By Jonathan Jones, Head of Growth
Quantifying, reporting, and managing emissions can seem daunting. So how should you tackle this new and elusive challenge? Last week I spent a few days in the carbon capture capital of the world, Houston Tx, alongside the industry’s most proactive and influential leaders in the energy transition. Here, I break down my top three takeaways.
The end of dashboards
The era of the dashboard is upon us. Any and every acronym, from BOE to ROI, can be presented in pleasant shapes and colours. However, the disillusioned delegation was clear that dashboards alone would not solve the problem. To understand and manage our emissions effectively, we must focus on the underlying data.
There was a consensus among practitioners that simply reporting an emissions figure is no longer enough; moving forward, the numbers must be auditable. Several speakers referred to ‘financial grade emissions data’ which indicates the level of traceability and scrutiny operators are now expecting.
As they gather and use this data, the more mature players are beginning to recognise the value of advanced analytics of emissions. Companies are discovering that their decarbonisation activities are also uncovering efficiency savings on assets and operations e.g. by minimising methane leakage to reduce fugitive emissions, they improve pipeline quality and save significant amounts of money. In the coming months and years, we can expect massive growth in predictive and prescriptive analytics on emissions performance.
However, its not just at the operational level – verification is now a board level discussion. Companies are feeling increasing pressure to obtain trusted data and hit decarbonisation targets, particularly those that are publicly traded. Industry leaders are starting to see changes in capital allocation, whereby if a company has a reliable and verified data set, there is a more meaningful discussion to be had with investors regarding budget for sustainability initiatives. Put simply, if you can trust your insights, you can justify an investment in decarbonisation. This issue really does go right to the top.
So, are dashboards dead? No. But for the experienced community, the emphasis has shifted towards obtaining auditable and verifiable data to inform both operational and strategic decision making.
Collaboration is our new best friend
Sharing. Confiding. Exchanging. It sounds more like an FTX class action support group than it does a room full of oil and gas veterans. But the dirty secret of the industry is just how clean it wants to become, and how important collaboration will be in making that happen.
“Collaboration is our new best friend” was the resounding message. For an industry that is typically very conservative and values confidentiality, there was an encouraging openness and desire to share information and work together to solve this challenge. This applies both internally with cross functional teams and externally with other companies.
The nature of emissions data – inherently interdependent but not necessarily mission critical – is helping the industry become more collaborative. As a result, we are seeing this cooperative approach develop in both North Sea and US markets.
Could this be the catalyst for more open data within the industry? If so, there is a huge opportunity for technology platforms that enable trusted collaboration to facilitate the growing community.
The right thing to do
“50/50 by 30!” This was the stark warning issued by one of the speakers, implying that the generic target of a 50% emissions reduction by 2030 is no longer considered good enough, and that if companies don’t act decisively now, their chances of survival are 50% by 2030.
It is no secret that the penalties for non-conformance with the emerging regulations are becoming increasingly stringent. And while there was definitely a sense of tension and uncertainty around the looming SEC ruling on the disclosure of sustainability credentials, the drivers for change seemed to extend beyond just regulatory scrutiny.
Two recurrent themes were doing the right thing and survival. Senior leaders – both at operational and board level – recognise the compliance needs, but are looking beyond that towards culture, talent retention, and investment.
My takeaway here was that the industry is now starting to consider the value statement beyond compliance. For the larger companies, it is a significant risk to base their future operational state on current regulatory frameworks, which are relatively relaxed (for now) and likely to get much tighter.
For energy companies to futureproof and recruit the best talent, doing the right thing is now becoming an essential cultural value.
So how can we help?
For companies that want to embrace collaboration to address the need for secure and auditable emissions data, we have launched the Energy Transition Databox. It provides operators and service companies with trusted data that enables them to comply with environmental regulations, gain access to capital, and uphold their reputation.
We are uniquely placed to provide verifiable emissions data and actionable decarbonisation outcomes by combining decades of emissions assurance with industry leading data sharing technology, underpinned by engineering expertise in the energy sector.
In my next post, I’ll share a few simple practical steps that will hopefully help you define your solution stack and identify the best tools to support your decarbonisation journey.