Holistic Strategies Fuel ESG Maximization for Oilfield Electrification

Reliability, emissions reduction and cost savings are some of the biggest reasons to invest in electrical infrastructure supporting oilfield production assets. When oil and gas exploration and production (E&P) companies begin to recognize the potential of oilfield electrification efforts, they can be eager to jump in and pursue quick, easy wins.

Optimizing those electrification measures calls for full understanding of the options, cost and implications with each choice. While pursuing only those early emission reduction wins can be simpler to justify in the near term, they can make long-term environmental, social and governance (ESG) success more difficult if implementation does not accommodate the necessary flexibility for ESG goals that may change in years 2, 5, 10 and beyond.

Developing a long-term vision is critical to the success of ESG-focused infrastructure projects like these.

Mapping Out an Integrated Strategy

Preparing a holistic strategy involves looking beyond investor-driven organizational plans and considering the whole organizational structure for greater utilization of assets. This prepares operators for feedback and accountability on emissions reductions, irrespective of the technologies deployed. A robust feedback loop within the organization facilitates planning that has the flexibility to manage assets, operations, maintenance, inventory strategy and procedural standards.

It is essential to look at a few critical items in parallel. Begin by looking at what loads are expected, when they are expected, what size they will be, where they will be geographically, and what kind of power quality issues — such as harmonics or voltage issues — they may present when clustered.

From there, it is valuable to map those size, geographical and time-dependent projections against existing infrastructure availability — both distribution and transmission line capacity — in the immediate area. Which utilities are operating in the area and how much load capacity is available on which lines? Where might an interconnect substation be needed to support future growth, and who would own and operate it? Good planning will map out anticipated electrical distribution and account for the necessary telecommunications infrastructure ahead of time.

These observations then should be correlated with well site mapping. Initiatives will involve energizing a number of sites over time, taking as many fossil-fueled generators offline to maximize the emission reductions in support of the overall oilfield electrification strategy without needing to completely overhaul the area’s existing transmission infrastructure. This is focusing on the art of the possible.

Six Things to Keep in Mind

Through experience in oilfield electrification endeavors, some valuable lessons can be unearthed. These gems can help project leaders maintain the necessary holistic mentality for ongoing success amid ever-changing production drivers and ESG goals:

1. Avoid the fallacy of scalability. Organizations often already have some electrification in the field, such as controls, pumps or compressor stations. But attaining a larger portfolio for emissions reduction requires a strategy at another degree of magnitude. It is not as simple as saying, “Let’s do what we did before, but just do it 1,000 times.” Organizations must prepare for the challenges that come with tackling larger, integrated electrification projects.
2. Avoid device-centric traps. Maybe a solar farm could power some operations; perhaps batteries could smooth the generation edges. There are many solutions, but the right direction in one play might be a terrible choice for another. A technology-agnostic approach helps organizations optimize their strategies across their portfolio.
3. Beware the shortsighted mindset. Organizations need to look beyond the easy wins of deploying a few assets quickly. They should make sure those assets are fit for purpose, but also allow for flexibility. A strategic approach with a big-picture mindset will result in a speed-to-market deployment of the right assets for both near- and long-term success.
4. Understand electrification is a cycle, not a destination. Having an organizational feedback loop is essential to answer such questions as: What is the inventory strategy? What will make maintenance successful? How will the system be positioned for load of 20 megawatts one year, 40 MW by the fifth year, 100 MW in the eighth and so on? Successful oilfield electrification recognizes that “set it and forget it” is a recipe for failure.
5. Focus on the core and get help with the rest. When organizations begin looking beyond their core business, they would be wise to either find a partner or start to grow the organization for the additional needs. Some might think of their electrical systems as auxiliary, but as electrification ramps up to these levels — whether that includes connecting to the grid, incorporating batteries into a microgrid, adding solar or applying other approaches — it is implausible to expect the organization to be prepared on day one. Working with the right experienced partners from the earliest stages will help an integrated oilfield electrification strategy achieve its full potential.
6. It’s all going to change. Electrification requires organizations to change, and that needs to be understood from a change management mindset. Deploying assets quickly might help reduce carbon emissions and start to hit other business drivers, but if the organization isn’t prepared for a strategic change, the long-term success of these efforts will suffer greatly. For example, some early drivers in year one might not even be applicable by year three. Recognize the need to continually evolve both the strategy and the organization to maximize benefits.

Emissions reductions are a critical component of ESG value scenarios. Oilfield electrification has strong potential to help E&Ps attain meaningful reductions. The keys to making those initiatives successful for the long term is to approach planning in a holistic, integrated way, and to maintain a flexible, adaptable mindset throughout implementation and over the coming years.

Getting electricity to oil and gas wellfields can be complicated; it may take years for a utility to build the necessary power infrastructure. A number of win-win strategies can help smooth the roads ahead.