5 January 2023
A more sustainable oil and gas production?
There are many paths leading to the objective. A more sustainable oil extraction is achieved through our own measures and through collaboration with supplier- and value chains.
What is scope 1, 2 og 3 for greenhouse gas emissions?
For the work related to greenhouse gas emissions, we use the terms scope 1, 2 and 3. Each “scope” applies to different aspects of the company’s climate footprint. Scope 1 includes all direct greenhouse gas emissions from sources we own and control. We have full control over these emissions, so these are our prioritised emissions to reduce.
For Vår Energi this means the emissions we have from our offshore installations for field oil- and gas extraction. These emissions are also subject to a quota system, where we pay fees and taxes per ton greenhouse gas emissions we release. We have implemented several small and large measures to reach our objectives for scope 1.
Scope 2 are the emissions from the power we acquire. In Norway we mainly purchase renewable energy from hydro power, meaning low emissions. Most of our power consumption happens on Goliat, which is partially electrified with power from shore.
What is Scope 3 – and what objectives and measures do we have?
– Scope 3 applies to the emissions throughout our value chain, from start to finish, both through the supplier chains, and through transport, refining and finally the use of our oil- and gas products, says Ivar Kvadsheim, Sustainability Advisor at Vår Energi.
Our offshore operations depends on vessel support and transport, which is a large source of emissions in our value chain. Emissions from the production and transport of goods and services we acquire, are major sources of emissions from the supplier chain.
– We use a lot of steel, cement and chemicals, which are all produced with large emissions. However, these industries are working hard to reduce their emissions as well, so low emission products are becoming available here as well, says Kvadsheim.
– Our most important contribution would be to purchase products produced with lower emission, even though this can mean increased prices. We have a policy that states we can weigh sustainability elements – for instance greenhouse gas emissions – up to 30% for acquisitions. This is an important measure to drive down emissions from our acquisitions, he continues.
– The emissions in the value chain after we have delivered the “product” are clearly the most difficult ones for any oil- and gas producer. The emission from the use of our products compose over 90% of the total emissions in our value chain. This is a challenge, not just for us, but for the industry as a whole, and for everyone who uses fossil fuel – whether it is for a gas power plant, power-intensive industry, transport, or you and me as consumers, tells Kvadsheim.
Today carbon capture and storage, hydrogen and ammonia are the possible solutions to reduce these emissions. This is not a challenge Vår Energi can solve on our own, but we are involved in innovation, research and development within all of these areas.
Industrial political collaboration equals sustainable extraction of oil and gas
So what is needed for a more environmentally friendly oil extraction? The answer is a combination of our own measures, research for the future and collaboration across industries and nations.
– There is a lot we can do, and we and other partners are heavily invested, but to really make a difference for the scope 3-emissions, a close collaboration of partners across supply chains and borders are required, says Kvadsheim.
In order to successfully transition to low- or zero emission energy, it is important the infrastructure and the value chains are in place.
– We almost take it for granted today that oil and gas from the Norwegian Continental Shelf (NCS) can be transported in pipes and ships to terminals across Europe, into refineries and to customers, but this infrastructure has been carefully built over a long time with large investments. Now we need to do the same for hydrogen and ammonia – and at the same time also capture CO2 and transport it the other way to store in reservoirs on the NCS.
Progress within this area is being made, but it needs to be upscaled seriously the next decades if we are going to contribute to reaching the climate objectives in the Paris-agreements, he says.
Vår Energi wishes to be honest and transparent through this process. We are an oil- and gas producer, and we will continue to be until renewable energy can sustain the world’s need for energy. We believe oil and gas will continue to be a part of the world’s energy mix for a long time, and that the NCS will contribute by being a trusted supplier of oil and gas products with low emissions.
We will take responsibility for our own emissions from the production of oil and gas, and we will be an instigator to reduce the emissions both in the supplier chain, and from the use of our product. We need to focus on two thoughts at once.