Energy Environmentalism through Fossil Fuels
Could working in the fossil fuel industry be the best way to save our planet?
How Can Fossil Fuels Drive Environmentalism???
Burning of fossil fuels (oil, natural gas and coal) accounts for the vast majority of energy generated for human use. Regardless how fast their use declines and is replaced by other energy sources, it is important to minimize the environmental and other impacts due to the burning of fossil fuels during this phase of history where they will continue to be burnt. It can be argued that for the near term, the efforts to reduce the environmental impact per unit of energy generated from fossil fuels may be more materially impactful than any efforts directed at increasing sustainable energy generation through wind, solar, hydro, perhaps with the exception of new nuclear energy.
A Note On Sustainable Energy
Let me be clear before we get any further. I believe that solar, wind, nuclear and other sustainable technologies will be very impactful and important in our future energy consumption. However, the largest problems these energy sources face are those of negative public perception, unfair policy frameworks, low capital spend (from both governments and private entities) and scientific breakthroughs needed in materials engineering, physics and chemistry. These industries are already leveraging emerging technologies wherever possible, and are trying everything they can to eliminate waste in their business models. The late David JC MacKay wrote a fantastic (and free) book on the subject called Sustainable Energy: Without the Hot Air which I highly recommend reading.
By contrast, the fossil fuel industry has historically been both capital intensive and heavily dependent on external commodity pricing (which has generally been high relative to production costs). There haven’t been internal incentives to invest in optimizing processes and eliminating waste through technology; rather when the price of the commodity goes through a downturn, it has been best to sit on money and wait for better economics to return. There is ample opportunity to eliminate wastage in the industry.
Let’s Get Real — By The Numbers
Energy Consumption
The graph below shows the global consumption of energy, by fuel, in common units (million tonnes of oil equivalent, or mtoe). The world consumed 13,276 mtoe in 2017.
By grouping fossil fuels into one group and comparing all fuel types we get this pie chart:
Whoa! We use fossil fuels for over 85% of our energy needs! This next thought experiment should reframe what ‘having an impact’ means to you. Making fossil fuels 10% more efficient (an improvement of 1,135 mtoe) would have the equivalent impact of making the energy renewables industry 2.7X or 270% more efficient. Conversely, making the renewables industry 10% more efficient (an improvement of 42 mtoe) would have the equivalent impact of making fossil fuels only 0.37% more efficient.
Carbon Dioxide (CO2) Emissions
Global CO2 emissions in 2017 were 36.8 GT (gigatons or billion metric tons) according to the Global Carbon Project (GCP). Projecting this over 30 years we get 1,104 GT (assuming it stays constant, just for simplicity of the thought experiment). Making the fossil fuel industry only 10% more efficient would then directly result in a CO2 reduction of 110.4 GT.
Project Drawdown aims to rank and compare all potential efforts to reduce CO2 emissions. In reading their report, I found it strange that the authors didn’t include a solution to track making the fossil fuel industry itself more efficient. These efforts directly translate to reductions in CO2 emissions. If it had been included, the modest 10% reduction above would be its #1 ranked solution. Project Drawdown aims to offset 1050.99 GT overall, so the reduction above would also correspond to roughly 10% of the entire offsets resulting from the 80 solutions combined. See the full summary of Project Drawdown solutions here.
Aiming for a BIG Impact
My point here is that small impacts within the fossil fuels industry can have large global impacts that often will outsize efforts within renewables, hydroelectric and nuclear. Therefore, we must include these solutions in our discussions of our path to a sustainable future.
Let me state clearly this is not an excuse to ignore other solutions. I recommend diving deep into the Project Drawdown book to understand the relative achievable impacts for each solution. We need to push forward with implementing the most effective solutions. This perspective of discriminating between projects of small and large impacts is also explored by David MacKay in the chapter Every Big Helps.
A Shift in Mindset
Energy and environment are global issues and we need to act as a global community. We need to eliminate emotional arguments against any form of energy generation, including those common in fossil fuels against renewables, and those common in environmentalism against fossil fuels. In the end, we need a transparent, measured, objective and fair conversation about our energy future. This conversation must consider all energy solutions on an equal playing field economically, environmentally, technologically and morally.
Truth #1: Improving Fossil Fuels IS Environmentalism
Coal, natural gas, and oil should not be seen as inherently evil, but a problem space to disrupt. Instead of ‘stay away’ we need to think ‘how can we do things better?’ We need smart groups of people working hard to figure out how to minimize turnarounds at refineries, or micro-refine in the supply chain to reduce diluent needs and flaring, or how to capture and make use of carbon emissions to upgrade products in the field. These are real environmentalists, and we need to treat them as such.
Truth #2: Profit IS A Good Driver of Innovation
Being a business with a focus on profit is not a bad thing. Elon Musk showed us through Tesla and SpaceX that to make an impact you first have to find a problem that people will pay to have fixed. Fortunately, one of the best things about leveraging technology intelligently to improve your efficiency is that this by nature will improve your profits! Together the industry can profit its way to lower emissions.
Truth #3: The Brain Drain Is Hurting
Telling someone you work in coal isn’t the best cocktail party opener. It’s understandable that people have been leaving the energy industry for ‘sexier’ jobs in tech in Silicon Valley. This has resulted in a brain drain and lack of innovation in the industry. We need to push for a reversal of this drain, and bring the smartest and most driven minds back to the fossil fuels industry to move it forwards into the next generation.
Now is a key moment where society is waking up to call out consumer app companies like Facebook telling us they are building platforms to make the world a better place. The real impacts that make the world a better place take a lot of work, and may not always be sexy.
Truth #4: We Must Fight Evil in the Fossil Fuel Industry
But wait, haven’t I been insisting the industry isn’t evil? Well no, my message is the industry isn’t inherently evil. But evil does exist in this space and it must be flushed out. Most of this evil comes from protecting profits through unfair and corrupt practices. I have zero compassion for this, and these activities should be ruthlessly exposed and attacked.
- pro-fossil fuel and anti-renewable propaganda
- low transparency with respect to environmental failures
- political lobbying and manipulation
- price fixing and commodity manipulation
- opposition to fair taxation
- subsidies unfairly favouring the fossil fuel industry
I agree with fighting back against the industry on all of these points. To be fair, the environmentalist movement is also using many dirty tactics to fight for their message, but on balance the fossil fuel industry has been unfairly advantaged historically.
Getting Our Hands Dirty
We can all agree there is huge opportunity to make an impact, but what can we do specifically? This next section is not meant to be comprehensive, but rather a brainstorming activity to expose the breadth of opportunity for improvement out there. That is, where is the waste?
Opportunity #1: Unnecessary Flaring
One of the most visually disturbing wastes in the industry is unnecessary flaring of natural gas. In fields with a high gas-to-oil ratio (GOR), you end up with gas as a byproduct of your oil production. Since the field is not designed for gas production, there is generally no storage capacity or pipelines for natural gas. The gas ends up getting flared, which is another way of saying lit on fire. Flaring results in CO2 being directly emitted to the atmosphere.
Global gas flaring in 2016 was estimated at 149 billion cubic meters by the Global Gas Flaring Reduction Partnership (GGFR). This is equal to 957 mboe, or 7.2% of our global energy consumption in 2017.
The most popular modern examples of this in industry are the Permian Basin in Texas and New Mexico and the Bakken Shale Play in North Dakota, Saskatchewan and Manitoba.
If new technologies were created to convert this gas to other fuels or other products in the field, or it was transported to market effectively, or it was left underground, it would not have to be directly flared (or even worse, vented) into the atmosphere.
There is opportunity here.
Opportunity #2: Carbon Capture / Re-Use
Carbon dioxide can be captured during its production. For instance, Carbon Engineering is a company (partially funded by Bill Gates) building technologies to capture CO2 directly from the atmosphere, and using it to synthesize clean transportation fuels that displace crude oil.
There are many industrial uses for CO2 with the current global ‘non-captive’ consumption estimated at 80 million tons per year (Mtpa). CO2 can be used for food processing, preservation and packaging, for water treatment and re-mineralization, as a feedstock for liquid fuels production, for metal working and steel manufacture, in enhanced geothermal systems, in polymer processing, algae cultivation, concrete curing and urea yield boosting and even for beverage carbonation, wine making and coffee decaffeination!
Not all of these technologies have an equal potential to offset CO2. Those with a future potential to offset at least 5 Mtpa:
- CO2 for enhanced oil recovery (EOR);
- CO2 for mineralisation (including carbonate mineralisation / concrete curing / bauxite residue processing);
- CO2 as a feedstock in urea yield boosting;
- CO2 as a working fluid in enhanced geothermal systems
- CO2 as a feedstock in polymer processing;
- CO2 in algae production;
- CO2 for liquid fuels (including renewable methanol / formic acid)
- CO2 in enhanced coal bed methane (ECBM) recovery
For far deeper details see this original report from the Global CCS Institute.
There is opportunity here.
Opportunity #3: Carbon Storage / Sequestration
Even with all of the technologies above, in the short term we will not have industrial uses for all of the carbon dioxide being produced. In this case, the carbon dioxide may be pumped back down underground, and is referred to as carbon storage or sequestration.
This technology is at an early stage and there are serious roadblocks to deploying it with meaningful impact, most notably the economics of pumping CO2 deep underground, and the risks associated with keeping it there.
Check out the Global CCS Institute to learn more.
There is opportunity here.
Opportunity #4: Micro-Upgrading of Oil
Upgrading is the process of taking heavier oils and processing them to create a lighter, intermediate product. This process traditionally happens at large refinery complexes that cost billions of dollars to build. 20 Mbbl/day of oil are processed in the North American market, and 100Mbbl/day globally. The market today cannot reliably track oil quality as it moves from producer to refiner, therefore refineries receive inconsistent quality inputs which results in complex and expensive refinery processes and reduced product outputs.
Micro-upgrading is an emerging approach where the idea is to have much smaller, cheaper facilities closer to the point of production to upgrade the oil ‘in-field’. In this way the technology can be directly suited to the type of oil and a high quality product can be put into the supply chain and arrive at the refineries.
This would result in better pricing for the producer as they could deliver a higher value product, as well as simplified processes for the refiner resulting in increased output and reduced operating costs.
There will be many different specific technological approaches needed to micro-upgrade the various types of oil in the global market. The hope is for a suite of solutions that can completely transform the supply chain and make it more effective at getting the best products to market.
There is opportunity here.
Opportunity #5: The Digital Oilfield
Much of this industry is still run on paper and manual processes. I have personally worked to bring oil industry organizations into the modern digital era. First, deploying software to automate and optimize processes and foster collaboration allows for more efficient operations. Secondly, organizing existing data and collecting new data with sensors and software opens up the potential for:
- reporting and dashboards
- visualizations
- statistics and probability
- modelling
- linear programming / optimization
- machine learning solutions
This approach can result in huge impacts. For instance, proper use of big data can making drilling more efficient, resulting in less wells needed to recover the same amount of hydrocarbons.
See The Challenge with AI for Business for my thoughts on becoming a data driven organization (this applies to any industry). The graphic below from that article shows Oil and Gas, Chemicals and Mining all ranking poorly in certain areas of digitization. They are all highlighted as capital-intensive sectors with potential to digitize physical assets, and as B2B sectors with potential to digitally engage and interact with their customers. Mining (which includes coal) is further highlighted as a labor-intensive sector with the potential to provide digital tools to their workforce.
There is opportunity here.
Conclusion
The intent of writing this piece is to re-frame public thinking and get people inspired about working inside the oil, natural gas and coal industries to make them as clean and efficient as possible during our global energy transition to a sustainable state. I have given just a few examples but there is a massive need for improvement in many more areas not mentioned here.
I am passionate about this, and would greatly appreciate feedback, questions or challenges to any of my points. This is something we can only achieve through conversation, collaboration and real action.
Reports and Resources
- What Can A Technologist Do About Climate Change? by Bret Victor
- A Safe Operating Space for Humanity by Johan Rockström and colleagues
- Sustainable Energy: Without the Hot Air by David JC MacKay
- Vaclav Smil books: Energy: A Beginner’s Guide, Energy Transitions and Energy and Civilization
- Project Drawdown
- Global Carbon Project (GCP)
- US Environmental Protection Agency (EPA)
- US Energy Information Administration (EIA)
- International Energy Agency (IEA) Digitalization and Energy
- Accenture Digital Oilfield Outlook Report
- BP Statistical Review of World Energy
- CapGemini Creating the Integrated Value Chain for Downstream Oil
- Arc Resources Crude Oil Investing in a Carbon Constrained World
- Commentary: Running Fast to Stand Still
- The world’s most valuable resource is no longer oil, but data
