It’s clear: fossil fuel majors from around the world are preparing to redefine their core competency from oil and gas extraction to “energy” provision over the next few decades. In the meantime, the biggest players are working on getting their oil operations on the green side.
Aera Energy, a joint venture owned by Shell and ExxonMobil, is building California’s largest solar energy project in the San Joaquin Valley, where 1.7 billion barrels of heavy oil have been extracted since operations began in 1911.
The company will install 770 acres of glass homes with solar thermal mirrored throughs. Forbes estimates the total cost of the project at $250 million. As the sun travels from east to the west in sunny California, the panels’ angle will change to match the celestial body’s daily dance, which will allow a maze of pipes to heat water and create industrial steam.
The 12 million barrels of steam generated per year at the facility will be used to cut carbon emissions from the Belridge oilfield’s production operations. The steam generated by the solar thermal project will be used to heat heavy oil and make it flow to the surface more easily. The project will be connected to the California power grid and is expected to eliminate 375,000 tons of carbon emissions per year, leaving $15 million in gas savings annually.
“It’s a challenge in California, where you need your performance to be even stronger to offset the regulatory costs of doing business here,” Aera CEO Christina Sistrunk told Forbes recently. “Previously we couldn’t afford to do it.”
Related: The 'Mega' Oil Field That Will Never Boom
GlassPoint, the company installing the glass homes to Aera’s orders, has done projects like this in the past. It built a similar project in another part of Kern County six years ago, which led to a $600 million project in Oman to construct a 1,000MW steam-powered oil extraction system. That project reduced GlassPoint’s costs by a full 55 percent from the scale-up.
GlassPoint CEO Ben Bierman sees his contribution to the oil supply chain as an essential upgrade to oilfields around the world. Bierman’s product reduces emissions in the non-commercial sector, but the world’s fossil fuel providers will eventually have to abandon their old ways entirely.
For the biggest firms, like Exxon, Total, Shell and others, the transition will not be hasty—and it need not be. The world will still need copious amounts of non-renewable energy as the phase-out is underway. But these same companies will eventually need to emerge as leaders in the green energy game to stay relevant. Related: Oil Price Boom Keeps Lid On Natural Gas Prices
Private sector leadership will make a huge dent in ensuring the United States meets its carbon targets. Oil and gas companies have faced an existential human resources scare over the past few years as negative portrayals of the environmental effects of fuel usage sweep the media.
Millennials are also disinterested in taking petroleum engineering coursework in college to work for an industry in its dying decades. Large investments in green energy promise new talent for oil companies. Whether they become part of a supply chain upgrade or link directly to homes and businesses, every offset in oil and gas demand contributes to the industry’s stated end goal: a world where energy complements the environment, instead of threatening its delicate balance.
By Zainab Calcuttawala for Oilprice.com
More Top Reads From Oilprice.com:
- Analysts Raise 2018 Oil Price Forecasts After OPEC Deal
- Gas Shortage Has China Backtracking On Coal Ban
- Nigeria Reforms Oil Sector To Draw New Investment