The Sage Draw wind farm, which straddles Lynn and Garza counties, can power 120,000 typical American homes, but most of the electricity won’t go to the surrounding farms and towns. Instead, the biggest customer will be Exxon Mobil Corp., which will use the power to run its pumps and other equipment in the Permian Basin oil field, according to a news release this year from Ørsted, the Danish company that developed the project.
It’s part of a surprising trend in the oil industry — increasingly, companies are using renewable energy to help them wrest fossil fuels from the ground, according to the research firm IHS Markit. Some of them are doing it because they’ve promised to cut emissions from the operations, while others are doing it to lock in low prices.
Environmentalists point out that the companies are still producing fuels that cause long-term environmental damage and contribute to climate change. But IHS Markit expects the trend to continue — the firm counted 45 renewable electric projects dedicated to oil and gas production, with nearly 30 announced in 2018 and 2019. In comparison, approximately fewer than 15 projects were launched between 2000 and 2017, according to an IHS Markit report released yesterday.
“Their motivation is to benefit from the reduction in greenhouse gas emissions,” said Judson Jacobs, IHS Markit’s managing director of upstream operations. “But for them, it makes a lot of business sense, as well.”
In addition to the 250 megawatts from the Sage Draw farm, Exxon is buying 250 MW of solar power for its Permian Basin operations. Other companies are planning projects in Australia, Colombia and the Middle East, IHS Markit said (Greenwire, Nov. 30, 2018).
Most of the projects that IHS Markit identified are in the so-called upstream sector, where oil and gas are produced and prepared for transportation. Those operations typically require a lot of power for pumps, compressors and other equipment.
Oil companies often use diesel or natural gas-fired generators to power their operations in remote areas. But they’ve discovered that renewable power is a lot more reliable, Jacobs said.
The projects announced in 2018 and 2019 will reduce the industry’s carbon dioxide emissions by 3 million metric tons, according to IHS Markit’s calculations. That could help companies achieve their short-term goals of cutting their “scope 1” emissions — the pollution given off by their own production activities.
The renewable power won’t help the industry reduce other sources of emissions, or the emissions caused when people consume oil and gas as fuel, said Adrian Shelley, director of the Texas office for the consumer group Public Citizen.
“The fossil fuel companies using clean energy today will lobby against competition from wind and solar tomorrow, and that’s a problem,” Shelley said in an email. “Even though fossil fuel companies use clean energy themselves, most won’t take steps such as eliminating gas flaring to reduce their own carbon footprints and adverse health impacts.”