Pressure is mounting on the global oil and gas industry to reduce environmental footprint at the same time as the industry is under significant cost pressure. Since business as usual is not an option, DNV GL has launched two papers to advise the industry on how and where to make impactful changes within financial constraints.

The paper, “A cost-efficient approach to reducing environmental impact” provides a framework for the industry on how to improve environmental sustainability by identifying the most cost-efficient mitigating measures. To demonstrate how the abatement framework can work in practice, DNV GL has also carried out a case study for an offshore asset. The second paper, “CO₂ abatement potential for offshore upstream installations” demonstrates the results of a comprehensive case study on how CO₂ emissions can be reduced through the implementation of a number of cost-effective measures for offshore production on the Norwegian Continental Shelf (NCS).

Elisabeth Tørstad, CEO, DNV GL – Oil & Gas, says, “Cost management is a top priority for the industry right now but it’s still possible to reduce our environmental footprint without breaking budgets. Cost-effective measures can be implemented across the lifecycle of assets and throughout the supply chain. Our papers will advise and support decisions in this critical area. Greater transparency by the industry on environmental risk management processes and sustainability reporting will give the sector much needed credibility and speed up sustainability improvements as a business advantage.”

The framework proposed in “A cost-efficient approach to reducing environmental impact”, is based on internationally recognised guidelines (IPIECA, API and IOGP) for sustainability reporting. It can also be used alongside other sustainability reporting initiatives or company specific sustainability KPIs. Aligned with UN Sustainable Development Goals for the environment, it covers a wide range of indicators, including emissions to air and discharges to sea (i.e. hydrocarbon spills, produced water, etc) for specific offshore assets. It is based on a three-step integrated approach: reporting and accounting of emissions and discharges; impact and risk assessment; and prioritising cost-efficient environmental improvements.

“Our approach allows better informed decisions to be made on how and where to improve the environmental performance of a single or multiple mix of assets,” explains Tørstad. “This will support operators in reporting and communicating with stakeholders, as well as in their efforts for continuous improvements and benchmarking. It will also increase control and opportunities for improving global environmental risk management.”

The pathway study resulting in the paper “CO₂ abatement potential for offshore upstream installations” describes how adopting cost-effective practices could provide a 29% reduction in the current CO₂ emissions from offshore production on the NCS whilst also securing significant cost savings. The results took into account efforts already made to lower emissions such as reduced gas flaring activity.

“Despite the NCS being known as best in class when it comes to combating CO₂ emissions and footprint, the work we have done with the CO₂ abatement reveals that there is still cost effective potential left. The promising and inspiring results are making a profitable case for already available technologies for energy efficiency and storage, and the earlier the measures are implemented for a field production, the greater the cost savings. As around 75% of global oil production in 2040 is projected to come from new fields, it should be possible to reduce CO₂ emissions dramatically on a global scale over the next quarter of a century,” adds Tørstad.

In order to ascertain the status of sustainability efforts across oil and gas producing regions and current field developments, DNV GL has also developed a map based on publicly available databases and literature. The map identifies regions and field developments with the most and least potential for improvement on governance and production efficiency. The results are presented in a traffic light system detailing economic, environmental and social performance criteria of resources and production in regions. The results of the benchmark are dynamic and can be used to identify areas for sustainability improvements as well as enable a wider basis for investments decisions.