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Hey #EnergyTwitter….here’s a thread on the electrification of oil and gas. #oilandgas #electrificationofeverything /START
There’s been a lot of chatter about “electrification of everything” as a way to tackle climate change & re-invent our energy system. One part of this electrification trend that receives less attention is the electrification of oil and gas./1
There are many motivations for the extractive industries sector to electrify. And that electrification shows up in multiple ways./2
It’s cheaper. By connecting to the grid, operational expenses (OPEX) are lower because the cost of electricity at ~$0.10/kWh is much cheaper than the natural gas or diesel required for on-site generators./3
It’s under-appreciated how important ERCOT’s deregulation has been to the shale boom. Comparatively high rates of electrification in West Texas oilfields + low power prices in ERCOT helps the region stay competitive with the Middle East./4
It’s cleaner. Grid-tied electricity dramatically reduces fumes and other emissions on-site./5
It’s safer. Electricity avoids trucks delivering fuel to run on-site generators. Every truck that comes to the site introduces a risk of damage or injury. Fewer trucks = safer./6
It facilitates the use of renewables. Once the well-site is electrified, then renewables can be used.

Lifecycle footprint ⬇️

Standing of operators w/ environmental regulators ⬆️ /7
By replacing pneumatic equipment with electric equipment, venting and emissions are avoided./8
It’s more efficient and productive. Electric devices are very efficient and for many locations, downhole electric submersible pumps can increase productivity of wells compared with gas injection./9
It shifts OPEX to CAPEX. Installing electric equipment powered by the grid or on-site renewables switches OPEX (for fuel for gensets) to CAPEX. Lowering OPEX is a good thing for marginal profits and CAPEX is easier to come by than OPEX./10
It’s reliable. Grid-tied electricity is much more reliable than on-site generators, which are finicky./11
It reduces maintenance requirements. Grid-tied electricity (and getting rid of on-site generators) means there is less equipment on-site to maintain./12
It saves space. Using grid-tied electricity means equipment can be removed, mitigating space problems for cramped wellpads./13
It can eliminate the need for environmental permits. Running on-site generators yearlong could trigger the need to get permits for NOx or other criteria pollutant emissions./14
Electrifying the site opens up the opportunity to earn revenues from ancillary services or to reduce the cost of energy by procuring interruptible power./15
While wellpads are an attractive place for electrification, some oil and gas majors are also looking at electrifying refineries to use electrochemical separation processes rather than thermal approaches (e.g. heat-based distillation)./16
Electrifying refineries lets them substitute on-site combustion of natural gas for heat with cleaner sources (either on-site or elsewhere). Doing so reduces company-wide emissions and could lead to more efficient separations./17
Importantly, natural gas is one of the industry’s key products. By avoiding its use at well-sites and refineries for pressure, heat, or power generators, the sector will have more product to sell./18
Overall, electrification is an exciting trend. And I suspect that oil & gas might be one of the key allies and early adopters of electrification. That might not be what some of the trend’s proponents thought./19
In summary, I think the experience of O&G could be a leading indicator of the cost, environmental and safety benefits that electrification offers for other industries./END
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