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Sustainable Mitigation Strategies for Oil and Gas Industry

Learn about Nationally Appropriate Mitigation Actions in the oil and gas sector to reduce emissions and access financing. Explore case studies from PEMEX and Ecopetrol.

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Sustainable Mitigation Strategies for Oil and Gas Industry

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  1. NATIONALLY APPROPRIATE MITIGATION ACTIONS IN THE OIL AND GAS SECTOR

  2. Background • Objectives • Contributes to goal of measureable and verifiable reductions to GHG emissions • Intended to enable mitigation action and access to financing • NAMAs could take the form of policies, programs or projects implemented at national, regional, or local levels • Demonstrated by case studies with PEMEX (Mexico) and Ecopetrol from 2011-13

  3. Background • Simple: • Avoids market fragmentation and unnecessary complexity in the number and design of new mechanisms • Simpler for negotiators to design and implement and easier for financing and investment • Efficient: • Scales up the market • Incentivises emission reductions at the sector level • Flexible/durable: • Able to accommodate developing countries and adjustments to planning over commitment periods • Environmentally effective: • Incentivises a real and measurable benefit to air quality and health

  4. Background • Credible NAMAs required verifiable • Baseline activity determination • Quantification of emission reduction opportunities • Economic business case development • Environmental performance improvements that can be measured, monitored and sustained • O&G NAMA = Business Case Development • Credible NAMA development required a rigorous, standardized business case approach

  5. 2011-13 Objectives – Mexico and Colombia • NAMA plan for upstream, midstream & downstream petro-chemical sectors: • addressed emerging priorities for management of energy, environment and the economy • advanced the development and transfer of knowledge and clean energy technologies • ensured the economic and environmental sustainability of oil and gas production • developed new and profitable opportunities to measurably improve resource recovery and environmental quality • developed a list implementable mitigation actions

  6. NAMA Approach • Based on previous GMI projects that included detailed measurement of energy efficiency, flaring, venting & fugitives quantification studies at upstream facilities • Bottom up approach enabled successful development of projects, programs or policies • Sector strategies included NAMAs for: • Upstream exploration, production & processing • Midstream gathering, storage & transportation • Downstream refining & petrochemical • This complemented existing and emerging government objectives for sector NAMAs in housing, transportation, landfill, water, etc.

  7. NAMA Approach • NAMA development based upon measurement derived studies at O&G facilities supported: • Verifiable facility baseline and benchmark development • Statistical extrapolation certainty for accurate sector emissions inventories • Standardized and verifiable determination of emissions reduction potentials • Extrapolation for sector strategies or facility based projects

  8. Benefits • Highly accurate baseline emissions quantification from measured process performance and fuel gas utilization • Supported existing and high priority energy efficiency and environmental objectives • Required information to enable strategic management of energy and capital resources • Provided companies with exposure to: • Measurement technologies, methodologies & service providers (GMI) • Emission reduction technology or service providers (GMI

  9. Benefits • Standardized and reproducible determination of opportunities • Capacity building via collaborative engineering evaluation of measured activity data • Verifiable quantification of technically achievable emissions reduction magnitudes • Important knowledge for all stakeholders • Extrapolatable to identify and compare sector specific emission reduction opportunities • Verifiable & necessary next step for carbon credits

  10. Benefits • Internationally standardized and credible “Business Case” implementation plans • Based upon transparent engineering and economic rigor • Identify costs for alltechnically achievable opportunities • Allows for immediate identification of cost effective opportunities • Informs corporate and government policy discussions to develop economic instruments to enlarge “cost effective” range • Enabled development of carbon credit projects to implement less cost effective opportunities • Potential for additional carbon revenue streams to capitalize projects

  11. Benefits • Implementation of projects based upon credible NAMA plans enabled: • Third party verification of emissions reductions • Verification of sustainability period of environmental performance improvements • Necessary final step for carbon financing to capitalize projects • Level of rigor complements the development of competitive proposals within companies • Could demonstrate leadership in international clean energy partnerships

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