Oil and gas: meeting challenges today...

for tomorrow

Hydrocarbons will remain essential to sustainable global economic development and prosperity for decades to come. Yet meeting the worlds growing need for energy must be reconciled with security of energy supply and environmental protection.

ENERGY EFFICIENCY: IMPROVING ENERGY USE FROM PRODUCTION TO CONSUMER

ENERGY SAVINGS AND EMISSIONS REDUCTIONS The oil and gas industry is committed to increasing energy efciency in its operations and working with end-users to improve efciency in the use of its products. Finding ways to use energy more efciently can make a major contribution to moving the world onto a more sustainable energy path. Oil and gas companies have a strong nancial incentive to save energy, because of the large share of energy in the overall cost of operating their facilities. Efcient energy use reduces costs along the whole supply chain and makes energy more affordable to consumers. In fact, the industry manages to keep energy consumption from production and supply of a standard gasoline or diesel product to less than 18%* of that consumed throughout their life (N.B. efciency per unit of output, a broader term for all petrochemicals produced, is greater still). Investments in energy efciency are not always reected fully in the wider trends for energy intensity in the oil and gas industry. In spite of actions to reduce energy intensity across
*See CONCAWEs well-wheels study

Production efciency: Saving energy along the supply chain Industry efforts to improve the efciency of oil and gas supply processes, combat waste and reduce emissions include: n energy systems management, involving the use of information technology to analyse and control energy consumption in production and rening processes;
nm  ore efcient exploration, through

improved drilling success rates thanks to advances in seismic surveying and analysis, and drilling techniques; nc  o-generation of heat and power and the recovery of waste heat from production units using heat exchangers. nr  educed aring and venting of

associated gas, through investment in gas processing and distribution; ni mproved process operations and equipment, such as more efcient pumps and compressor turbines, and nh  igh-pressure pipelines, which require less energy input per unit of oil or gas transported per kilometre.

Oil and gas: meeting challenges today... for tomorrow

World energy consumption along the oil and gas supply chain
Energy consumption, 2009 Pipelines LGN Oil rening Production/ processing 0 50 100 150 200 250 Million tonnes of oil equivalent 300 Energy use per unit of oil and gas output 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%

Pipeline transport Liquefaction (LNG) / regasication plants Petroleum reneries Oil and gas extraction 1990 1995 2000 2005

Source: IEA

For further information CONCAWE www.concawe.be The European Council for Automotive R&D (EUCAR) www.eucar.be The European Commissions Joint Research Centre goo.gl/cEQ1j Good practice guidance on preparing effective are management plans goo.gl/PgsF4

IPIECA is the global oil and gas industry association for environmental and social issues. It develops, shares and promotes good practices and knowledge to help the industry improve its environmental and social performance; and is the industrys principal channel of communication with the United Nations. OGP works on behalf of the worlds oil and gas exploration and production companies to promote safe, responsible and sustainable operations. It represents the industry before international organizations and regionally at the European Commission. Printed for Rio+20, June 2012

the supply chain (see box on page 1), there are a number of factors increasing energy use. Oil and gas production and oil rening became progressively more energyintensive through the 1990s. This is because it has been increasingly necessary to drill deeper to nd and produce oil and gas, to use secondary and enhanced oil and gas recovery techniques, and to exploit heavier oil deposits and older reservoirs. In rening there is a demand to process greater volumes of crude, whilst also converting most of that crude into end products, and reducing environmental impacts through energy intensive processes such as greater desulphurization. These enhancements consume more energy. Even with these challenges, energy intensity in both the upstream industry and in rening has fallen signicantly since 2007 and is now back to below the level of the late 1990s, thanks to signicant investments by the industry in energy-saving technologies. CONSUMERS EFFICIENCY The industry is also promoting energy-efcient use of its products by end users. Signicant savings can be made as, typically, around 18% of energy is consumed in the production of fuels, the remaining 82% is consumed by enduse. For example, a 10% improvement in the efciency of oil use in transport and other end uses would save the equivalent of one-half of all the energy used by the oil and gas industry worldwide. As well as improving efciencies in their supply chains oil and gas companies are continually seeking to reduce energy needs through improvements in the quality of their products. Examples include advanced road fuels, motor oils and lubricants that improve vehicle performance. Several companies have developed proprietary additives for gasoline and diesel that help to enhance fuel economy. Some companies also offer specialized energy services such as energy audits and consulting

advice on how to reduce energy use to business and public sector customers, such as schools and hospitals. WELL TO WHEELS In the transport sector, the Well-to-Wheels initiative has helped establish the impact of different fuels and vehicle engines. Developed jointly by the oil industry research body CONCAWE, the European Council for Automotive R+D and the European Commissions Joint Research Centre, Well-to-Wheels calculates the energy use and greenhouse gas emissions associated with different fuels and powertrains, and the associated costs and benets. Industry partnerships facilitate the sharing of ideas and promote the awareness of energy efciency and emissions reduction methods and best practices both within the industry and externally. The industry is also collaborating with governments and other bodies on research and development of more efcient vehicles, as well as developing in-house process technologies for use under licence. For example, many oil companies are helping to develop advanced vehicle technologies and components, such as lightweight plastics and resins, often in partnership with automobile manufacturers. WHAT NEXT? The oil and gas industry recognises the need for everyone to use all types of energy more efciently and more cleanly and is committed to working with other stakeholders to drive forward initiatives to make this happen. Oil and gas companies will continue to research and develop new technologies. Energy efciency is essential to conserving energy supplies and reducing greenhouse gas emissions. The oil and gas industry will continue to support policymakers in formulating costeffective strategies and measures to promote the rational use of energy for the benet of all. n