Any discussion about the oil and gas sector’s environmental goals is incomplete without scrutinizing its carbon emissions. With climate change dominating headlines and now the SECs looming mandatory disclosure rules, effective steps to reduce emissions—and report them—have become more critical than ever.
Despite the oil and gas industry’s progress in dealing with climate challenges, activists and policymakers are constantly on the lookout to jump in and enforce rules and policies to regulate the industry’s emissions. This is mainly due to lack of alignment within the sector, said Drew Pomerantz, emissions management technical lead with Schlumberger, speaking during a panel discussion at Hart Energy’s recently held Energy ESG Conference in Dallas.
“I know that the industry is big and diverse and it’s not realistic to expect everybody to agree about everything but our industry—like most other industries—is judged on the performance of the worst of us,” Pomerantz noted.
With increasing dialogue around climate change, he said it’s common for academic institutions and environmental activists to measure methane emissions from oil and gas operations across large areas and point out the “super emitters” of the oil field, easily overlooking the efforts of those operators that are effectively working to lower their carbon emissions.
“This leads people to think that these super emitters are representative of how our industry works and then, most of them say ‘Man! This industry doesn’t have their act together. They are not policing themselves. Let’s go in and do it for them.’”
This is where it gets tricky, Pomerantz added, because a group of people that don’t belong to the oil and gas sector then set rules for the industry to control emissions.
“We have things like regulations that vary by jurisdiction. So, operators in the Texas part of the Permian have to do things under a different set of rules compared to operators in the New Mexico part of the Permian,” he added.
And to top it off, when the industry resists these regulations made by outsider groups and policymakers, oil and gas companies are blamed for “pushing back.”
Even though it’s natural to feel overwhelmed by the increasing scrutiny of the sector, it’s not an effective attitude to lower emissions, he noted.
“To overcome the roadblock, what we really need is an alignment and to understand that we do need to police ourselves on our terms, using our engineers and our technology the way we see fit to get our emissions down to a level where operating with good environmental performance is just something everyone does if they want to be in this business,” he said.
“If we can align that, we can show the world that we can handle this on our own and remove some of the external roadblocks.”
While operators are scrambling to choose the most cost-effective solutions to reduce emissions, Pomerantz added that service companies must play a significant role here to help operators decide the most practical solutions to reduce emissions.
This is because service companies unlike policymakers have the bandwidth to “live and breathe” these technologies, understand the pros and cons of each solution, and also have oilfield experience to decide the practicality of the “right tool” for the emission reduction job, he said.
One size doesn’t fit all
Because of the vast differences in policy, geography and other operating conditions, the challenges and incentives for operators managing emissions vary significantly in different parts of the world, noted Andres Cabada, director of stewardship and sustainability at Halliburton, in the same panel discussion.
“If you are operating offshore in Norway, the set of conditions geologically, juristically and financially are very different than in the Permian Basin. So, the solutions that make sense in one place may not make sense for another,” he said.
It’s also important to note that the policies for financial incentives of reducing emissions are very different across different oil and gas producing regions, Cabada added.
“If you are in a jurisdiction where a certain carbon pricing scheme or carbon taxes will influence economics of a given project, that will impact the perspective of the operator,” he said.
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