John Colpo
Global Manager,
Marketing & Strategy, Oil & Gas
Honeywell Process Solutions
I've talked with a lot of upstream customers, and most have a balanced approach that supports the integration of initiatives that might appear to be mutually exclusive or overlapping. Notably, they've set up lean ESG departments that are responsible for setting targets, strategy, technical concepts and benchmarking progress, but leaves the engineering and execution to those responsible for the individual assets. That way, if several stakeholders need operational or information technologies for, let's say, GHG sensing around equipment, it can all be implemented in an integrated, unified and fault-tolerant system. A great example of this new type of sensing system are the Versatilis transmitters we just announced at user group that are unbelievably easy to locate, install and support.
Q: What other strategies or best practices are oil & gas companies using to better manage their performance—and direct their capital investments—against these twin objectives?
A: I'd refer back to my earlier point about external dependencies. Any progress requires investment, and that investment needs to be carried by the company's cash flow. Various strategies make sense at specific points along the timeline the board has set for each of the abatement milestones. Not everything can be done at once, so what comes first?
It's well known that there are four main methods in GHG abatement strategy: eliminate, reduce, substitute and compensate. The first, eliminate, encompasses monitoring, compliance and the mitigation of fugitive emissions and unplanned flaring. The second, reduce, includes the optimization and electrification of existing processes. The third, substitute, entails the transition to renewable products and fuels such as green hydrogen, as well as carbon capture and storage. Finally, compensate applies to the direct air capture of carbon dioxide or using carbon credit strategies.
Among others, optimization is the low-hanging fruit on this tree of strategies. Optimization, perhaps better called autonomous, is itself a large topic, but it has many components that can be implemented quickly, fewer dependencies, and provides positive cash flow in a short time—helping to provide some of the capital required for the other levers.
Q: Honeywell has described a maturity model for autonomous operations. Can you walk us through those five stages of maturity, and how an oil & gas company’s maturity on that scale can correlate with improved environmental performance?
A: The first stage consists of controlled and optimized process operations: distributed controls with properly tuned loops and models that ensure robust and efficient operation.
Level 2 we call intelligent operations, where you begin to integrate silos of work. Begin to integrate work teams across assets and across disciplines—such as maintenance and operations. Implement integrated planning of activities to fully exploit the synergies and consider what maintenance activities can be deleted or made less frequent, where mitigated by condition-based maintenance.
Level 3 we characterize as remote and/or integrated operations. Take the gains from Level 2 and make more significant changes in how staff are dispersed around the organization. This can apply equally to greenfield or brownfield assets, and requires a rethink of how equipment and processes are operated and maintained. Business models remain largely unchanged, but cost-to-serve or break-even costs are significantly lowered, thus improving business resilience in a volatile and technically complex market.
Level 4 begins with IoT technologies such as virtualization, improved networks, cloud storage and services, and user interfaces with improved mobility such as smart phones—all leading to a highly virtualized systems environment that can be remotely managed, administered and operated from anywhere.
Finally, Level 5 builds on the IoT infrastructure with software applications, such as machine learning, artificial intelligence, virtual and augmented reality, improved edge devices, sensing, drones and robotics to implement edge-to-cloud operating models.
Q: What lessons can other industries take from leaders in the oil & gas space?
A: Much of what we've discussed can be applied across other "hard to abate" industrials, such as conventional power generation, steel and cement, which together account for the majority of industrial GHG emissions. Concepts such as remote and integrated operations have been common in oil & gas for some time, but similar concepts can apply these industries, leading in turn to reduced operating costs. Again, these approaches can be applied early and provide positive cash flow much sooner than the more radical GHG abatement levers.
