The Megatrends Dominating Oil and Gas in 2022

Decarbonization and digitalization will continue to define the oil and gas industry in 2022 as the energy transition gathers momentum. Here are the two megatrends that will define the year.

Digitalization Supports Decarbonization

Following the COP26 climate summit late last year, all of the oil majors have announced plans to reduce their carbon emissions by 2050. But in order to achieve aggressive carbon reduction targets, radical changes in the way that oil and gas companies operate will need to be made.

That’s where digital technologies can play an essential role. Developments such as advanced analytics, Artificial Intelligence and Machine Learning can monitor machines in real time and analyze operational effectiveness, allowing oil and gas operators to identify key opportunities to reduce their carbon footprint, improve asset performance and management and

“When you gain operational efficiency you tend to also reduce carbon emissions,” says Julie Ferland, Vice President, Innovation Excellence, at Shell, speaking on a panel at one of our recent conferences.

One of Shell’s LNG operations in Nigeria, for instance, applied artificial intelligence to real time performance data to identify ways to reduce oil off gas flaring by 70% at the facility. According to Ferland, that initiative reduced emissions by approximately 130,000 tons of CO2 per year with limited capital cost.

Other technologies that are making an impact in oil and gas operations are drones and robots.

French oil giant TOTALEnergies, for instance, is using drones to detect and monitor methane leaks so that it can respond and repair quickly to reduce its overall emissions. Methane is a more potent greenhouse gas than C02. Significantly reducing methane emissions from fossil fuel operations – by approximately 75% according to a report from the IEA – is therefore critical to reaching global Net Zero goals by 2050.

Big Oil Turns into Big Energy as Investment Ramps Up in Alternative Sources of Energy

While the world is still a long way off fueling our economies with alternative sources of energy, the race is on to identify and commercialize renewable and alternative sources. In a report out last year, the International Energy Agency (IEA) called an immediate halt to new oil and gas fields in order to minimize global temperature rises.  According to the report, fossil fuels themselves would have to fall to one-fifth of global energy supply by 2050 from four-fifths today to achieve global temperature targets.

Oil and gas companies are going to be key to this process and many are investing heavily in alternative energy sources. According to Wood Mackenzie,  a global research and consultancy business, investment in renewable energy by Oil and Gas major has more than doubled in the past two years.

The Euro Majors are now projected to spend almost 25% of total investment in renewables such as wind and solar energy. US energy giants are also increasing investment in renewables at approximately 10% of total investment. Solar and wind power are scooping up the biggest share of investment but hydrogen projects are rapidly increasing. Hydrogen is widely seen as a credible long term alternative to fossil fuels.

Interested in learning more?

If you’re tasked with reducing emissions in your operations – or for future greenfield projects, join us at Decarbonizing Oil & Gas, taking place at the Norris Conference Centre, Houston on April 5-6, 2022. Join over 200 of your industry peers as they forge their pathway to Net Zero. Find out more details here: Decarbonizing Oil & Gas (oilandgasiq.com)