Saving Energy in the Oil and Gas Industry

Abstract

Abstract Hydrocarbons will remain essential to global economic development and prosperity for decades to come. Meeting rising energy demand needs to be reconciled with the goals of energy security and environmental protection. Energy efficiency and conservation can make a major contribution to moving the world onto a more sustainable energy path. Most of the potential for saving energy lies with end users, yet the oil and gas industry continues to invest heavily in further improving the energy efficiency of its own operations, reducing waste and helping final consumers to use less fuel. Major challenges remain, notably in countering the increased use of energy to exploit less accessible crude oil resources and to meet tougher fuel quality standards. The oil and gas industry, as a stakeholder in the energy debate, will play its part in further promoting rational energy use all along the supply chain for the good of everyone. Enhancing energy efficiency is an important issue for IPIECA members, and companies can contribute by implementing changes in their operations, planning and investments. There are many positive drivers for industry as energy efficiency can help in lowering operating costs and reducing environmental impacts. Energy efficiency can also extend the life of finite natural resources, and help keep energy affordable for consumers by lowering the investment costs and the effort required to meet rising demand. This paper draws on the new IPIECA publication, Saving Energy in the Oil and Gas Industry, which was launched at the 15th Session of the Commission for Sustainable Development. Case studies featured in the publication are included in the appendix. Introduction Global demand for energy is growing, driven by rising population and economic growth. Over the past three decades, energy use has more than doubled. This increase, in turn, has enabled the world economy to expand, raising living standards and helping to meet the aspirations of millions of people around the world. It is impossible to operate a factory, run a shop, drive a car or deliver goods to consumers without using some form of energy. Oil and gas make a vital contribution to meeting the world's energy needs. Today, they account for well over half of global total primary energy use. There are limited practical alternatives to oil-based fuels for transport—the fastest growing energy sector. In many cases, oil and natural gas are the lowest-cost fuels in industry, the residential and services sectors and power generation, and are essential feedstocks for a wide range of industrial and consumer goods. Demand for oil and gas, as well as all other energy sources, will continue to rise. In World Energy Outlook (2006), the International Energy Agency projects global primary energy demand to grow by more than half between 2004 and 2030 in a Reference Scenario that assumes no change in government policies (Figure 1). Oil and gas continue to dominate the global energy mix, their share of total primary energy use falling slightly from 56 per cent to 55 per cent. The use of modern renewable technologies, including hydro, solar, geothermal and wind power, expands rapidly, but their combined share of global energy demand reaches only 5 per cent in 2030 because they start from a low base. More than 70 per cent of the projected increase in overall energy demand comes from developing countries, where economic activity and populations are growing fastest.