In discussions of COVID-19 economic reform policies, any measures focused on the oil and gas industry are often portrayed as being at odds with green stimulus.
Certainly, some proposals for bailout of oil and gas operators would be detrimental to climate action. However, a green stimulus within the oil and gas industry is not necessarily the opposite of conditions.
Targeted public sector investment in oil and gas activities — particularly in the areas of reducing methane emissions, improving energy efficiency, and deploying carbon capture — has led to a significant increase in greenhouse gas emissions and significantly lower costs Can maximize near-term economic benefits.
Oil and gas operations produce substantial amounts of greenhouse gas emissions, even though a significant portion of these emissions are inexpensive to reduce.
In studies of companies' emissions reduction measures, the Boston Consulting Group (BCG) and others have found that up to a third of the oil and gas industry's emissions can be eliminated at a relatively low cost, equivalent to CO2 per tonne Below $ 50.
Typically, up to 20 percent of energy sector emissions can be attributed to oil and gas operations (scope 1 and 2 emissions) according to the benchmark developed by BCG.
According to an internal BCG study, the United States has about 800 million metric tons of CO2-equivalent emissions that are directly detectable in the oil and gas industry.
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The time is now appropriate to invest in those low cost emission mitigation measures. As a result of market impacts from COVID-19, with drilling activity down more than half compared to March numbers and capital investment, unemployment is rising in the oil- and gas-producing sectors.
Much of that impact has been felt by service companies and contractors who are key drivers of industry employment as they work for the industry. Thus, a focus on deploying service companies and contractors to reduce greenhouse gas emissions would double as a direct means of targeting unemployment stemming from the industry.
Between low costs in oil and gas and large-scale greenhouse gas elimination opportunities, investment in three core sectors is likely to achieve the greatest economic impact through maximizing near-term employment: reducing methane emissions ; Promote energy efficiency; And accelerating the deployment of carbon capture, utilization and storage technology.
Reducing methane emissions
There are many opportunities available to reduce methane emissions in the US oil and gas supply chain. Investing in plugging orphan wells and leak detection and repair efforts are two areas where service companies and industry employees can be quickly remodeled to reap the benefits of immediate emission reductions.
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Additionally, the development of public-private partnerships to deploy new techniques and methods to detect methane emissions may help to develop a broader market for methane emission mitigation.
Promote energy efficiency
Although there are substantial low-cost opportunities to improve energy efficiency in the operations of oil and gas industry (especially processing and refining), these are often not realized as many barriers to implementation.
Policy interventions have proved effective in removing these barriers in industrial applications to develop a market for energy efficiency services and generate incentives to adopt energy efficiency. Energy efficiency investment has also been demonstrated to provide a higher multiplier on employment when implemented as economic stimulus measures.
Given the progress in the application of digital technologies to energy system management, investment in oil and gas energy efficiency measures also provide an opportunity to accelerate the adoption of new technology that can secure a competitive advantage for US operators.
Accelerated CCUS deployment
Already a leader in carbon capture, utilization and storage (CCUS) deployment, the United States is set to see rapid expansion in capacity due to the adoption of a higher 45Q tax credit.
Most of this investment is likely to be in applications related to the oil and gas industry, including petrochemicals, ethanol production, refining, and natural gas processing.
Stimulus measures can help accelerate the adoption of projects that are almost "shovel-ready", while investing in shared or common infrastructure to enable widespread CCUS adoption, such as CO2 transmission trunk lines or CO2 storage Testing of wells for.
Investing in these measures could promote greater long-term stability and competitiveness of the US oil and gas industry, as well as greater investment.
As Congress continues to debate future stimulus measures, lawmakers should not ignore the opportunities arising from the oil and gas industry to reduce emissions while maximizing macroeconomic benefits.
While the possibility of an operator's bailout or oil purchase for the Strategic Petroleum Reserve has attracted much attention, relatively small investments focused on methane emissions, energy efficiency, and CCUS can yield material, reducing near-term climate gains and unemployment Can.
They can also help create a more sustainable and resilient US oil and gas industry for the long term.
.JPG)
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