Energy efficiency: A win-win for the environment and the economy

15 June 2009
By Steen Hartvig Jacobsen, journalist

The energy consumed to produce oil and gas in the North Sea accounts for about 4 per cent of Denmark’s gross energy consumption. Therefore, this consumption must be addressed when Denmark implements the energy policy agreement from February 2008, a policy that aims to reduce gross Danish energy consumption by 2 per cent during the period 2006-2011. The process is well underway: As a first step towards this goal, the DEA joined with operators in producing a report that reviews the options for improving production efficiency, published in December 2008. Against this background, the Minister for Climate and Energy, Connie Hedegaard, made an agreement in April 2009 with the operators to launch an action plan aimed at reducing energy consumption for oil and gas production by 3 per cent in the period 2006-2011. Without this action plan, energy consumption was expected to increase by 1.5 per cent.

Operators increase focus on energy efficiency

Energy consumption and the associated CO2 emissions per produced unit of energy have climbed over the past years. This is a natural consequence of the efforts to raise the recovery factor in Danish oil fields by using energy-intensive methods, such as water injection, to displace the oil towards the producing wells. The operators have focused on improving recovery for a great many years, and their efforts have been largely successful.

The energy policy agreement has raised operators’ awareness of the potential for improving energy efficiency in oil and gas production. The operators and the DEA have collaborated on determining more efficiency measures, and the first initiatives to improve energy efficiency have demanded no investment, only operational changes.

• The operators have clearly embraced the task put to them by the Danish Government. Their desire to develop a more environmentally friendly profile and the financial incentive offered by taking energy-efficiency measures in production operations have undoubtedly fuelled their enthusiasm, says Henrik Andersen, Director, who is charged with the practical aspects of jointly implementing the action plan with the operators.

He goes on to mention flaring, which means combusting waste gas for safety reasons without any benefit to production. The level of gas flaring largely depends on operating conditions. For example, the commissioning of new processing facilities usually entails increased flaring. The figures speak for themselves: From 1999 to 2000, CO2 emissions from flaring dropped to less than one third, albeit from a very high level. From 2007 to 2008 alone, emissions from flaring went down more than 20 per cent, a reduction achieved because operations were stable and operators focused more strongly on this aspect of production. CO2 emissions from fuel consumption associated with production have remained fairly constant for the past five years, ranging between 1.6 and 1.7 million tons per year.

A pilot project to be carried out by Mærsk Olie og Gas in the Harald Field next year will show whether a newly developed system to collect gas in the flare system is successful enough to be extended to all processing facilities. Furthermore, Hess Denmark, the operator of the South Arne Field, is analyzing the possibilities of reducing the volume of flared gas.

Numerous initiatives

In the period until 1 October, the operators are to introduce an energy management system to structure their energy-efficiency programmes. First and foremost this will involve an increased focus on energy efficiency in the operation of offshore installations. Moreover, the design of new installations and modifications will be based on the Best Available Technology (BAT). In practice, this means that operators will buy the most energy-efficient equipment, improve the efficiency of energy used for lighting and reduce the use of lift gas and injection water to the extent that this does not counteract measures to optimize recovery.

In addition, the operators are analyzing a wide range of options for investing in technical measures to increase operation efficiency in the short term, for example by using surplus heat to replace electric heating in accommodation facilities, converting the Skjold Field to unmanned operation, using a new type of surface coating on turbine blades and expanding collaboration with other operators to save fuel for helicopters, vessels, etc.

The operators also intend to jointly analyze more long-term strategies: Can a higher percentage of crude oil be transported by pipeline instead of tanker, can the processing of crude oil be optimized, can the energy efficiency of pumps be improved by adding additives to injection water, etc.?

During the period until 1 march 2010, the DEA is to investigate a couple of major initiatives together with operators and Energinet.dk to analyze whether the pressure of export gas from Tyra East can be reduced. Similarly, the parties intend to investigate the possibilities of centralizing the supply of electricity to the North Sea fields. Two alternatives will be analyzed: Either the establishment of a joint power production plant on a central platform, which will supply electricity to all production facilities in the North Sea through cables, or joint electricity supply to the fields via an external cable connection from shore, an offshore wind farm or the super grid that the EU Commission intends to establish in the North Sea.

Henrik Andersen emphasizes that the operators have taken a very constructive approach to the political task imposed on them:

• This political initiative has given rise to innovative thinking and heightened operators’ awareness of energy savings offshore. It has been a positive experience to see how efforts to improve the environment have also boosted economic performance. It has become a win-win situation, benefiting both the operating economy and the environment, says Henrik Andersen.