Cost to Decarbonise

Abstract

Abstract Industrialization and economic growth has led to greenhouse gas emissions, primarily carbon dioxide (CO2), the major driver of climate change. As economies grow and industries expand, there may be a greater demand for energy, often met by burning fossil fuels. We are all seeing now how climate change is impacting us from rising temperatures, sea-level rise, and extreme weather events. Glaciers around the world are vanishing at an alarming rate. The disappearance of mountain glaciers is a visible manifestation of climate change. Glaciers in the Alps, Himalayas, Andes, and other mountain ranges have been shrinking, impacting freshwater availability, ecosystems, and water resources for downstream communities. The ongoing loss of glaciers threatens water supplies, hydropower generation, agriculture, and tourism in these regions. In July 2019, Greenland experienced an unprecedented ice melt event, with approximately 90% of the ice sheet experiencing surface melting. The melting of the Greenland Ice Sheet contributes to global sea-level rise and implications for regional climate patterns.[1] An iceberg in Disko Bay, near Ilulissat, Greenland. The massive Greenland ice sheet shed a record amount of ice in 2019, ending a brief period of more moderate ice loss. Credit: NASA/Saskia Madlene In Dec 2021, we in Malaysia were hit hard by heavy rainfall and widespread floods, resulting in deaths, evacuations and damages. The country suffered RM6.5 billion in losses and 54 deaths due to the once in a century rainfall event.[2][3] In retrospect, modernization and technological advancements is also leading to more energy efficient processes and adoption of cleaner energy sources. The energy landscape is rapidly evolving, with a greater emphasis on renewable energy sources, energy efficiency, and electrification. Consumers, businesses, and investors are increasingly seeking low-carbon alternatives to traditional fossil fuels. Oil and gas operators need to adapt to this shift in market preferences and investor expectations to remain competitive. One way is to actively decarbonize the current operations. In this way, operators can position themselves as responsible and forward-thinking companies, meeting market demands, transition to a lower-carbon energy mix and ensure their long-term viability in a changing energy market. We are seeing today, Governments worldwide implementing stricter regulations to reduce greenhouse gas emissions and combat climate change. Oil and gas operators need to adapt to these changing regulatory landscapes to ensure compliance and avoid penalties or potential restrictions on their operations. By embracing decarbonization strategies, such as reducing emissions and investing in cleaner technologies, operators can position themselves favourably within evolving regulatory frameworks. Demonstrating environmental responsibility and sustainability can enhance their reputation, build trust with stakeholders, and maintain a positive relationship with local communities and environmental organizations. Some of the approaches Oil and Gas Companies can implement in their strategies are on flaring and venting reductions, methane emission reduction, energy efficiency measures (Eg combining heat and power systems, or waste recovery), renewable energy integration, carbon capture, utilization and storage (CCUS), Research & Development of low carbon technologies, etc In summary, decarbonization is crucial for oil and gas operators to address climate change, comply with regulations, meet market demands, attract investment, diversify portfolios, and maintain a positive reputation. Embracing decarbonization efforts allows responsible operators to navigate the evolving energy landscape and position themselves for long-term success in a low-carbon future, thus contribute to global efforts to limit global warming and achieve climate targets. The objective in the end, by decarbonizing the economy and embracing sustainable development, societies can strive to achieve a balance between economic growth and environmental stewardship.