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Horizons March 2020

Measuring the carbon footprint of offshore production.

Classification societies can play a significant role in helping offshore with its decarbonisation challenges, says Mark Tipping.

Global attention around carbon emissions is influencing how hydrocarbons are used and produced. This means major operators are looking at how carbon dioxide (CO2) releases can be reduced in offshore production, power generation and directing power to water reinjection. This has been demonstrated by major oil brands such as Equinor (formerly known as Statoil), which has issued plans to cut carbon intensity in half by 2050, and Lundin Petroleum announcing carbon neutral targets and a name change to remove the ‘petroleum’ reference to reflect the industry’s energy transition. In line with this, earlier this year BP also set out its ambition to become a ‘net zero company’ by 2050 or sooner. When launching its ‘Energy Transitions’ report in January 2020, the International Energy Agency (IEA) emphasised that all stakeholders must play a significant role in the offshore industry’s decarbonisation journey.

Societal pressure is driving many of these initiatives with hydrocarbons producers seen by some as a leading source of increasing CO2 emissions. According to the IEA, 2018 saw the highest levels of CO2 introduced into the atmosphere for three million years, which remained the same in 2019. Quantifying the carbon impact of hydrocarbon production itself is essential if the impact is to be meaningfully measured across the supply chain. To better understand the landscape, this should be compared with emerging technologies that also have carbon footprints. The hydrocarbons industries and the offshore sector are not solely responsible for CO2 emissions – the focus of this article – or the other greenhouse gases, but it is within their power to publish how much they are producing in what stages of the project life cycle and to state the measures they can take at each of these stages to eliminate, reduce or mitigate the impact of CO2 emissions.

How hydrocarbons are produced has a direct impact on the total carbon footprint of the produced fuel, which can be significantly higher from less efficient facilities or unprocessed hydrocarbons already containing a high percentage of CO2 in their constituent mix. ‘Energy transition’ and the hydrocarbons industry have attracted criticism of “cleaning house” or “greenwashing” in the past, which points to the need for critical third-party assessment.

With floating production storage and offloading units (FPSOs) and floating storage regasification units (FSRUs), classification societies are engaged at every stage of the unit’s life. As such, they can offer a unique perspective of the project from cradle to grave, as well as present a factual picture to the public that is independent from the hydrocarbon industry. Therefore, operators can work with class societies to help demonstrate that they understand impact and, more importantly, outline the measures being taken as the industry moves towards a net-zero carbon future.

Project stages: what needs to be measured?

The offshore industry has several constituent parts that make up its carbon footprint and each of these elements need to be understood by governments and the public, for the lifetime carbon footprint to be truly meaningful. This may seem an obvious statement, but it needs to be applied to the larger climate change discussion, as cherry picking can occur with focus on positive characteristics of one technology that ignores its less favourable characteristics.

The offshore industry can avoid cherry picking by taking a considered approach to its activities. IPIECA provides guidance on how to report carbon emissions. The not-for-profit organisation is run by the hydrocarbons industry, having been set up at the request of the United Nations (UN) in 1974. IPIECA incorporates the UN sustainability and carbon reduction goals into its documents, but it does not provide the detailed guidance required at a project level for carbon management. In most cases, operators need to look closely at the unique aspects of each project. These can be broken down into generic elements:

  • Construction: the construction phase of any project is carbon intensive from the energy used for fabrication, materials used in construction, transport, office and hotel requirements etc. While comprehensive and complex, it is possible to make meaningful estimates of the carbon footprint at this stage.
  • Operation: the operation phase is often the longest stage of any project, which can usually be measured in decades. While reasonable estimates can be made in terms of energy required for production, the requirements associated with operation and maintenance are more challenging.
  • Decommissioning: while rarely at the forefront of project thinking, the legacy carbon footprint for disposal can also be estimated.
  • Impact of the produced product: how is the product used? This is simple for gas when combusted as gas, yet it is more complex for oil where the carbon might be contained within a plastic or pharmaceutical, for example, rather than a fuel.

The offshore industry can learn from other industries on emissions measurement. The automotive industry, for example, is endeavouring to measure its impact and compare competing technologies, including internal combustion engines and lithium-ion batteries. It is important that the offshore industry demonstrates, in a clear and constructive manner, its impact across the project life cycles and how it is managing its impact, negating it or mitigating it.

What’s available now?

Measuring our impact should be considered from the perspective of societal engagement, as well as through-life cross-industry engineering understanding. This is vital if meaningful outcomes are to be seen from the range of measures being taken to minimise the impact of production, and ultimately in the responsible use of the produced product. The next step is to consider what is available to minimise the impact and move society closer to the prospect of having a net-zero carbon future. While the following is not exhaustive and should only be taken as an indication of current initiatives, it does indicate what is being done now in mature regions for operation:

  • Carbon sequestration: this is process of capturing and storing atmospheric carbon dioxide. It has perhaps been the most discussed technology over the past 20 years in the hydrocarbons industry, with a continuously developing and expanding knowledge base. There are several technologies in this area and their deployment is dependent on the local geology. Notable examples include the Sleipner gas field, operating since 1998 in the Norwegian North Sea, and Chevron’s onshore Gorgon plant in Western Australia, which is using sequestration technology to reduce the project operational CO2 impact by 40% (according to the company’s website). The challenge is the high required capital expenditure (CAPEX) and ongoing operating expenditure (OPEX) associated with achieving this. However, as carbon emissions become ever more constrained, the adoption of this technology becomes more likely.
  • Shore-based power: tie-backs to shore-based power are being deployed for offshore projects in the North Sea. While this does not directly reduce a CO2 production footprint, it does leverage power generation at scale and opens the door to purchasing power from renewable sources as they become more available and competitive. It can also reduce project CAPEX and OPEX in the form of negating the need for onboard primary power supplies.
  • Wind turbines/technologies: wind turbines in the North Sea are becoming an attractive proposition when linked with emerging battery technologies – not necessarily for essential power, but certainly for supporting functions. Wave-generated power also has potential, but is not as well developed as wind turbine technologies.
  • Mitigation approaches: these are being commonly adopted, such as reforestation, and available at corporate levels and for individuals.

What role do classification societies play?

If the industry is to measure the carbon footprint of offshore production, thirdparty organisations such as classification societies can help present a factual and trusted picture to governments and the public as they are independent from the hydrocarbons industry. LR has always been at the forefront of supporting measures that improve safety and the protection of the environment. The energy transition is no different, but in doing so it is important to help the offshore industry demonstrate that it understands its impact and can explain the measures it is taking as the global industrial network moves towards a net zero carbon culture.

It is also worth noting that the various asset lifecycle stages are unlikely to be equal in impact. For example, the design stage will be relatively low compared with the construction and operation phases. The potential exists to measure each unit’s carbon footprints from the impact of the design, its construction, elements of operation and final disposal through the following interactions:

  • Design: is the design energy efficient and leveraging renewable resources? How are the field characteristics, such as CO2, hydrogen sulphide (H2S) and mercury, managed and mitigated? Is the design efficient with respect to construction and materials use? How many stakeholders are involved in the design process? What is the carbon footprint of the offices used?
  • Construction: this tends to be heavily energy dependent. How is the carbon footprint of the energy used managed? How does the workforce and their commute to work impact the project? How is the carbon footprint of the supply chain – the biggest impact – managed and measured, including equipment transport?
  • Operation of marine systems: this raises various issues. What, for example, is the facility’s carbon footprint simply to exist in terms of energy, along with support staff and maintenance activities required for operation?
  • Disposal: this should not simply be about the energy required to dismantle the facility, but also about how the hazardous materials are handled and disposed.

Traditional classification scope can leave some gaps; however, larger classifications societies have sister businesses with industrial divisions capable of addressing:

  • Operation: the impact of process systems that sit behind the facility’s purpose. This will change with time as field characteristics change and equipment is upgraded. Yet these can be measured from energy used and material resources consumed. Such monitoring could even fall within the scope of mandatory verification schemes.
  • Use of hydrocarbon products: this is a challenge as it falls outside the ability of the operator in terms of controlling how it is used and its efficiency. However, the amount produced is accurately measured and so the carbon it contains can also be measured. This means a known target value exists on how this is mitigated by carbon sequestration, reforestation etc.

While the focus of this article has been on floating structures, it remains equally applicable to bottom-based structures such as jack-ups. This is due to most of the technologies being comparable across the unit types. The activity required in all these elements is to understand the process and its constituent elements, measure it and present per lifecycle stage and the whole process to the world as a whole. Society can then judge how well the industry is doing and industry can explain where it is with respect to the goal of net-zero carbon per project and the life cycle stage.

The question of mistrust between the public and the offshore industry cannot be ignored and community engagement with relevant stakeholder groups is essential at all stages. Third-party assurance providers such as classification societies can play a significant role in this process, but trust will require participation from all industry stakeholders throughout the supply chain.

Horizons October 2020

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