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BP energy transition strategy comes to Alaska, field efficiency is rising
Alan Bailey Petroleum News
BP’s new corporate policy for addressing the global transition towards lower carbon emissions energy is starting to impact the company in Alaska. At the same time, the company continues to overhaul its Prudhoe Bay field operations to sustain the field’s continuing viability in the coming decades, Janet Weiss, president of BP Exploration (Alaska) told the Alaska Support Industry Alliance’s Meet Alaska conference on Jan. 18.
In terms of the energy transition, the company has been seeking ways of reducing emissions from its Prudhoe Bay operations. The company strongly supports the Alaska liquefied natural gas project, as a means of bringing clean natural gas into the global market. And the company is buying carbon offsets from Alaska Native corporations.
At the same time, the company is aggressively pursuing a strategy of improved efficiency at Prudhoe Bay, through new technology and innovation, with the aim of keeping the field in operation for a further 40 years.
Energy transition strategy BP’s corporate energy transition strategy involves reducing emissions from its operations, improving its products and creating low carbon and renewable energy businesses.
“At BP we strongly support the transition to a lower carbon economy and we have tied it to our larger business strategy,” Weiss said.
She said that BP has cut its carbon emissions from its Alaska operations by 2 percent while, at the same time, maintaining production from the Prudhoe Bay field relatively flat. This has been achieved through effective project execution and optimization Weiss said, citing as an example a recent compressor upgrade that resulted in a major reduction in carbon dioxide emissions.
The company is also seeking ideas from within its organization for emissions reductions. The concept is to line up the ideas, for execution in the near future.
Alaska LNG BP also sees the export of liquefied natural gas, generated from North Slope gas, as a potential major factor in supporting global carbon emissions reductions.
“It could be a very big part of the global equation, when we think about emissions reductions,” Weiss said. “BP is committed to the strategy through its continued support of Alaska LNG.”
She characterized 2018 as a big year, albeit a year with challenges, for the Alaska LNG project. In 2018 BP signed a gas sales precedent agreement with the project and the company is continuing to work towards a long-term agreement to sell its share of the estimated 3 trillion cubic feet of gas that will be available from the Prudhoe Bay and Point Thomson fields, Weiss said.
“The state of Alaska is uniquely positioned to really help provide cleaner energy for the state and for the world through this project,” she said.
Native corporation carbon offsets BP has also been actively pursuing opportunities for investing in carbon offset projects, as a means addressing the carbon emissions conundrum. The idea is that the company invests in activities that either reduce carbon dioxide emissions or that result in carbon dioxide absorption. In Alaska this is involving investments in forestry offsets available from Native corporations. The Native corporations commit to preserving forestry on their lands for at least 100 years, and then account for the carbon absorption impact of the forests. California has certified the resulting carbon credits, which can then be sold to entities such as BP that generate carbon emissions, to offset emissions in California. The result is a new revenue source for the Native corporations.
“For the past few years we’ve been working with multiple Alaska Native corporations in the carbon credit offset projects,” Weiss said. “While some of these are in the approval process, we have recently completed two very large projects, one with Sealaska and one with Ahtna.”
According to a protocol in the California cap-and-trade program, these forestry projects support multi-use access to forest lands and sustainable management of the lands, thus creating economic opportunities, Weiss said. The Ahtna project agreement, finalized in 2018, is now the largest carbon credit event in North American history, she said.
“This will bring a steady stream of revenue to the region, including community investment programs, most of which can be related to education and natural resources,” Weiss said.
Continuing oil and gas demand At the same time, BP sees oil and gas remaining very significant components of the global energy mix for decades to come, as part of the dual challenge of satisfying growing global energy demand while at the same time reducing energy-related emissions.
At Prudhoe Bay, the company is trying to assure a 40-year future for the field, in support of continuing oil demand. Despite in 1977 being expected to have a 30-year life, the field still contributes more than half of the oil flowing down the trans-Alaska pipeline. Continuing with innovation at the field is the key to further extending field life, and foundational to the current renaissance in the Alaska oil industry, Weiss said.
“What got us here won’t get us there,” Weiss said. “We need modernizing, transforming every part of our business through technology and innovation.”
BP is currently conducting a 455-square-mile 3-D seismic survey in the Prudhoe Bay unit, identify opportunities for further oil development.
“That’s the largest that we’ve ever done at Prudhoe Bay and we’re using state-of-the-art technology. So we’ll have the best image that we’ve ever had,” Weiss said.
The company now has two drilling rigs up and running again at Prudhoe Bay.
“We’ve restarted those rigs, getting our well locations identified, so that we have many, many more years of drilling in Prudhoe,” Weiss said.
Efficiency improvements And the company has been examining every aspect of its operations, to find ways of improving efficiency.
“Over the past 18 months we’ve really taken a look at our operations and we’re ushering in and using a lot more technology, whether it’s drones or big data or virtual reality and digitization of our facilities. We’re seeing costs come down through technology,” Weiss said.
BP’s operations support more than 8,300 Alaska jobs, including the company’s 1,500 Alaska employees. And last year the company spent more than $855 million with Alaska businesses, while also investing millions of dollars in non-profit organizations across the state, Weiss said.
- ALAN BAILEY
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