We can all agree that electrification is a charged issue, so to speak. In our view, it’s the most efficient measure we have to reduce emissions from our production of oil and gas. To others, it’s a waste of both money and electricity. More on both viewpoints in a moment, but let’s start with this: What is electrification?
In simple terms, electrification means replacing fossil energy sources with electricity from renewable energy. The result will be lower greenhouse gas emissions. Do you drive an electric vehicle? Then you’ve already started down the electrification path. That’s a good thing. Because according to the UN Intergovernmental Panel on Climate Change, CCS is essential for achieving our shared global climate targets. In other words, electrification is an important part of the energy transition.
So, back to us. Because we’re a part of this transition. Today, the NCS is responsible for 25% of Norway’s total CO₂ emissions, and even the most optimistic forecasts say the world will need oil and gas for several decades to come. Which makes it vitally important to ensure that the oil and gas that is produced has the lowest possible emissions. To accomplish this, we are constantly on the lookout for better solutions, and electrification is one of them. In our opinion, perhaps the most important of all.
OK, but what do you actually intend to do? We intend to electrify certain of our platforms and onshore facilities. They require power, just like all other industries. Today, that comes from gas turbines that use gas from the production. This leads to significant emissions and wasted energy, so the best way to cut both of them is to replace the gas turbines with power from shore. That won’t just help us achieve our climate ambitions, it will also contribute to Norway achieving its targets as a nation.
But does it make sense to use renewable energy to continue to produce fossil energy? Yes, we believe it does. The world needs oil and gas, and that means that we must reduce emissions from production. That will also help cut global emissions. At the same time, our electrification plans will require a lot of power. Therefore, we believe that new infrastructure must be built, that the onshore power grid must be reinforced, and that we need to ramp up the pace in offshore wind development.
Won’t all that be very expensive? Yes, electrification of the NCS will obviously require very substantial investments. But we have to do something if we want to reduce emissions. And if we don’t electrify now, we’ll have to find other, different climate measures here in Norway. That process could easily become both more expensive and have greater consequences for people in general. Electrification helps extend the lifetime of the NCS, maintain jobs in the industry and create huge revenues for society – all while also cutting emissions.
What about electricity prices? Unless we increase power generation, prices will probably rise. But that’s not primarily about electrification of our platforms and facilities, it’s more about electrification of our entire society. The oil and gas industry is not the only one calling for power – in fact, our industry accounts for just 8% of the requested energy capacity in Norway. Therefore, if we want to keep prices low, we need to ensure that the energy we consume is used in the most efficient way possible; and we must also ensure development of more power, for example through offshore wind. Electrification of the broader society will be a tall order, and all of us will have to step up to achieve this.
