Jun-2022

Achiving decarbonisation targets with innovative digital capabilities

For oil and gas companies to achieve mandated decarbonisation targets, they need to increase the use of data and innovative digital capabilities, including layers of analytics.

Craig Harclerode
AVEVA

Article Summary

Solid operational and carbon data management and self-serve, real-time decision support are foundational to reaching these targets. While each company will have unique environmental, social, governance (ESG) and decarbonisation strategic areas — including but not limited to the dimensions of accelerating traditional energy efficiency efforts, optimising value chains to minimise carbon generation, electrification and associated electrical infrastructure upgrade, grey, blue, or green hydrogen production, and modifying their business strategy — one common enabler is an integrated operational and carbon data management with asset performance management.

Global leaders continue to embrace ever-stricter carbon cutting measures, acknowledging at the COP26 summit in Glasgow that the world must cut emissions by 50% in the next nine years to avert a climate emergency. In response to rising anxieties about climate change, the world has undertaken massive efforts on a number of fronts to decarbonise, including electrification and the increased use of hydrogen to reduce fossil fuel use; by 2050, experts expect renewable power to account for roughly 80% of global demand.

The oil and gas industry must redouble its efforts accordingly to stay relevant. To reach the lofty emissions goals leaders have set to meet social and political mandates, the world will have to rely on a combination of efficiency measures, renewable electricity generation techniques, as well as green fuels like ethanol, hydrogen, renewable diesel, and biofuels. For green fuel producers, adjusting to this shifting regulatory landscape — and the accompanying set of challenges it presents, such as novel, complex systems for carbon accounting — demands innovation, precision, and agility driven by quality operational and carbon data management and layers of analytics, including operational streaming analytics, events, and notifications with integrated AI-based insights. In short, fuel producers must use every tool at their disposal — particularly foundational enabling digital technologies — to solve tomorrow’s problems today.

For decades, operational data and associated operational intelligence has been one of the most potent tools by which companies of all industries have optimised their processes, cut costs, and empowered their workforce. However, as we continue to move from an analogue to a digital world, operational data has arguably become a company’s most important asset, as it underpins all strategic initiatives including operational excellence and digital transformation. The addition of carbon data management as an extension of environmental data management only amplifies this strategic point.

The challenges of the past, in hindsight, seem simple compared to those fuel producers now face; they must now balance many stakeholder expectations, including affordable and flexible energy, profitability, and social responsibility. The oil and gas industry has used operational data and associated self-serve, real-time decision support to drive down production costs and deliver business value. Now, environmental directives have added yet another variable to the equation: Companies must strive to reduce production costs and their carbon footprints across complex value chains, including a growing and complex ecosystem of stakeholders and business partners.

Not all data, however, is equally useful. Not only does a wealth of raw data, devoid of context, structure, or quality rarely pay dividends, but it can create further difficulties for those tasked with its utilisation. If users are too slow to develop and implement sustainable solutions, significant lost opportunity costs will accrue. When unstructured operational data builds up in data lakes and catchall repositories, traditional IT technologies can create more problems than they solve, as businesses must spend more time wrangling data than using it to deliver business value and meet ESG mandates. Often users are either adept at computational data manipulation or subject matter experts (SMEs) within the field to which the data will be applied, but not both.

To produce actionable intelligence, data must be structured and accessible to those who can best use it, particularly subject matter experts (SMEs) who have the knowledge and experience to put data insights into action — a strategy that’s all the more vital, now that fuel producers must prioritise decarbonisation alongside profits.

With self-serve digital tools that are grounded in solid operational and carbon data management with streaming analytics, events, and notifications with AI-infused intelligence at their disposal, as well as a clear strategy for decarbonisation, oil and gas companies can manage and address these competing interests much more easily and effectively.

For the oil and gas industry, which accounts for roughly 9% of global green-house gas (GHGs) emissions, the path to decarbonisation may seem like a difficult one, as the challenges fuel producers face are often unpredictable. With a precise plan of action for decarbonisation, however, companies can be prepared to meet these challenges head-on. This whitepaper will present and consider eight common dimensions of decarbonisation:
- Accelerate traditional energy efficiency efforts
- Optimise value chains — both financial and carbon production
- Integrate carbon accounting across the value chain
- Evolve business strategy to include decarbonisation solutions and services
- Strategically electrify assets and upgrade the electrical infrastructure as possible
- Diversify and optimise electricity sourcing
- Increase hydrogen production including green and blue hydrogen
- Reduce and purify carbon byproducts to increase their use as feedstock or products and use capture and underground storage (CCUS) where possible

While each of these areas is singularly invaluable to the decarbonisation process, when deployed together, they add up to a comprehensive, holistic decarbonisation strategy. To fully implement and realise this strategy, fuel producers must move beyond basic historical operational, environmental, and carbon data use. They must embrace solid operational and carbon data management with intelligent, self-serve real-time decision support.

They should adopt a strategy that prioritises proactive, integrated layers of analytics, including a hybrid cloud architecture with highly secure, on-premises streaming analytics, events, and notifications as part of the operational and carbon data management and an SaaS or multi-tenant cloud for more advanced analytics with bi-directional integration.

A breath of fresh air: The need for new, data-driven decarbonisation strategies
To get the most out of operational data in the new carbon-centric landscape, companies must invest in advanced, self-serve streaming analytic tools to improve efficiency. While increasing operational efficiency provides plenty of traditional benefits — reduced operations costs and hours-worked, better asset maintenance practices, and safer plant environments — rapid decarbonisation requires both scaling back energy consumption and moving to green energy sources, to name a few dimensions.