. As the oil and gas industry requires more accurate and comprehensive modeling capabilities for pipeline hydraulics, many are turning to advanced engineering solutions for help.
Enabling better process decisions
It’s likely that the global focus on emissions reductions and regulations will not abate anytime soon. As a result, companies are in need of effective energy management processes that support the sustainability and profitability of an operation. Second to raw materials, energy is the largest expense in most chemical and refining processes. Refineries and petrochemical companies that invest in energy management for emissions reductions and efficiency gain a competitive advantage.
One way to do this is by standardizing an integrated engineering environment. With these software tools companies can model, track and reduce CO2 emissions more effectively from design through operation processes. For example, with the flexible modeling capabilities available today, organizations can look at a variety of design scenarios and investigate project constraints to help determine the physical and economic viability of alternative systems. This feature can be used when designing new plants, redesigning existing plants or simulating and optimizing plant processes. By implementing these software tools to model and manage the operations, companies can achieve emissions reductions of up to 40%.
An integrated engineering software suite gives upstream companies the ability to manage energy to meet compliance requirements while also enabling them to maintain and even increase production with the capability to run simulation for flow through pipelines with variables including pressure drop, flow, pipe materials, heat transfer, flow correlations, altitude change and many more. By using these advanced tools, companies can easily and accurately simulate pipelines from within the integrated engineering environment not only in steady-state operations but also as fields and pipelines age. With access to this type of information, organizations can save millions of dollars in construction and maintenance costs associated with debottlenecking and flow assurance and prevent production losses that could run into the billions of dollars across the life span of the field.
Managing cleaner, more efficient operations
Organizations must be vigilant in finding new ways to lower their costs and maintain production while remaining environmentally conscious and avoiding emissions penalties. With advanced software companies can optimize day-to-day processing activities that will enable process manufacturers to make more informed and profitable decisions on energy-related issues ranging from implementing cost-effective energy management practices to reducing the impact of carbon emissions. These practices will in turn improve plant operational performance today as well as help achieve operational excellence and adapt to the future changes in regulations.
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