Decarbon Daily - Decarbonization Themes Part 3

Part 3 of 5 in this series covers emission avoidance and reduction. Take a look at Part 1 and Part 2 for the previous thoughts on who and what could win in ESG and decarbonization.

Decarbonization Themes, Part 3

There are several emerging themes for decarbonization across industries. Here are the top 5 themes I will be covering in detail.
1. Electrification driving rare earth mineral demand
2. Natural gas becoming energy transition fuel
3. Emission reduction and avoidance comes in all shapes and sizes
4. Investors pushing towards climate + energy technology need scale
5. Global oil demand recovers to pre-pandemic levels in 2022, but slower growth thereafter

Reducing and Avoiding Emissions

It's imperative for companies to reduce and avoid Scope 1 and 2 emissions. Many companies are working with partners to decrease emissions to improve air quality and meet sustainability goals.

Investor pressure coupled with changing policy and public opinion are accelerating the adoption of technology and practices to reduce global emissions.

Source: Kairos Aerospace

Let's take the oil and gas value chain as an example. Oil and gas producers are reducing flaring, monitoring methane, and detecting emissions before an incident occurs. Drilling companies are evaluating battery technology and high-line power instead of diesel fuel. Pressure pumpers are reducing their equipment footprint on the pad site by electrifying the frac spreads. Transportation and logistics companies are electrifying fleets. Midstream operators are using a combination of satellites, UAVs, and cameras to monitor pipeline leaks. Refiners and chemical plants are evaluating carbon capture and storage (CCS) to remove and sequester CO2. And this is just a quick list.

Similar change is happening in mining, shipping, agriculture, and auto manufacturing. The entire energy supply chain is at an inflection point. The companies that stop being defensive and take an offensive approach will be the ESG leaders and darlings of the investor community.

Detecting Emissions

Understanding and measuring emissions for your assets is a critical first step. This establishes a baseline for your company, assets, and team to know "today's state" for emissions.

If you can’t measure it, you can’t improve it. – Peter Drucker

For example, here are just a few detection technology options for energy producers:
- Satellite: non-invasive but only sees large leaks
- Aircrafts: reasonable cost for coverage but frequency is challenge
- Drones/UAV: higher costs with higher resolution for inspection but requires line of sight
- Sensors: regional or point solutions that may be higher cost and requires maintenance
- Cameras: gas imaging cameras are regulatory standard but expensive

Note: There are many vendors in the detection space. Email me to get a short list of options for your team

Creating the Business Case for Emissions

Once you have a baseline understanding, you can begin building a case for implementing different solutions. Awareness of emissions with data will help you justify a strategy and plan of action to take an offensive approach. Avoiding leaks and quickly identifying methane emitters will help producers capture revenue and stay in compliance. Options for flaring and venting are now abundant with better monitoring producers can convert to liquids, transport in unique ways, or use digital offtake techniques.

Reduction opportunities come in a variety of shapes and sizes. Quantifying the emission sources, estimating loss revenue, and determining upfront and overtime costs will help you prioritize the reduction opportunities. Detecting emissions and proactively managing emissions compliance will be a strategic priority for years to come.

Inside this Issue

👩🏼‍🔬 Emerging Climate Technology Framework
🌎 API Climate Action Framework
☁️ EPA GHG Reduction Programs & Strategies
🗺 Our World in Data: CO2 and Greenhouse Gas Emissions