In response to the United Nations’ climate change programs, every major oil & gas (energy) company has announced big investments to reach sustainability goals in the next 20 years. The related goal on the list of every energy company is the energy transition tied to sustainability and climate change. This report will focus on these dual objectives of sustainability and energy transition strategies.
Each energy company has a slightly different approach to reaching net-zero carbon emissions, the metric for this energy transition. The most common plan elements are:
- New ventures into alternative energy sources
- More sustainable operations
- Direct removal of carbon from the atmosphere
- Carbon credits.
This blog describes these energy transition strategies and outlines how Cisco is working with the industry to help make them a reality.
Alternative Energy Ventures
By now, many oil & gas companies have rebranded as energy companies to reflect their interest in multiple energy sources, beyond hydrocarbons. In addition to the name change, every major energy company has made financial investments in new energy ventures. Solar projects, wind farms, and hydrogen plants are the most prevalent choices for investment by upstream companies. Midstream companies are repurposing pipelines to transport hydrogen, and some have invested in electric transmission lines. Downstream companies are interested in hydrogen production and the retail companies are keen to add EV charging to gas stations.
At a minimum, companies are experimenting with new energy business models. Some companies are being bolder. For example, Shell acquired Ubitricity with the intention of taking a leadership role in the EV charging market.
Sustainable Operations
Energy companies, like many others, have a well-articulated sustainability plan. With a commitment to reduce scope 1 & 2 carbon emissions, they are exploring more energy efficient ways to produce product. They’re also developing new processes with lower greenhouse gas (GHG) emissions.
Carbon Capture and Storage
Many oil & gas processes release high volumes of CO2 and methane into the atmosphere. While there is still work to be done, significant effort has already been made by the industry to reduce these volumes. The most common method of reducing these emissions is to capture them, compress them, and push them deep into underground reservoirs for indefinite storage. Other approaches for storage are being developed but this initial approach has many benefits to the industry and is the most straight forward early solution.
Carbon Credits
The International Energy Agency has identified that in their most aggressive net-zero plan, the world will still need 25% of today’s oil production and 45% of today’s gas production beyond 2050. As a result, the producers of these energy products will need to offset their carbon footprint with carbon credits. Energy companies will purchase carbon reduction credits from companies that have already reduced their carbon footprints. Although this isn’t the most desired solution for the environment, it is necessary to meet the world’s energy needs during the energy transition. In addition to payments for offsets, these energy producers will also need to pay carbon taxes to fund new, alternative energy development and climate mitigation efforts around the world.
How Cisco Can Help
Cisco has a history of using technology to contribute to sustainability initiatives like power efficiencies, supply chain sustainability, environmental monitoring and compliance, and providing data transport for sustainability projects. Cisco’s own sustainability journey is documented here.
Experience in Energy Transition
Over the last decade Cisco has worked with several energy customers to provide secure communication infrastructure for solar deployments, wind farms, and other new energy initiatives. Those experiences are documented in reference architectures and case studies. As the energy transition gains momentum this pool of experience continues to grow. New types of initiatives like EV charging networks, energy storage, and carbon capture and storage are becoming more common.
Here are a few examples of recent customer projects:
Efficient Power Usage
Cisco has deployed several smart building and campus solutions that monitor and optimize power usage and reduce energy consumption and CO2 emissions from buildings. Many of these solutions were first deployed at Cisco to showcase our own sustainability accomplishments and direction. The solutions in this practice are applicable across all industries and several of them can be applied in heavy industry facilities as well:
Sustainable Supply Chain
To influence a sustainable supply chain, Cisco has intentionally changed its approach. We’ve begun shifting 100% of new products to circular design principles, reducing the use of virgin plastic by 20%, and reducing packaging foam use by 75%. Cisco often works with customers to share what they are learning in these initiatives to make similar transitions easier for customers. These initiatives span both enterprise practices and industrial practices:
Digitization – Emission monitoring and control
Energy companies must measure and control multiple emissions metrics to ensure they are meeting their corporate and regulatory goals. Cisco has comprehensive experience in managing communication and data flow from industrial sensors or systems. Cisco partners like Emerson and Honeywell both have specific emissions monitoring solutions that they offer to their customers and Cisco integrates with these solutions.
Summary/Conclusion
As energy companies develop new, sustainable ways of doing business, Cisco can help them accelerate the anticipated benefits. The precision of a digital operation drives out waste. New, sustainable ventures become more effective with the visibility, manageability, and security of a Cisco infrastructure.
Find out more about how Cisco helps Oil & Gas operators with sustainability strategies at:
http://www.cisco.com/go/oilandgas
Cisco Sustainibility for Oil & Gas video
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