[Editor's note: A version of this story appears in the June 2021 issue of Oil and Gas Investor magazine.]
They call it “sausage making” for a reason. Forging public policy is an ugly process, inexact, complicated and messy and often defies logic. This is not a process to which scientists and engineers, like those in the oil and gas industry, can easily relate.
Our energy complex, however, is also imperfect—composed of an intricate system of drilling, completion, production, gathering, separation, processing, pipelining, storage, refining, liquefaction, marketing, shipping, generation, transmission and distribution. Each segment has a complex series of laws and regulations requiring compliance. Each segment also is a target of politicians, NGOs and activist groups that initiate protests, permit challenges, lawsuits, legislative and regulatory challenges, shareholder proxies and media attacks.
Each section of the complex is also being scrutinized for its carbon content and carbon intensity. This is driving a thorough review of all the processes along the value chain to identify opportunities to reduce carbon. Many factors need to be considered when assessing these options: cost, availability, technical viability, as well as the impacts to quality, supply chain, regulatory frameworks, and ESG performance and the ability to recover or pass along costs.