Chapter 8: In praise of convergence

As we have seen in the previous chapter on carbon capture and storage, environmental protection and commercial self-interest can often coincide: in that case (practical difficulties notwithstanding) through a complex value chain involving power generation and the use of CO2 to enhance oil recovery with a corresponding reduction in greenhouse gas emissions.

Environmentalists describe this phenomenon as “convergence”, seeing it as the ideal outcome for any measure aimed at saving the planet. The benefits of convergence also include the spin-off effects of technological development, from R&D funding to manufacturing start-ups to exports, associated with environmental measures, particularly as the rapidly expanding environmental technology sector has become hugely profitable in recent years.

Thrills and spills
Different phases of oil and gas extraction give rise to different types of emissions and discharges. Exploration entails discharges of drill cuttings and emissions to air from energy production, plus the danger of acute oil spills  fortunately very rare  which can harm wildlife. During the operations phase there are discharges to sea and emissions to air, primarily water with residues of oil and chemicals (produced water) and exhaust gases from energy production and flaring, plus nonmethane volatile organic compounds (nmVOCs) from the storage and loading of crude oil. There is also some danger of oil spills during the operations phase. In addition to CO2, environmentally hazardous substances released to air include nitrogen oxides (NOx), nmVOCs, methane (CH4) and sulphur dioxide (SO2). Governments employ a variety of policy instruments in the different phases of petroleum activity, from the exploration phase through the operations phase and finally, decommissioning. These instruments also vary according to the different types of emissions to air and discharges to sea. Broadly speaking, emissions and discharges from petroleum activities in Norway are regulated by the Petroleum Act, the CO2 Tax Act and the Pollution Control Act. Petroleum facilities on land are subject to the same types of policy instruments as other land based industry. The processes involved in evaluating consequences and approving new development plans are key elements of the petroleum legislation. Facilities located on land or at sea within the base lines are also subject to the Planning and Building Act.

Agreements, protocols and conventions
International agreements are also a factor in Norway’s efforts to limit emissions of various pollutants. How this affects the petroleum sector will depend on how the individual agreements are worded, and how the requirements and policy instruments are distributed by sector. Air pollution agreements normally specify an emissions threshold for each country. The wording of the agreements determines whether the imposed limits must be implemented in their entirety within each country’s borders, or whether reductions can also be made in other countries where the costs of such reductions may be lower. The costs of reducing emissions from the various sources, both domestic and international, will help determine the degree to which measures will be implemented in the petroleum sector.

Emissions with regional environmental impact are regulated by various protocols under the Convention on Long-Range Transboundary Air Pollution (LRTAP). In 1999, together with the USA, Canada and other European countries, Norway signed the Gothenburg Protocol, which aims to solve the environmental problems of acidification, eutrophication and ground level ozone, and which entered into force in 2005. Under this protocol, Norway is to reduce NOx emissions to 156,000 tonnes by 2010. This implies a 27 per cent reduction from emission levels in 1990. The new commitment for nmVOCs is virtually unchanged from the one accepted by Norway under the existing Geneva Protocol, i.e. that annual nmVOC emissions from all of the mainland and the Norwegian economic zone south of the 62nd parallel should be reduced as quickly as possible by 30 per cent from 1989 levels. Under the Gothenburg Protocol, total national emissions shall not exceed 195,000 tonnes per year by 2010.

Global climate pollution is regulated by the UN Climate Convention. According to the Kyoto Protocol, Norway is obliged to ensure that average emissions for the years 2008-2012 do not increase; the CO2 Tax Act and the Greenhouse Gas Emission Trading Act constitute the key policy instruments designed to reduce emissions of carbon dioxide. Government authorities can also deploy a sizeable arsenal of other policy instruments, ranging from plans for development and operation (PDOs) and plans for installation and operation (PIOs), to emission/discharge permits and production permits, which also cover flaring. Under the Petroleum Act, burning of gas through flaring, beyond what is necessary to ensure the safety of normal operations, is not permitted without consent from the Ministry of Petroleum and Energy.

School of hard NOx
Flaring accounts for approximately ten per cent of the CO2 emissions from petroleum activities, but levels in Norway are low compared with other countries. The CO2 tax and direct regulation of flaring have triggered a number of emission-reduction measures, an area in which Norway leads the field. In 2006 the Parliament decided to introduce a tax on NOx, the aim of which is to reduce annual emissions in accordance with Norway’s commitment under the Gothenburg Protocol. The tax primarily targets emissions from onshore industry and covers emissions from big units in shipping, air transport, onshore industry and the continental shelf. Discharges of nmVOCs associated with loading and storage of crude oil offshore have been regulated since 2001 by means of discharge permits issued pursuant to the Pollution Control Act.

Companies must apply for discharge permits from the Climate and Pollution Agency (formerly the Pollution Control Authority) in order to discharge oil and chemicals to sea. Under the Pollution Act, the operating companies themselves are responsible for establishing the necessary contingency planning measures to counteract acute pollution. Municipal and national emergency response plans are also in place. Discharges of oil and chemicals which may cause local environmental impacts are regulated on a national basis through a permit system pursuant to the Pollution Act and internationally through the OSPAR Convention.

Zeroing in
A target of “zero discharges” of ecotoxic substances to sea from petroleum activities was set in government White Paper No. 58 (1996-1997), Environmental Policy for Sustainable Development. The zero discharges concept derives from the precautionary principle, which aims to avoid unacceptable risks to health or the environment from naturally occurring chemical substances as well as chemical additives. Operating companies on the Norwegian continental shelf are expected to be ambitious in their endeavours to achieve this goal, and to work actively to develop and put to use new techniques in pursuit of the “zero discharges” ideal.

Discharges of environmentally hazardous chemical additives have been reduced (in accordance with prudent technical and safety factors) to such an extent that the target is now considered to have been met as regards these substances. With regard to oil and naturally occurring substances in produced water, process optimizations, reinjection of produced water and cleaning measures appear to contribute most to reducing the risk of harm to the environment, within an acceptable cost frame. Initially, the goal of zero environmentally hazardous discharges to sea should have been met in 2005. On several fields, however, the process of evaluating, testing and implementing measures has been more time-consuming than expected. This is due to greater technological challenges than presumed, and the need for further adjustments and testing of equipment.

In most cases, emissions to air are calculated on the basis of the volume of fuel gas and diesel consumed on the facility. The emissions factors are based on measurements from suppliers or standard figures developed by the industry itself, through the Norwegian Oil Industry Association. When calculating total oil discharges, the volume of produced water discharged to sea is measured, followed by an analysis of the oil content in the water. Discharge of chemicals is calculated based on consumption, relative to how much is recovered and/or injected.

Database of discharges
The Climate and Pollution Agency, the Norwegian Petroleum Directorate and the Norwegian Oil Industry Association have established a joint database to report discharges to sea and emissions to air from the petroleum activities. Since 2004, all operators on the Norwegian continental shelf report emission/discharge data directly in this database. This allows both the operating companies themselves and the authorities to more easily analyse historical emissions to air and discharges to sea in a more complete and consistent manner.

Generally speaking, emissions associated with production of a unit of oil or gas will vary between fields, as well as over the lifetime of a specific field. Reservoir conditions and transport distance to the gas market are factors that cause energy requirements, and thus emissions, to vary from field to field. The fact that emissions also vary over the lifetime of a specific field is in part due to an increasing amount of water in the well stream as the field ages. As the energy required in the process facility largely depends on the total volume of liquid and gas (water, oil and gas), a field will have higher emissions per produced unit as it matures.

Treatment and transport of produced gas require more energy than liquid production. As production of gas accounts for an increasing percentage of production on the Norwegian continental shelf, this has a significant impact on the development of the indicator CO2 emissions per produced unit.

Technology to the rescue
Combined cycle power plants, recirculation of flare gas and injection of CO2 from produced gas at Sleipner West are examples of Norway’s world class position in developing efficient environmental solutions on the continental shelf. The power plants exploit the heat from turbine exhaust gas to produce steam, which in turn is used to generate electric power. Combined cycle power increases energy efficiency, and is currently in use on the Oseberg, Snorre and Eldfisk fields. These facilities are unique in a global offshore context.

We have seen with the Utsira formation how CO2 can be injected and stored in depleted oil and gas reservoirs, or in geological formations under water or on land. Another example is the Snøhvit field, where CO2 from the gas production is separated out before the natural gas is cooled to liquid natural gas; the CO2 gas is then transported via pipeline from the LNG plant on Melkøya and back to the field for reinjection into the Tubåen formation. Approximately 700,000 tonnes of CO2 are expected be stored in Tubåen each year.

In the future, Norway will have excellent opportunities for storing CO2 due to its access to large, water-filled reservoirs and depleted oil or gas reservoirs off the Norwegian coast. Storage in depleted reservoirs is a good solution in terms of geology, because the structure is likely to be impermeable inasmuch as it has contained oil and gas for millions of years. The Norwegian authorities work actively to ensure that such storage of CO2 can be achieved in a safe and secure manner, in large part through provisions under the OSPAR and London Conventions.

Geological storage and IOR
A study by Gassco, Gassnova, the Norwegian Petroleum Directorate, and the Norwegian Water Resources and Energy Directorate of different solutions for transport and storage of CO2 from Kårstø and Mongstad concluded that geological storage of CO2 could be implemented on the Norwegian shelf from late 2011 or early 2012, assuming government decisions on investment. An aquifer found on the continental shelf outside of Mongstad (the Johansen formation) was seen as the most promising candidate based on safety and cost.

Following an evaluation of transport costs, the report recommended further studies of storage in the Johansen formation and in the Utsira formation in the Sleipner area. It was noted that establishing “an integrated capture, transport and storage project where all links of the chain are completed at the right time and with the right functionality” would be “demanding in terms of time and technical aspects”.

In short, there can be little doubt of the significant technical potential for improved oil recovery (IOR) through the use of CO2 in oil fields on the Norwegian continental shelf. The government’s ambitions for CO2 handling and the creation of a value chain for transport and injection of CO2 are demanding goals with tight deadlines. A particularly urgent task is to work out to what extent CO2 chains are feasible on commercial grounds. As oil fields enter into a mature phase and the pressure in the reservoir diminishes to the point that additional pressure support is needed to maintain production levels, injection of CO2 can be an alternative or supplement to the use of water or natural gas as pressure support. In some cases, CO2 is miscible with the reservoir oil, and can thus help to enhance production more than injected water or gas.

Significant challenges are associated with using CO2 to increase oil production from fields on the Norwegian continental shelf. Particularly costly are modifications of existing installations and equipment for injection and treatment of reproduced CO2. Several of the relevant candidates for CO2 injection contain large volumes of gas, and reproduced CO2 must be separated from the gas in accordance with sales gas specifications.

These processes require considerable space, and in many cases a new installation will have to be built in order to make room for the equipment. An oil field needs CO2 deliveries for a much shorter period of time than the anticipated lifetime of a gas-fired power plant. In addition, the need for added CO2 will diminish as more and more CO2 is produced with the process stream. There is not necessarily concurrence between access to CO2 from a gas fired power plant and the CO2 needed by an oil field. Therefore an infrastructure for CO2 transport must be developed that makes it possible to store CO2 as the need for CO2 to improve oil recovery on a field is reduced and oil production is shut down.

Larger volumes of CO2 are needed when CO2 is to be used to increase oil recovery. CO2 from a single point source will not provide sufficient volumes for optimal injection into an oil field. It may therefore be necessary to obtain CO2 from other sources in Norway or from abroad. A change in technology and energy supply concepts will be needed to ensure further increases in energy efficiency over the longer term. This calls for a long-term commitment to developing, testing and implementing new technology. For example: we know that, as with CO2, gas combustion in turbines, flaring and diesel consumption are key emission sources also for NOx. The volume of emissions depends both on the combustion technology and the quantity of fuel used.

The environmental impact of NOx emissions on fish and other fauna occurs through acidification of watercourses and damage to buildings, stone and metalwork resulting from acid rain; eutrophication, which may lead to a change in the composition of species in ecosystems, and damage to health, crops and buildings due to production of ground-level ozone. Mobile sources, including of course the petroleum sector, account for most Norwegian NOx emissions.

Most of the measures designed to reduce CO2 emissions also help cut NOx emissions. Introducing low-NOx burners as standard on gas turbines on new facilities can reduce emissions by as much as 90 per cent with no change in CO2 emissions. Low-NOx burners can also be retrofitted on existing turbines, although studies suggest that the costs are considerably higher than previously assumed. Injection of steam or water in the combustion chamber can reduce NOx emissions by lowering the combustion temperature; however, this technology requires large quantities of clean water, which is a challenge offshore.

The petroleum sector is the main source of nonmethane volatile organic compounds, accounting for almost half of such emissions in Norway. The compounds, which vaporize from substances such as crude oil, derive from offshore and onshore storage and loading activities. The environmental effects of nmVOCs include the formation of ground-level ozone. Direct exposure to nmVOCs can also cause respiratory tract damage.

Over the years the oil companies have developed technology for recovering nmVOCs released from storage vessels and shuttle tankers that can reduce emissions from loading by approximately 70 per cent. The operators of fields with buoy loading on the Norwegian continental shelf have formed a joint venture to phase-in this technology. A recovery facility for nmVOCs deployed at the crude oil terminal at Stura in 1996 was the first of its kind in a crude oil terminal. Since 2003, all vessels using the terminal must be fitted with equipment for recovering nmVOCs.

Chemical hazards
“Chemicals” in this context are a generic designation for all additives and auxiliary products used in drilling and well operations and in the production of oil and gas as well as natural chemicals. The main rule, as we have seen, is that no environmentally hazardous substances may be discharged, regardless of whether the substance is an additive or occurs naturally.

Some of these chemicals have a certain local toxic effect, but are diluted in the water column so that the acute impact on the environment is not very significant other than in the immediate vicinity of the discharge. A small percentage may have very serious environmental consequences, including hormone disruption or bioaccumulation. Potential long-term effects remain uncertain, but research in this area is virtually non-stop.

Most chemical discharges are associated with drilling activity, and discharge volumes vary according to the level of activity taking place. Chemicals that are not discharged are dissolved in the oil, deposited in the subsurface or are handled as hazardous waste. Total discharges of oil from the Norwegian petroleum activities account for a small proportion of total discharges into the North Sea: most of the oil discharged is considered to come from shipping and from the mainland via rivers. Emission permits include a requirement whereby oil must be stored and loaded using the best available emissions-reducing technology.

	These mussels are not the menu.

Oil discharges
All acute discharges from the facilities on the Norwegian continental shelf are reported to the National Coastal Administration, and the causes of the discharges are investigated. However, most major acute spills of oil that have reached land in Norway originate from coastal shipping traffic: a major oil spill caused by the grounding of the bulk cargo carrier Full City near Langesund in July 2009 is a recent example.

The environmental effects of potential acute oil spills depend on several factors, and not necessarily the size of the spill. The location of the spill, season, wind strength, currents and response measures are all crucial factors in the extent of damage. Acute oil spills can harm fish, marine mammals, seabirds and beach zones.

Oil discharges from the petroleum sector largely occur in connection with ordinary operations. Water that is produced with oil and gas contains remnants of oil in the form of droplets (dispersed oil), other organic components (including dissolved oil fractions), inorganic components (heavy metals, naturally low-radioactive compounds, etc.) and residues of chemical additives. This produced water is reinjected into the subsurface reservoir or cleansed as thoroughly as possible before it is discharged to sea. The volume of produced water increases as the fields mature and the reservoirs start to run dry. As of 2007, all OSPAR countries have adopted a new and comparable method for oil-in-water analyses. At the turn of the year 2006/2007, the maximum permissible oil content in water discharged from installations on the Norwegian Shelf was changed from 40 to 30 mg/litre. There is no proof of direct harm to the environment from operational discharges of oil. Recent research suggests that alkyl phenol in produced water does not entail a risk to the fish populations in the North Sea. However, potential long-term effects are uncertain and research is ongoing.

NOSCA
Founded in 1993, NOSCA  the Norwegian Oil Spill Control Association  is a non-profit cooperative of companies, R&D institutions and government agencies working together to develop equipment and contingency planning for oil spill emergencies. NOSCA members join forces to share their environmental technologies worldwide, assisting other nations, port authorities and private companies to build an effective contingency infrastructure for oil spill prevention and recovery. NOSCA shares its environmental knowledge and expertise internationally through a comprehensive network of experts and a busy schedule of courses, conferences and exhibitions.

HSE and PSA
The Ministry of Labour and Social Inclusion, which has the overall responsibility for health, safety and environment (HSE) in the petroleum industry, delegates responsibility for supervision to the Petroleum Safety Authority (PSA). HSE regulations focus on management systems and operational issues, and on cooperation between government authorities, industry and employees’
associations.

A substantial reduction in the risk of major disasters and occupational accidents on the Norwegian continental shelf over the years is linked to the development of methods for assessing risk and identifying areas for improvement. HSE initiatives include the “Trends in risk levels” project, launched in 1999/2000 and focusing on work or industry-related accidents and the work environment, and the Safety Forum, established in 2001 “to initiate, discuss and follow up relevant safety, emergency preparedness and working environment issues in the petroleum industry, both offshore and at land facilities”.

According to the 2008 Trends in risk levels annual report, industry sources report “a positive trend... during the last five years, on both offshore and land facilities” and “greater emphasis on HSE today than in previous years and that a culture of safe working has been created”. However, several fatal helicopter accidents in 2009 have highlighted some serious concerns, and noise remains a major health issue in the sector.

Troubled waters
Proposals to expand activities in the Barents Sea and the ocean areas off the Lofoten Islands have always been controversial in view of the environmental importance  and vulnerability  of these areas, and their commercial importance as fisheries. As we have seen, some petroleum activity in important areas outside Troms and Finnmark has been allowed but a decision affecting environmentally valuable areas off the coast of Lofoten, Vesterålen and Troms has been postponed.

In the meantime, other important issues affecting the region include transboundary pollution, continued development of ecosystem-based fisheries, combating illegal fishing in the Barents Sea, introduced species, and risk management with regard to oil spills.

According to the government, the current management plan provides “a foundation for a sustainable commercial development in the North... [and] a responsible exploitation of the natural resources in this very interesting petroleum province, in coexistence with other harvesters of the sea, and within secure environmental boundaries”. The plan is also seen as establishing “predictable” framework conditions for petroleum activities in the Barents Sea and as a step towards establishing integrated management plans for all Norwegian coastal and ocean areas.