Futureproofing New and Existing Pipelines
While the quest for greener energy continues, the fact remains that fossil fuels are the current king and will be for some time. How to meet environmental regulations now and ensure existing pipelines are ready for the future are important considerations for asset owners.
The recent COVID-19 crisis and pandemic-induced lockdowns took a heavy toll on the global energy sector. In 2020, energy demand across advanced economies fell by over 6% and, at one point, peaked at a 30% reduction. However, this is not the biggest threat facing the oil and gas industry.
Long before COVID-19, pressure was mounting on the energy industry to reduce its reliance on hydrocarbons in favor of "greener" energy sources. In December 2015, 196 countries entered the Paris Agreement to achieve universal clean energy access by 2030 and net-zero emissions by 2050.
To compound matters further, Russia's invasion of Ukraine has changed how we view our dependence on oil and gas in just a few short months.
These events accelerated worldwide interest in sustainable and renewable energy sources. As a result, governments, investors, and producers are juggling ways to reduce their environmental impact while adapting to changing energy demands.
Are Current Oil and Gas Pipelines at Risk of Becoming Obsolete?
Approximately three million miles of oil and gas pipelines traverse the United States. In 2020 alone, companies across the U.S. and Europe wrote off over $150 billion in oil and gas assets. In June 2021, TC Energy halted its Keystone XL pipeline after U.S. president, Joe Biden, revoked a key permit for the 1,200-mile project. Furthermore, NextEra Energy Inc wrote off $1.2 billion of its investment in the Mountain Valley Pipeline venture due to new legal and regulatory challenges.
Special Presidential Envoy for Climate, John Kerry, warned that natural gas pipelines could become 'stranded assets' as the administration moves towards its net-zero energy goals.
These events offer a clear signal that fossil fuels and associated piping infrastructure will face challenging odds in the U.S. Pipeline asset owners should, therefore, consider their options as soon as possible and make wise choices right from the beginning planning stages. Choosing what materials to use, reducing methane, CO2, and other emissions at the flanged joints with proper sealing and ways to mitigate corrosion to avoid leaks should all be considered from the start.
How Can We Ensure That Pipelines Are Green Today?
While global efforts are underway to turn towards alternative energy sources, many energy sector pundits argue that fossil fuels aren't going away anytime soon. According to the USGS, the world (excluding the United States) holds an estimated 565 billion barrels (bbl) of undiscovered crude oil, 5,606 trillion cubic feet (tcf) of undiscovered natural gas, and 167 billion barrels of undiscovered natural gas liquids. These estimates represent conventional oil and gas resources. Unconventional oil and gas resources, including tight oil, tight gas, shale gas, heavy oil, etc., are not included in USGS's study but are estimated to be significant.
In addition, numerous big-budget fossil fuel projects are currently underway. For example, the East African Crude Oil Pipeline (EACOP) will transport over 70 million barrels of oil annually from Uganda to the coast of Tanzania, where it will be shipped worldwide. Upon its completion in 2024, the 900-mile-long pipeline will be the world's longest heated crude oil pipeline. The EACOP aims to create thousands of jobs, boost economic activity, and lead to improved infrastructure (roads, bridges, etc.) along the pipeline route. However, the oil, when burned, will release an estimated 34 million tons of CO2 per year. As such, the EACOP has not been without controversy and backlash.
New pipelines such as these offer pipeline operators the chance to learn from past mistakes, in terms of protecting pipelines from corrosion. Cathodic protection, and other corrosion mitigation techniques such as electrical isolation using flange isolation kits, have been used retrospectively after a pipeline was constructed.
Now, operators should be proactive in their approach and employ these corrosion mitigation techniques at the start of the project. They should also be looking to reduce emissions at the beginning of projects.
One of the major challenges for the industry today is supporting existing and future pipeline infrastructure to ensure they operate within set environmental standards. Pipelines have to be more sustainable and efficient then they once were.
To play its part in mitigating climate change per the Paris Agreement, the oil and gas sector needs to reduce its emission by approximately 3.4 gigatons of CO2 per year by 2050. This represents a 90% reduction in current emissions. While it may seem like a mammoth task, this goal can be achieved by prioritizing relatively simple and cost-effective measures. For pipelines, one of the main ways emissions can be combated is by using a low emission seal, like those manufactured by GPT Industries, at the flanged joints, so that there isn't methane, CO2, H2S, etc. emitted into the atmosphere from pipelines. In addition, bring a contributor to mitigating corrosion to avoid leaks due to corrosion.
Asset owners can significantly reduce methane emissions, one of the most potent greenhouse gas emissions, by installing vapor-recovery units (VRU), improving leak detection and repair (LDAR), and applying sealing technologies on pumps, compressors, and pipe flanges. According to global management consulting giant McKinsey & Company, an unnamed company significantly reduced GHG emissions by replacing the seals in their pressure-safety valves. This company was then able to monetize the captured gas. McKinsey & Company estimates that emissions could be reduced by up to 1.5 gigatons of CO2 per year by 2050 at the cost of $15/tCO2 by sealing off fugitive emissions.
Another technique companies are looking at to decarbonize their operations is carbon capture. While this technology is expected to play a minor role in overall decarbonization, the oil and gas sector is poised to lead its adoption and development. The process involves capturing and compressing CO2 emissions, then injecting it into underground geological formations. Current carbon capture facilities can store about 40 megatons of CO2 a year. McKinsey & Company estimates this figure could increase 200-fold by 2050.
Expanding Into Low-Carbon Markets
Renewable energy gurus are lobbying hydrogen as the alternative fuel source of the future. Unlike natural gas and other fossil fuels, hydrogen does not emit carbon dioxide when burned. However, hydrogen still requires basic infrastructure to get it where it needs to be. This has prompted planners to consider using existing gas piping infrastructure for transporting and storing this cleaner energy source. Some pilot projects are even exploring the possibility of blending small amounts of hydrogen into their current networks.
While hydrogen may seem like a saving grace for existing fossil fuel infrastructure, the reality is more complex.
The physical and chemical properties of hydrogen differ from natural gas. So simply replacing one gas with another is not as straightforward as it seems.
One limiting factor is the interaction between hydrogen and existing steel pipes. Hydrogen is the smallest and lightest known element. By comparison, methane, the dominant compound in natural gas, is eight times heavier. Hydrogen's small size allows it to easily penetrate and weaken steel microstructures. This phenomenon, known as hydrogen embrittlement, can significantly reduce the durability of metal pipes, increasing the probability of cracks and failures. Depending on the steel's properties and the nature of the hydrogen exposure, embrittlement can reduce a pipeline's service life by up to 50%.
Hydrogen's small molecular size also vastly increases the potential for leakage when used as a fuel source. This is particularly critical since hydrogen has lower ignition requirements and higher combustive energy properties than natural gas. Therefore, sealing mechanisms, such as gaskets, require special attention. In this case, effective emission control can be achieved by using appropriate non-permeable gasketing solutions.
What Factors Need to Be Considered to Ensure that Existing Pipelines are Futureproof
Oil and gas has always been a dynamic business; however, upcoming changes in the global energy sector will, no doubt, test the industry's adaptability. Pipeline owners must position themselves to take advantage of the inevitable shift to low-carbon energy to improve their economic resilience.
The key questions oil and gas companies should consider are:
- How can we make our current hydrocarbon business comply with future sustainability goals?
- How can we adjust our operating model to thrive in a low-carbon world?
Reducing fossil fuel emissions in current pipelines is a simple and cost-effective way to ensure that oil and gas businesses comply with 2050 net-zero emission goals. Gasketing/sealing solutions, like the Evolution Isolating Gasket, can drastically reduce GHG leakage rates while improving the efficiency of hydrocarbon operations.
Although fossil fuels will be around for some time, pipeline owners must prepare for the eventual rise in hydrogen demand. Fortunately, the shift is expected to be slow, giving asset owners enough time to take action. Protective coatings and linings can be applied to pipeline interiors to prepare them for hydrogen transportation by minimizing the risk of hydrogen embrittlement. Also, proper sealing using non-permeable gasketing solutions needs to be considered to prevent hydrogen leakage. Evolution's PTFE inner diameter (ID) seal, for example, offers long seal life against hydrogen fuels.
While new piping materials make it possible for companies to jump on the low-carbon train from the start, all is not lost for existing pipelines. Older infrastructure can be optimized to reduce emissions and transport low-carbon fuels, like hydrogen, by employing simple, practical measures. Pipeline owners should, therefore, rest easy knowing that their assets can still be economically viable in a "greener" future.