May 2022

Special Focus: Biofuels, Alternative Fuels and Green Petrochemicals

Overview of decarbonization pathways for the oil and gas and petrochemical industries—Part 1

This two-part article will cover the seven pathways to decarbonizing the oil and gas and petrochemical industries.

This two-part article will cover the seven pathways to decarbonizing the oil and gas and petrochemical industries. Part 1 will detail sustainability and discuss decarbonization pathways through green and blue hydrogen (H₂); biofuels, renewable fuels and e-fuels; and the circular carbon cycle. Part 2—to be published in the June issue of Hydrocarbon Processing—will discuss energy efficiency, new technologies, electrification and carbon capture.

The need for decarbonization

Carbon dioxide (CO₂) is a greenhouse gas (GHG) that traps heat in the Earth’s atmosphere, contributing to global warming. To achieve the goal of limiting global warming to 1.5°C above pre-industrial temperatures, it is necessary to significantly reduce CO₂ emissions. By 2030, the European Union (EU) seeks to reduce the region’s CO₂ emissions to 55% below 1990 levels (fit for 55), and, by 2050, to be carbon neutral. The U.S. has set goals of reducing its CO₂ emissions by 2030 to 50% lower than 2005 levels, having carbon-free utility power generation by 2035 and achieving carbon neutrality by 2050. Major integrated oil companies have announced goals to reduce CO₂ emissions by 35%–40% by 2030 and to be carbon neutral by 2050. The task ahead is challenging and will require global commitments from governments and industry, along with the development of new technology. The pathways for decarbonization will be different for various industries. This article will discuss some of the pathways toward decarbonization for the oil and gas and petrochemical industries.

Burning natural gas [methane (CH₄)] creates a lower heating value (LHV) of 58 kg CO₂/1 MMBtu.^a Every 100 MMBtu/hr  (LHV) of CH₄ burned on a fired heater will generate 50,000 tpy of CO₂. This is a good rule of thumb for evaluating the impact of opportunities to reduce CO₂.

To reach the goal of carbon neutrality, it is necessary to reduce Scope 1, Scope 2 and Scope 3 CO₂ emissions. These emissions are defined as:

• Scope 1 (direct CO₂ emissions): These are the direct result of burning fuels like natural gas, offgas and fuel oil for process heating, and for generating steam and power at process units.
• Scope 2 (indirect CO₂ emissions): These result from imported energy, like purchased steam from neighboring industries or purchased electric power from the power grid.
• Scope 3 (CO₂ emissions from the use of product): This is the CO₂ produced by using the product. For an oil company, this is the CO₂ from car and truck tailpipe emissions. For integrated oil and gas companies, 85% of their CO₂ emissions can be Scope 3.

CO₂ has a global warming potential (GWP) of 1, which is a reference standard. CH₄ is also a GHG, and has a GWP of 86 for a 20-yr duration and a GWP of 26 for a 100-yr duration.^a,1 Eliminating 1 t of CH₄ leaks has the heat-trapping-reduction equivalent to eliminating 86 t of CO₂. It is a much easier task to stop CH₄ leakage than to capture CO₂ from the atmosphere. A key priority is reducing CH₄ leakage from abandoned oil wells, gas wells, pipelines, LNG plants and landfills. At the COP26 UN climate change conference, more than 100 nations signed a pledge to reduce CH₄ emissions by 30% by 2030 vs. 2020 levels. Nitrous oxide and ozone are the other GHGs. The CO₂ equivalent (CO₂e) of a stream is the combined CO₂ impact of all the GHGs in the stream. Reducing CH₄ emissions will have an immediate impact on reducing global CO₂e because of its high GWP.

What are the sector sources of CO₂e?

The U.S Energy Information Agency (EIA) reported that, in 2020, the U.S. generated 4.6 B metric t of CO₂e from burning fossil fuels with petroleum (45%), natural gas (36%) and coal (19%) (FIG. 1). In 2020, 65% of CO₂ emissions from fossil fuels came from the transportation (36%) and industrial sectors (29%). Opportunities to reduce the carbon footprints of the transportation and industrial sectors include:

• Transportation: Producing and selling less carbon-intensive fuels, as well as using renewable and biofuels, renewable electric power, and green and blue H₂
• Industrial: Improving energy efficiency; utilizing new and improved technologies; using electrification with renewable power; using green and blue H₂; and incorporating carbon capture, utilization and storage (CCUS) technologies.

In FIG. 1, 32% of CO₂e emissions in the U.S. were from the generation of commercial power. Additionally, while coal generated 19% of the commercial power, it accounted for 54% of total CO₂ emissions from power generation. There are opportunities to replace fossil-fuel-generated electricity with renewable power like wind, solar and geothermal.²

The seven pathways to reducing carbon footprints

The seven pathways to reducing carbon footprints include a combination of several methods. The ways to reduce Scope 1 and Scope 2 emissions (direct and indirect CO₂ emissions from fossil fuels) include the following pathways:

1. Energy efficiency/stopping CH₄ leaks: Improving energy efficiency in existing and new facilities, maintaining energy recovery equipment, and stopping routine flaring while minimizing flaring on startup and shutdown
2. Technology: Utilizing new processes and catalysts that will improve yields and reduce energy intensity
3. Electrification: Electrifying process equipment using renewable electric power (i.e., wind, solar, hydroelectric, geothermal, nuclear)
4. CCUS: Providing cost-effective carbon capture with the utilization and storage of captured CO₂ (adding CCUS to biofueled equipment to achieve negative CO₂ footprints)
5. Green and blue H₂: Producing, using and selling low-carbon H₂.

The good news is that operating companies and supporting engineering companies in the oil and gas and petrochemical industries already have the technology and assets for onshore and offshore wind, blue and green H₂ generation, and CO₂ sequestration and can convert refinery units to make renewable fuel from biofeedstocks.

Ways to reduce Scope 3 emissions in the oil and gas industry

As the world begins to use more renewable energy, the use of fossil fuels will begin to reduce. Oil and gas companies will transition to become energy providers that will sell less petroleum-based fuels and begin to sell fuels with low carbon intensity.

Pathway six reduces carbon footprints for Scope 3 emissions by using biofuels, renewable fuels and e-fuels. These include the following:

• Biofuels and renewable fuels, such as renewable diesel and sustainable aviation fuel (SAF)
• Synthetic e-fuels, like e-gasoline, which are made from green H₂ and captured CO₂
• Low-carbon LNG using CCS during natural gas treatment and the electrification of LNG refrigeration compressors
• Renewable electricity, such as wind (onshore/offshore) and solar photovoltaic (PV) electricity production
• Green and blue H₂.

Ways to reduce Scope 3 emissions for petrochemicals

The seventh pathway reduces Scope 3 carbon footprints, especially for plastics and chemical production, through a circular carbon pathway, including:

• Recycling waste plastics: Creating a circular carbon economy by either mechanical reprocessing or chemical recycling (e.g., pyrolysis, gasification) of waste plastic
• Use of renewable feedstocks: Using renewable feedstocks like bio-naphtha to produce the base chemicals ethylene and propylene to decrease carbon intensity
• Synthetic chemicals production: These include chemicals like ethanol and methanol produced using renewable H₂ and captured CO₂.

The following will detail the decarbonization pathways of green and blue H₂, along with the use of biofuels, renewable fuels and e-fuels. It will also discuss following a circular carbon pathway.

H₂ as an energy carrier (the role of green and blue H₂ as decarbonization pathways)

H₂, with its low- or zero-carbon footprint, will play a key role as a fuel—specifically, in the production of renewable fuels, biofuels and e-fuels. It will also enable e-chemistry by the hydrogenation reaction with captured CO₂. In a decarbonized world, H₂ demand could increase by a factor of 6 times–10 times the current demand. Green, blue and pink H₂ will fill this increased demand.

Most H₂ produced today is gray H₂, which is made from CH₄ in a steam methane reformer (SMR). Gray H₂ has a high CO₂ footprint and alternate production methods to make blue and green H₂ are required. Blue H₂ is also made from CH₄ but has CO₂ capture added on the outlet of the SMR. Green H₂ does not use CH₄ as a feedstock and is made by the electrolysis of water, using renewable energy in an electrolyzer (70% efficiency). Electrolyzers are classified as an alkaline, proton exchange membrane (PEM) and solid-oxide electrolysis cell. A PEM electrolyzer requires 50 MW of electricity to produce 1 t of green H₂.^3,4 FIG. 2 is a schematic of a PEM electrolyzer, and FIG. 3 is a schematic of a PEM fuel cell. In a PEM electrolyzer, the H⁺ ion migrates to the cathode where H₂ is produced and the oxidation of water to oxygen occurs at the anode. In an alkaline electrolyzer, the OH- ion migrates to the anode.

The following is a partial listing of H₂ production methods. The carbon intensity (kg CO₂/ kg H₂) is shown only as a way of comparing the different methods, and there is a lot of discussion on the absolute values.⁵ A partial list of H₂ production methods includes:

• Turquoise H₂: Electric plasma pyrolysis of CH₄ to 2 H₂ + 1C (uses nuclear power)
• Green H₂: Electrolysis of water using renewable electricity—low CO₂ footprint (0.4 kg CO₂/kg H₂ for wind and 1.5 kg CO₂/kg H₂ for solar)
• Pink H₂: Electrolysis of water using nuclear energy for power—no CO₂ footprint (0 kg CO₂/kg H₂)
• Gray H₂: The use of CH₄ in an SMR with no CO₂ capture (9 kg CO₂/kg H₂)⁶
• Blue H₂: The use of CH₄ in a reformer with carbon capture

° CH₄ in an SMR with CCS—capturing CO₂ from the reformer outlet (4.6 kg CO₂/kg H₂)⁵

° CH₄ in an autothermal reformer with CCS—capturing CO₂ on outlet of reactors (4 kg CO₂/kg H₂).

The relative cost to produce H₂ is $2/kg for gray H₂, $3/kg for blue H₂ and $5/kg for green H₂.^7,8 The U.S. Department of Energy (DOE) has announced the 1-1-1 H₂ Earthshot, which has the goal of producing green H₂ at a cost of $1/1 kg H₂ within one decade. With improvements in electrolyzer efficiency by 2030, the cost to produce green H₂ will be $1/kg using green power from the grid at $20/MWh ($20/MW × 50 MW/t). By 2050, it is estimated that 60% of H₂ will be produced by electrolysis and 40% by natural gas in SMRs with CCUS. By 2050, H₂ generation could consume up to 20% of the power generated in the world.⁹

The many uses of H₂

As a fuel, H₂ can be burned directly in fired heaters. It can also be blended up to a 30% H₂ mix with natural gas as a fuel for gas turbines. Technology companies are developing gas turbines that can burn up to 100% H₂.

H₂ can also be blended up to 20% into existing natural gas pipelines without having to change out residential appliances like hot water heaters, furnaces and gas stoves. As the demand for H₂ increases, new H₂ pipelines will be built, and some existing natural gas pipelines can be converted to dedicated H₂ pipelines.

Green H₂ should first be used in the chemical and refining processes that require H₂ for hydrotreating and desulfurization, followed by its use in producing synthetic fuels. Replacing gray H₂ with green H₂ will reduce the Scope 3 CO₂ footprints of refining and chemical products. Green H₂ must be used wisely, since it is produced by using renewable power at a 70% conversion efficiency—there is a 30% loss of renewable energy in the electrolyzer.

H₂ is an energy carrier that can be moved by pipelines and trucks. It can also be converted into green ammonia (NH₃) or green methanol, and then transported by pipelines and ships. Green NH₃ can be converted (dissociation) back into green H₂ at its destination. H₂ can be blended into existing natural gas pipelines and can be extracted from the H₂/natural gas mix at an endpoint by using pressure swing adsorption and membrane technology. A new technology is liquid organic H₂ carriers, which bond H₂ to organic liquid for transport by pipelines. Since renewable wind and solar power may be generated at remote locations, converting power into H₂ for transport can help reduce future demand on the electric grid. H₂ can also be used as storage for renewable electricity, when grid power demand is low, by converting excess renewable power into H₂ for storage. The H₂ can be used or can be converted back into electric power when needed; however, there is an efficiency loss in the H₂ fuel cell.

An H₂ fuel cell can convert H₂ back into electricity. There are PEM fuel cells and solid-oxide fuel cells. The PEM fuel cell takes H₂, which is oxidized at the anode, and oxygen (from air) that is reduced at the cathode and generates electricity and water. The reaction in the fuel cell is 2 H₂ + O₂ = 2 H₂O + electricity. This is the reverse of what an electrolyzer does—i.e., using electric power and water to make H₂ and oxygen. A fuel cell has an efficiency of 60%.¹⁰ Converting electricity to H₂ and then converting H₂ back to electricity has a double efficiency hit, resulting in only 42% (0.7 × 0.6) efficient use of the renewable electric power.

H₂ fuel cell electric vehicles (FCEVs) will have an important role in reducing transportation emissions of electric cars, forklifts, trucks, buses and trains. Many new forklifts are electrically driven by using H₂ fuel cells. Refueling H₂ vehicles takes half the time of electric vehicle battery recharging. Battery manufacturers are working to reduce charge times. Just as an electrical recharge network along highways is needed, there will also be a need for H₂ refilling stations for vehicles.

Ships can also use green NH₃ as a fuel for long-distance trips—Maersk plans to launch the world’s first container vessel operated on green NH₃ in 2023. Green NH₃ is made from green H₂ and green nitrogen by the Haber-Bosch process. The air separation unit providing nitrogen is driven by renewable power. Coal-fired power plants are also planning tests to evaluate burning up to 20%–50% NH₃ as a fuel.

CO₂ e-chemistry: Power-to-X (P2X)

P2X or CO₂ e-chemistry uses renewable electric power to produce green H₂ and reacts the H₂ with captured CO₂ to make low-carbon gaseous fuels (H₂ and CH₄), liquid fuels (methanol and synthetic fuels) and chemicals [NH₃ and olefins via the methanol-to-olefins (MTO) reaction]. Using renewable electric power to make H₂ accounts for the “power” or the “e” in the technology name. Green H₂ reacts with captured CO₂ to make syngas, which is a mixture of carbon monoxide (CO) and H₂. Using Fischer-Tropsch (F-T) chemistry, the syngas can then be converted into organic chemicals and synthetic fuels like methanol, ethanol, e-gasoline, renewable diesel and SAF. The methanol can then be converted to olefins by using MTO technology or into e-gasoline by using methanol-to-gasoline technology. The synthesis reactions to produce methanol from green H₂ and CO₂ are:

• Step 1 (reforming): H₂ + CO₂ = CO + H₂0
• Step 2 (syngas F-T reaction): CO + 2H₂ = CH₃OH (methanol)
• Overall reaction: CO₂ + 3H₂ = CH₃OH + H₂O.

Synthetic natural gas (SNG) can be produced by reacting green H₂ and captured CO₂. The reaction is 80% efficient, so it produces less energy than is put in with the renewable H₂. The Sabatier reaction is CO₂ + 4H₂ = CH₄ (SNG) + 2H₂O. This is referred to as carbon circularity. The reaction consumes a lot of H₂, and a better use of valuable green H₂ is to make synfuels or to use it in chemical and refining operations that require H₂.

Producing synthetic fuels uses a lot of valuable green H₂ and renewable power. Dry reforming of methane is another route to make syngas from CO₂. Dry reforming of methane uses CH₄ (not H₂) to react with captured CO₂ to produce CO and H₂. The dry reforming reaction is 1 CO₂ + 1 CH₄ = 2CO + 2 H₂. This reaction does not require green H₂ to convert the CO₂ into CO. The super dry reforming (SDR) process is being developed, which can react 3 moles of CO₂ with 1 mole of CH₄. The SDR reaction is 1 CH₄ + 3 CO₂ = 2 H₂O + 4 CO.¹¹ There is a lot of ongoing research to produce low-carbon synfuels from captured CO₂. Using gas fermentation, CO can be converted into ethanol; or by using F-T chemistry, syngas is then converted into synthetic fuels.

Renewable fuels, biofuels and e-fuels: The oil and gas industry’s pathway to reduce Scope 3 CO₂ emissions

For the oil and gas industry to reduce Scope 3 CO₂ emissions, it must transition to becoming energy providers that produce and sell less carbon-intensive fuels like renewable power, green and blue H₂, renewable fuels, biofuels and synthetic e-fuels. The Low Carbon Fuel Standard (LCFS), created by the California Air Resources Board (CARB) in 2009, provides attractive credits to producers of low-carbon fuels. California’s goal is to replace petroleum-based diesel with renewable diesel by 2035.

Demand for petroleum-based gasoline, diesel and jet fuel will decrease. Some energy consultants have predicted that world oil production will peak by 2031 and will gradually decrease by 40%–50% by 2050. Some refineries will shut down or reduce crude throughput and will convert some of their processing units (e.g., hydrocracker and fluid catalytic cracking units) to hydrogenate renewable feedstocks to produce renewable diesel, bio-naphtha and SAF. These low-carbon fuels will be required in addition to the electrification of vehicles (e.g., battery electric vehicles and H₂ FCEVs) to meet the world’s growing transportation demand. Renewable feedstocks have a high level of unsaturates and oxygen requiring hydrogenation, resulting in high H₂ demand and high heat generation. Refineries converting to processing renewable feedstocks will need more H₂ and may have to add additional heat removal capacity or operate at reduced rates.¹²

Renewable fuels have a lower carbon intensity than fossil fuels because they are produced from renewable resources. Renewable fuels include biofuels, green H₂ and synthetic fuels. Renewable biofuels are produced from oil seed crops like soybean and canola; from tall oil, corn oil, rapeseed and sugar cane; from lipids like vegetable oils, used cooking oil, animal fats and algae; and from cellulosic material, such as crop residues and wood biomass.¹³

Biofuel feedstock is derived from living matter that removes CO₂ from the atmosphere as it grows. When the feedstock is converted into biofuel and burned, CO₂ is released. This released CO₂ is then removed from the atmosphere when the next crop is replanted (renewed). This CO₂ balance is called the “circular carbon cycle” and can result in close to net-zero CO₂ emissions for biofuels. There is a small CO₂ footprint associated with farming and processing feedstocks that prevents reaching net zero. If the CO₂ generated from burning biofuels is captured by CCUS and the CO₂ does not go back to the atmosphere, then using biofuels can have a negative CO₂ footprint, as CO₂ is being removed from the atmosphere. The use of biofuels with CCUS has a bigger impact on decarbonization.

Renewable diesel meets all the specifications for petroleum-based diesel and is produced by hydrotreating non-petroleum feedstocks, such as waste vegetable oils, animal fats or biomass. The triglycerides are converted to normal paraffins by hydrotreating them in pressurized reactors to produce liquid green fuels like renewable diesel, which is chemically like petroleum-based diesel. Renewable fuels produced by hydrotreating vegetable oils are often called hydrotreated vegetable oil (HVO) fuels. Renewable diesel can be a 100% replacement for petroleum-based ultra-low-sulfur diesel. Renewable diesel produced by using renewable energy has a carbon intensity that can be 70% lower than petroleum diesel.^13,14

Biodiesel is produced by reacting vegetable oils and animal fats with an alcohol like methanol or ethanol. This transesterification reaction converts the triglycerides into a mixture of alkyl (methyl, ethyl) esters of long-chain fatty acids. Biodiesel is also called fatty acid methyl ester.¹² It contains oxygen, has a higher cloud point and poorer cold flow properties than petroleum diesel, and is limited to blending up to 20% with petroleum diesel.¹⁵

SAF made from waste cooking oil and plant oils reduces CO₂ emissions by 80% vs. petroleum jet fuel. Planes can burn a mixture of 50% SAF and 50% conventional jet fuel. Testing is ongoing to increase the allowable usage up to 100% SAF.

Biomass fuels, such as ethanol, can be made from food crops like corn and sugar cane, and biodiesel can be made from soybeans. Using these feedstocks for fuel production competes with the food chain. Research to develop second-generation cellulosic fuels is continuing to use the cellulosic parts of crops (e.g., corn stover or sugar cane bagasse) to produce second-generation biofuels that will not compete with the food chain.

Microscopic algae—or microalgae growing in water—can use the sun’s energy to efficiently combine CO₂ with water to create biomass through photosynthesis. The oil-rich microalgae strains can be processed into biodiesel, green diesel, gasoline and jet fuel. There is significant research exploring the usage of microalgae, since this route would not compete with the food chain.

Renewable natural gas (RNG)—also called biomethane—is produced from dairy farm biomass, waste food and landfills by anaerobic digestion of the organic biomass in an oxygen-free environment. The biogas produced from the anaerobic digester contains 60% CH₄ and 40% CO₂. The CO₂ must be removed before the RNG can be put into natural gas pipelines. Biomethane made from biomass with CO₂ capture by CCS will play a role in reducing the need for natural gas. CCUS will be key in the production of biogas.

Synthetic fuels (or e-fuels) are produced by reacting green H₂ made by electrolysis with captured CO₂ using F-T chemistry to make hydrocarbon fuels like e-methanol, e-ethanol, e-gasoline and SAF.

Circular economy pathway (recycled plastics, renewable feedstock and synthetic chemicals)—The petrochemical industry’s pathway to reducing Scope 3 emissions

To reduce Scope 3 emissions, chemical producers must invest in the recycling of single-use plastics and must also change to renewable feedstocks to make base monomers and look at new less-carbon-intensive technologies for grassroot chemical plants.

More than 75% of plastics produced are discarded after one use and end up in landfills and oceans. In 2018, the U.S. produced 35 MMt of plastics, and it is estimated that only 9% was recycled.¹⁶ The American Chemistry Council (ACC) member companies established a program called Roadmap to Reuse. The initiative’s two goals were to ensure that 100% of U.S. plastics packaging will be made to be recyclable or recoverable by 2030, and to also ensure that 100% of U.S. plastic packaging will be designed to be reused, recycled or recoverable by 2040. Internationally, nearly 50 global companies have joined the Alliance to End Plastic Waste, which is an industry-supported non-governmental and non-profit organization based in Singapore. The Alliance’s goal over the next 5 yr is to develop and deploy solutions to minimize and manage waste and to promote post-use solutions for plastics.

Most waste plastics end up in landfills, with only a small percentage being burned for heating value, with essentially no CO₂ capture. The need to stop landfilling and to begin recycling waste plastics is key to reducing Scope 3 emissions. Industry must play a key role in educating consumers and in forming partnerships with plastic recycling companies. The two primary methods for plastic recycling are mechanical recycling and chemical recycling (i.e., advanced recycling).

Mechanical recycling involves plastics collection, sorting by plastic type, cleaning, shredding, melting and re-pelletizing the plastics into new pellets. This process is very effective for single-type plastics like polyethylene (PE) and polypropylene.¹⁷

Chemical recycling is used for more complex plastics and involves breaking down the plastics to their basic components in a liquid or gaseous state for further processing. Pyrolysis and gasification are the two most common methods. Many petrochemical companies are actively working on both approaches.

Pyrolysis can convert waste plastics into plastic pyrolysis oil and plastic pyrolysis gas. After treatment and removal of oxygenates, the pyrolysis oil can be converted to diesel fuel or used as feedstock in an ethylene cracking furnace. Companies are running tests using 5%–7% pyrolysis oil from waste PE plastic as feed to an ethylene furnace.

Gasification can convert waste plastics into syngas (CO and H₂). F-T chemistry is then used to convert the syngas to methanol, ethanol and synthetic fuels, as well as into chemicals like ethylene and propylene. Gasification can occur at low pressures and high temperatures (1,000°C–1,200°C), with the syngas after cleanup containing approximately 39% H₂, 43% CO, 13% CO₂ and 5% nitrogen.¹⁸ Research at universities is ongoing to use hydrocracking to break down plastic shreds into smaller carbon molecules that can be used to produce jet fuel, diesel and lubricants. One process being developed uses supercritical water to convert waste plastics into liquids and gas that can be further refined and upgraded to produce new virgin plastics.¹⁹

In the U.S., the National Renewable Energy Laboratory (NREL) is leading efforts to study hydrogenation over catalyst to break the C-C bonds and convert the plastic polymer back into liquid alkanes like ethane that can then be used to make ethylene. The NREL is also trying to develop recyclable-by-design polymers that would have a closed-loop lifecycle. This would require designing a monomer structure that can efficiently polymerize to the desired polymer and then undergo selective depolymerization to recover the monomer.¹⁷

Industry must look at using renewable feedstocks in olefin plants to produce ethylene and propylene. Renewable naphtha and renewable diesel made from biobased sources like wood biomass or hydrotreated waste oils, fats, tall oil or tallow could be used as feed for ethylene plants. Using biofeedstocks for crackers would significantly reduce Scope 3 emissions of ethylene and its derivatives. Research is being conducted on combining pyrolysis and catalytic cracking for the direct upgrading of polyolefin pyrolysis vapors over catalysts in vapor phase to produce base chemicals (C₂–C₄ olefins). This approach has fewer steps than the current approach of pyrolysis of plastic waste, treatment of the pyrolysis oil and then cracking it in an ethylene furnace. The process has the possibility of reducing energy requirements and CO₂ footprint in waste plastics recycling.²⁰

In addition to using recycled plastics and biobased feedstocks, the chemical industry can use renewable H₂ and captured CO₂ to make synthetic chemicals (such as ethanol and methanol) and olefins (such as ethylene and propylene) by using the MTO process.

The key to success of the circular economy begins with the consumer, who must save single-use plastic bottles for recycling. The consumer is the first link in this circular economy.

Takeaway: The seven pathways to decarbonization

The oil and gas industry will rebrand itself as an energy provider and will transition to selling low-carbon-intensity energy like renewable wind and solar power, green and blue H₂, low-carbon LNG, biofuels, renewable diesel, e-fuels, e-gasoline and SAF.

Improving energy efficiency is the cheapest way to reduce CO₂ emissions. For new facilities or major plant expansions, new technologies are being considered that have better energy efficiency and lower carbon intensity. For catalyst changeouts, producers should consider newer formulated catalysts for higher yields and lower energy intensity. Electrification of transportation and industry with renewable power will play key roles. CCUS will be required for processes that are hard to decarbonize.

The following is a summary of the seven pathways to decarbonization. The last three pathways support sustainability and were discussed in this article. The first four pathways supporting decarbonization will be covered in Part 2, which will be published in the June issue.

Reducing Scope 1 and Scope 2 CO₂ emissions includes the following:

1. Energy efficiency: Improving energy efficiency of facilities, building new more efficient facilities, and maintaining energy recovery equipment. Producers should stop routine flaring and should minimize flaring at startup and shutdown. Companies should also use drones to detect and track methane leaks.
2. Technology: Using new processes and catalysts to improve yields and reduce energy intensity.
3. Electrification: Electrifying process equipment by using renewable electric power (e.g., wind, solar, hydro and nuclear). This includes investing in, utilizing and selling renewable power, as well as investing in battery storage.
4. CCUS: Utilizing cost-effective CCUS of captured CO₂. Producers should join regional CCUS networks for economy of scale and use captured CO₂ in their production of e-fuels.
5. Green and blue H₂: Producing, using and selling low-carbon H₂, and utilizing H₂ as an energy carrier.
6. Low-carbon fuels: The oil and gas industry’s pathway to reduce Scope 3 emissions is producing and selling energy products with low carbon intensity, such as:

• Biofuels and renewable fuels (e.g., renewable diesel and SAF)
• Synthetic fuels (P2X), such as e-fuels and e-gasoline made from green H₂ and captured CO₂
• Low-carbon LNG through CCS on natural gas feed and the electrification of LNG plant compressors
• Renewable electricity like wind (onshore/offshore) and solar PV electricity
• Green and blue H₂.

7. Circular pathway: The pathway to reduce Scope 3 emissions for the petrochemical industry includes the following:

• Recycle waste plastics: Minimizing the circular carbon cycle by either mechanical reprocessing or chemical recycling (pyrolysis, gasification) waste plastics
• Use renewable feedstocks: Using bio-naphtha, hydrogenated vegetable gasoil (diesel) and plastic pyrolysis oil to produce the base chemicals ethylene and propylene
• Make synthetic chemicals: Producing ethanol and methanol using renewable H₂ and captured CO₂.

The good news is that the oil and gas and petrochemical industries have the technology and assets needed for offshore wind, blue/green H₂ production, and CO₂ capture and storage, and have refinery units and technology available to produce renewable fuels. Industry is prepared to begin the energy transition journey to a lower-carbon world.

Part 2

In the June issue, Part 2 of this article will cover the first four pathways to decarbonization: energy efficiency, new technology, electrification and CCUS (including uses of CO₂). HP

NOTE

   ^a  Calculated using the LHV of methane of 21,500 Btu/lb; 1 mol CH₄ burns to 1 mol CO₂

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