The UK Government’s long-awaited Energy Bill and concerns over its commitment to setting clear and challenging decarbonisation targets, has put energy policy firmly back on the agenda.
However, beyond the debate of the future shape of the UK’s energy mix, there is growing recognition that the focus on addressing environmental impact, across all energy sectors, is set to increase.
High profile events, such as the Deepwater Horizon disaster and the Elgin platform gas leak, show the obvious need to monitor and minimise impact. While these may have grabbed the headlines, the day-to-day effect of extractive industries, such as oil and gas, often result in large environmental impacts over time; that are under ever greater scrutiny from investors, shareholders and customers.
Monitoring greenhouse gas (GHG) emissions in the supply chain is now routine practice in the sector, but there are a number of other environmental implications.
These include the wider implications around deforestation, biodiversity and water scarcity, all of which are increasingly relevant in an industry diversifying into other forms of energy production. From shale gas, tar sands and bio-fuels, such ventures often see operations in new, sometimes pristine environments.
But as supply chains become ever more complex, a key challenge is the expense and time it takes to collect, analyse and disseminate information relating to the environmental impact. For example, traditional practices in the sector include deploying aeroplanes with spotters aboard to visually estimate the extent, origin and trajectory of oil spills. This method of data collection is time-consuming and costly and, while it may continue to be used for some incidents, it does not allow companies to collect and share meaningful high-resolution data on an on-going basis.
So how do companies in the oil and gas sector, with their complex supply chains, address the challenge of monitoring all environmental impacts across the supply chain?
One potential strategy could see companies acquire data remotely from orbiting satellites and harness this input by using web-based technologies. This makes it possible to acquire, store and analyse near-real time data in high resolution or over vast geographical areas, taking advantage of ubiquitous web browsers and cloud-based processing and storage.
Google Maps and Street View have brought simplicity and ease of use to spatial data and such technologies can be used for supply chain environmental impact monitoring. Importantly, results or even a tailored version of the application itself can be shared with regulators, media, NGOs, shareholders, customers or those affected by an environmental impact event. The approach provides an entirely new perspective on stakeholder engagement and governance.
For example, it would be possible to track the fallout from an oil spill using remotely sensed data and allow the general public to see the development of the spill in near time, together with projected coverage, which can be overlaid with data on the steps that are being taken to minimise the spill.
While the technique can be equally applied to day-to-day environmental data, such as GHG emissions, deforestation, water scarcity and biodiversity, it is important to define the specific environmental impacts to be monitored, alongside the geographical area of interest. More often than not, this is defined by the supply chain.
This is the time to also consider the level of detail required. Often referred to as spatial and temporal resolution, this will be driven by the need to zoom into details and how frequently the data needs to be updated.
As a basic rule of thumb, the greater the spatial and temporal resolutions, the higher the cost. Once these parameters have been defined, data layers can be obtained from a range of organisations, such as NASA (North American Space Administration) and ESA (European Space Agency), and uploaded to specialist web services that take care of the data processing, display and interrogation functions.
For most organisations, the final step is to add the supply chain as a separate layer, so that each part of the supply chain can be viewed and interrogated for associated environmental impacts.
Once live impact monitoring comes into its own, such insight can be used to review historical environmental performance of the supply chain, in addition to monitoring performance and developments, as they happen. As supply chains change or grow, it may be possible to assess such changes for their historical environmental performance, as well as likely future implications.
Monitoring of high impact and rapidly changing events, such as oil spills or gas leaks, may also form part of the strategy. However, a key issue is speed, as many high impacts events happen quickly and develop over the course of days or weeks.
Data gathering and processing must, therefore, be taking place automatically. This is where the power of web systems and remotely sensed data come into play, as information can be automatically taken from satellites, processed in the cloud and delivered to web browsers in near real time. This saves costs, cuts response time and gets data to decision makers in an actionable format.
Recognising the environmental impact of its own supply chain and operations, one company making significant progress in this area is Greenergy, a major supplier of road fuel. In a move to track its bio ethanol sources, the company’s Biocarbon Tracker website now provides greater transparency and insight for a wide range of stakeholders.
The role of the supply chain in building sustainable businesses is undisputed, with significant progress already made by many organisations, including those in the oil and gas sector. However, with the complexities of a global supply chain and the broadening of energy into new sources, comes a greater need for insight.
Companies will increasingly be expected to make better-informed procurement decisions and transform such insight into a valuable communication tool that builds trust with investors, shareholders and customers. In the future, the active monitoring and dissemination of such impacts will play a key role in building successful, sustainable energy businesses.
Richard Tipper is chief executive of Ecometrica, a global provider of web-based environmental and greenhouse gas accounting software.