In 2007, we have seen that being a pioneer in implementing new technology can bring problems and setbacks. Problems with the cooling system on Snøhvit have resulted in more flaring and higher carbon dioxide emissions than expected. In addition, we experienced the biggest ever oil spill in connection with the loading of a tanker on the Statfjord A platform in the North Sea.
All our activities, from exploration for oil and gas through construction and operation of facilities to end use of our products, have the potential to affect the environment and social communities. The impact may be due to emissions, discharges, land use and use of limited natural resources, threatening biodiversity, cultural heritage, human health and welfare. Impact on the environment is determined by the state and capacity of the area affected, type of activity, technology applied and operational standards.
Environment and climate
Environment and climate
The UN Intergovernmental Panel on Climate Change (IPCC) has provided evidence that the world is already experiencing the effects of man-made impacts on the global climate. Climate change has become one of the most important issues on the political agenda all over the world.
StatoilHydro recognises that there is a link between the use of fossil fuels and man-made climate change and our climate policy takes into account:
- the need for proactively combating global climate change
- the need to increase the efforts on renewables and clean technology
- our ambition of maintaining StatoilHydro’s position as industry leader on sustainable development
Pioneer in carbon capture and storage
Our experience from more than ten years of operation of carbon capture and storage (CCS) has been important in creating a world-wide recognition of CCS as crucial for combating global warming, and the policy and regulation to allow for large scale deployment.
The planning of large scale carbon capture at Mongstad CHP is well underway. The Mongstad carbon capture demonstration facility (TCM) is going ahead with new industrial partners taking over part of the ownership from the Norwegian State in the Joint Industry Partnership. This project is instrumental in developing carbon capture technologies at a new level.
Being a pioneer in implementing new technology can also bring problems and setbacks. At Snøhvit, the capacity of the LNG plant has temporary been limited to 60% due to difficulties with the cooling system, resulting in more flaring and emissions of carbon dioxide than planned. Emission permits for the additional emissions have been applied for. One result is that we are not able to account for planned emission reductions from capture and storage of carbon dioxide in 2007. The Halten carbon capture, storage and enhanced oil recovery project undertaken jointly with Shell International was terminated late in 2007 since it was not economically feasible under the current framework.
Expertise and advisory activities
Carbon Capture and Storage was recognised by many countries in 2007 as a key option to combat global climate change. StatoilHydro has contributed with experience and expertise and been engaged in advisory activities related to EU directives for CCS approval and inclusion in the EU emission trading system. Achieving acceptance for CCS as eligible for CDM credits has been promoted, but due to resistance from some states this is still under consideration within the framework of the UNFCCC.
Offshore wind power
StatoilHydro is engaging in technology development and demonstration of offshore wind power. The potential for future offshore wind power production is large, but there are still technological and commercial challenges to scale this to an industrial level. Through a StatoilHydro venture we have invested nearly NOK 1.2 billion in 25 promising companies in the energy sector, and are actively engaged in their development.
Biofuels from 1999
We started selling biofuels in Sweden in 1999, and this type of fuel is now available at service stations in Sweden, Denmark, Norway, Latvia, Lithuania, Estonia and Poland. Overall, our biofuels sales in 2007 helped reduce carbon dioxide emissions by 167,000 tonnes compared to the corresponding use of ordinary fossil fuels.
In August 2007, StatoilHydro acquired a 42.5% stake in a Lithuanian production facility, Mestilla, for rapeseed-based biodiesel production, and we have entered into collaboration with Petrobras in Brazil on sustainable biofuel production. Preliminary sustainability criteria for bio-fuel trading have been determined. We have started a comprehensive review of environmental and social challenges to ensure sustainability and quality in all parts of the life cycle of the product.
Emissions trading and the Kyoto mechanisms
In 2007 it was decided to include Norwegian oil and gas production in the EU emissions trading system (ETS) from 2008, and that Norway would adopt the ETS scheme from the same date. StatoilHydro has an emission trading organisation that handles the obligations relating to the ETS system for all facilities operated by StatoilHydro.
In addition, StatoilHydro works with business development through projects eligible for CDM credits according to the rules of the Kyoto Protocol. Our projects are based on StatoilHydro’s technology and expertise in reduction of flaring, energy efficiency, combined heat and power plants and new energy solutions. The target related to these activities is commercial, but they also provide additional gains, such as technology transfer and reinforced cooperation with partners in other countries.
Reducing carbon dioxide emissions
Carbon dioxide emissions increased in 2007 compared to 2006 due to the delayed start-up of carbon storage on Snøhvit and a somewhat reduced storage of carbon dioxide on the In Salah field in Algeria compared to planned levels. We expect lower emissions when these fields reach their targeted levels for storage of carbon dioxide and the combined heat and power plant in Mongstad is put into operation.
Carbon dioxide emissions have increased from 12.9 million tonnes in 2006 to 14.6 million in 2007. The main reason for the increased CO2 emissions is the extraordinary flaring at the Snøhvit plant at Melkøya as a result of start-up problems.
The emissions of carbon dioxide per ton of oil and gas produced from our operated fields correspond to 39% of the industry average. Changes in laws regulating greenhouse gas emissions could cause us to incur additional expenditure for pollution control equipment.
Environmental management
Our environmental management system is an integrated part of the overall management system, and is certified according to environmental standard ISO 14001. We identify the most important environmental aspects of each facility and set targets for improvement.
Emissions to sea
We monitor our emissions continuously, and the low contents of oil in discharged water from many of our facilities show that we are doing increasingly better. The average emissions of oil in water from StatoilHydro's installations on the NCS were less than 10 mg/l in 2007. Several modification projects for further reduction of these emissions are being implemented.
We perform extensive environmental monitoring, both through statutory environmental examinations and other measures, such as SERPENT (Scientific and environmental partnership), where available ROV (remotely operated vehicles) capacity is being used in environmental testing in connection with exploration drilling. The results from our environmental monitoring show that it is in the immediate proximity of our platforms that some of the substances we discharge can be found.
Reducing carbon dioxide emissions
Carbon dioxide emissions increased in 2007 compared to 2006 due to the delayed startup of carbon storage on Snøhvit and a somewhat reduced storage of carbon dioxide on the In Salah field in Algeria compared to planned levels. We expect lower emissions when these fields reach their target levels for storage of carbon dioxide and the combined heat and power plant in Mongstad is put into operation.
Carbon dioxide emissions have increased from 12.9 million tonnes in 2006 to 14.6 million tonnes in 2007. The main reason for the increased CO2 emissions is the extraordinary flaring at the Snøhvit plant at Melkøya as a result of start-up problems.
The emissions of carbon dioxide per tonne of oil and gas produced from our operated fields correspond to 39% of the industry average. Changes in laws regulating greenhouse gas emissions could cause us to incur additional expenditure for pollution control equipment.
Environmental management
Our environmental management system is an integrated part of the overall management system, and is certified according to environmental standard ISO 14001. We identify the most important environmental aspects of each facility and set targets for improvement.
Emissions to sea
We monitor our emissions continuously, and the low contents of oil in discharged water from many of our facilities show that we are continuously improving. The average emissions of oil in water from StatoilHydro’s installations on the NCS were less than 10 mg/l in 2007. Several modification projects for further reduction of these emissions are being implemented.
We perform extensive environmental monitoring, both through statutory environmental examinations and other measures, such as SERPENT (Scientific and Environmental partnership), which uses available ROV (remotely operated vehicles) capacity for environmental testing in connection with exploration drilling. The results from our environmental monitoring show that it is in the immediate proximity of our platforms that some of the substances we discharge can be found.
Reduction of emissions from offshore loading of oil
StatoilHydro and the industry have for several years worked to reduce the emissions of non-methane VOC (volatile organic components) resulting from offshore loading of oil. In 2007, equipment was installed on one new ship, resulting in enough ship capacity with equipment for removal of non-methane VOC in place, but due to operational circumstances full capacity has not always been available. In addition the operational regularity of the equipment itself has not been fully satisfactory. In 2007, the reduction in emissions was 45,000 tonnes, which was 30% lower than the target. The industry is now exploring improvement initiatives.
In addition a total reduction of 17,800 tonnes of non-methane VOC from floating storage and production ships was achieved (Åsgard, Norne and Njord) in 2007.
Water resource management
We aim to increase our water efficiency, minimise pollution and actively endeavour to improve the water situation in communities where we are located. This will be an important contribution to sustainable water resource management.
Requirements for sustainable water resource management have been included in our governing documents. Guidelines for fulfilling these requirements and supporting business decisions are under development, including for the use of the "Global water tool" issued by the World Business Council for Sustainable Development.
Biological diversity
Biological diversity is a key element of sustainable development, and also a key component of our environmental policy. It is an established principle that we seek to maintain biological diversity and important ecosystems.
This has been a focus area in several of our international projects in 2007. Marine mammals and seabirds were mapped on the Belgica Bank off the coast of East Greenland, and observations were carried out of marine mammals and sea turtles in the Rovuma Basin in Mozambique in connection with the collection of 2D seismic data in 2007. The results were used as the basis for the environmental management of the operations. Addressing the issue of biodiversity is also a major challenge in our oil sands operations in Canada.
Oil spill response and accidental discharges
In 2007, we established principles for oil spill response in relation to our operations. In addition, we have continued an extensive research and development portfolio for adaptation of our oil spill response to arctic areas.
On 12 December 2007, we experienced our biggest ever oil spill to date when approximately 4,400 standard cubic metres of oil were accidentally discharged into the sea during the loading of a tanker on the Statfjord A platform in the North Sea. An extensive emergency response organisation was rapidly mobilised, including four oil spill response vessels, monitoring by planes and helicopters and the taking of samples and observations in order to assess the harm to the environment. As soon as the weather conditions permitted, attempts were made to collect oil, but the oil slicks were thin and the oil quickly disintegrated into small droplets and mixed with the seawater. A few days after the oil spill, it was not possible to observe any remaining oil. We take a very serious view of this incident. Immediate measures were implemented and two comprehensive investigations have been carried out. Implementation of corrective actions based on the investigation findings is done or ongoing. To prevent similar accidents in future, learning from this incident throughout the organisation and across operating assets will be a key priority in 2008.
