The future of oil and gas is net zero – how do producers factor in emissions into their operations performance?

The future of oil and gas is net zero – how do producers factor in emissions into their operations performance?®

Oil executives are becoming proficient at navigating change with widely fluctuating commodity prices, the pandemic and an exodus of industry personnel about to retire. There’s more change to come as we enter 2022 with a focus on methane emissions and a net zero future.

It’s a challenging but exciting time for those in oil and gas looking to envision a new way of operating that’s clean and agile.

What’s ahead for producers navigating the net zero challenge? How can clear direction for oil and gas field operations support the energy transition?

Defining net-zero

The Ivey Business School defines net-zero in simple terms as, “…the practice of a company, sector, or economy neutralizing the further climate impact of all of its GHG emissions beginning in a certain year by reducing all emissions possible and then offsetting residual emissions with removal strategies”. Net-zero is applauded for its ambition by some and generates skepticism in others.

The approach is conceptually aligned with the goal of the Paris Climate Agreement, which aims to limit human-induced temperature rise to ideally no more than 1.5 degrees by reaching a net-zero state by 2050 for global GHG emissions as a whole. Canada’s road to net zero is estimated to cost $2 trillion and will require collaborative action from multiple stakeholders, public and private.

2022 is a critical moment towards net zero

Suncor’s CEO Mark Little was asked in Nov 2021, “Will oil demand go down? I fully believe oil demand will go down,” he said. “Do I think it’s in the next year or two? No, I don’t.”

Companies are thinking long-term about net zero though, with top oil companies including BP, Shell and Total pledging in 2020 their commitment to net zero by 2050. In June 2021, Canada’s largest oil sands producers bound together to establish the Pathways alliance. As more Canadian producers commit to a net zero future, expect 2022 to continue building momentum from commitment to action.

“Customers, employees, and investors are already starting to distinguish the leaders from the laggards. Oil and gas companies that get ahead of the curve could find themselves better positioned for change.” – Mckinsey

Most oil and gas executives will agree there is no single solution to achieving net zero emissions. Many large players are doubling down on carbon capture, use and storage (CCUS), carbon offsets and emerging emissions-reducing technologies to speed up their energy transition.

What needs to change in oil and gas operations to start factoring in emissions?

Track and measure

You can’t fix something unless you know what’s broken. Producers can’t reach net zero (or even know how much emissions they need to cut) unless you first start tracking and monitoring emissions. Ideally, track and measure what’s happening in your full operations including scope 3 emissions. Be sure to include fugitive methane emissions, a key focus area for upstream E&P.

detecting leaks and preventative maintenance oil and gas field operations

Target net zero alongside other corporate goals in the field

First, recognize your goal remains overall performance, not just lowering emissions. Now there’s just more variables to consider. What should field operations tackle first?

Maybe foremen used to prioritize schedules for optimal production as prices rose, or to cut costs as they dropped. Now you need to do all that plus track and reduce emissions. Calculating those kinds of trade offs no longer work in a foreman’s head. You need to equip your operators with technology to guide their priorities.

Net zero by 2050 is an ambitious goal and needs the entire organization on board – from the boardroom down to field operations. But the reality is that most oilfield workers don’t know how they can contribute to this lofty goal and how it fits within other corporate goals of the business.

As producers’ priorities shift to net zero, field operations will need clarity on how to minimize CO2 emissions and make an impact. EZ Ops software can equip field operators to take the right action to make the most impact on your corporate priorities, whether it’s managing compliance, improving production or lowering emissions.

Clearly communicate what needs (or does not need) to be done in the field to gain the most impact. For example, operators will know when not to drive 250km round trip to a shut-in well for just $50/day production value or how they can optimize chemical injection rates to minimize unnecessary trips from vendors.

chemical tank readings fluid levels chemical management

Transparent goals, data and reporting

Not all net zero commitments are equal or standardized. Modern energy leaders like Enbridge are setting interim targets to build trust with investors and offer transparency. Others use targets that only focus on a small minority of life cycle emissions. Regardless, net zero goals should be clear and transparent.

Show you’re making progress and heading in the right direction with timely, accurate data-rich reporting. Even if you just start with regulatory reporting, continue to build transparency and action towards responsibility. It’s progress, not perfection.

Seek out easy wins

It’s going to take many solutions to reach net zero. Seek out easy wins like government carbon credits and rebate programs. And consider quick-to-implement solutions like EZ Ops software that can get you fast results.

Go beyond emissions reduction with EZ Ops oil and gas software

EZ Ops is a comprehensive software that equips oil and gas operations teams to focus on the top priorities for efficient production, while also reducing emissions.

Powered by augmented intelligence and machine learning, EZ Ops empowers frontline oilfield workers to manage several (often competing) priorities at a time – from improving production, reducing operational expenses and managing compliance. The by-product of an enhanced, streamlined frontline means emissions are tracked and are reduced in a number of areas – such as detecting leaks and reducing driving time.

Over 10% of Canada’s producers choose EZ Ops because we help their teams work smarter, achieve optimal production, lower costs and reduce emissions too. See how one producer cut OPEX and lowered emissions within 12 months of using our technology. Or let us show you a demo.

Recommended resources on oil and gas’ transition to net zero:

About the Author

Brandon Ambrose CEO and co-founder of EZ Ops

Brandon Ambrose, CEO & Founder, EZ Ops
Brandon has been in oil field operations for over 15 years and is a serial entrepreneur. He is dedicated to finding efficiency in complex oil and gas operations, which translates into tens of millions of dollars in savings for clients, and certainty of hitting ESG goals.

EZ Ops equips operations teams to focus on top priorities to produce the world’s cleanest, most profitable hydrocarbons. We’ve saved our customers more than $48-million in time and operating costs and reduced carbon dioxide emissions by more than 4,880 tonnes.