April 25, 2024
Emissions Management Beyond Carbon Accounting
Presentation by Roxanne Nielsen, VP of Products, Envana Software Solutions | March 28, 2024
Edited for clarity | View the presentation here.
Envana Software Solutions offers digital cloud-based emissions management software. We're focused on all the challenges that go into tracking GHG, from how you quantify –whether it is calculation or measurement– to how you track and audit, how you report, and what kind of insights you can derive from that data.
About Envana
We're a little over a year old now. We were incubated within Halliburton with the intent to be a commercial software. It started as an awareness that there wasn't good software out there for the oil and gas industry. We did a lot of interviews and a lot of research.
I spent more than 20 years in the oil and gas industry, much of that time in technology and product development, but also as director of stewardship and sustainability for a service company. In the last year, we've done a lot of work to develop products in space.
GHG Data as a Service
The first topic is how you operationalize your emissions understanding so that you can potentially provide your GHG information as a service. If you're a supplier trying to provide your customers with information about the services/products that you're providing them, how do you do that?
Service providers have customers asking,
- How are you managing your carbon emissions?
- Can you give us the carbon footprint of this specific service that you did for us on this day?
- What will the carbon footprint for this work be?
- How do we go about doing this for our services and products?
In some cases, this is becoming a requirement to even respond to the bidding tender.
This company put together a team with SMEs from the business unit as well as from the corporate sustainability team and the finance group that's responsible for ESG reporting because now that the FCC is mandating disclosure of finances, making sure that those numbers are good before they go out the door.
These teams get together and look at:
- What data is available?
- What emissions sources do we have- what equipment is involved in the service?
- What raw materials are involved in the service?
- What personnel are involved?
- What are the logistics to get the service done?
At that granular level, if you can define the "recipe" or emissions profile or template for that service, you can use that recipe repeatedly for any customer for that service.
This company has software to track its service workflow or service delivery workflow. It knows when the service is going to happen. It knows when it first wants to bid on the job. It knows exactly what's going to go into it, and they have software that tracks those. Those inputs can be put into the "recipe" as ingredients, and those usage parameters can be quantified. Then you can come out with a carbon footprint. It's about making sure you understand what your boundaries are. You must understand what is going into it. And you have to define all your assumptions. All the same things that you need to worry about anyway when you're thinking about your products and services.
Governance and Centralizing Emissions Data
Once you have these profiles you can use them repeatedly. The other important aspect is the governance and the centralizing of this.
There are many ways that you can calculate emissions, and it's important to be consistent and track those methods carefully, using the same emissions factors. If next year there's an update to the standard emissions factors you're using, then you may decide that you need to change your emissions factors. How do you make sure that that's happening everywhere in the same way?
If your corporate sustainability group has governance and can approve those emissions profiles or “recipes” once they're created, that helps you understand that: “Here I have the documentation of the method that's been used. I know exactly what emissions factors are there. I know what assumptions we made because they're documented here.” You've got all of that in one central place, and that's driving the calculation of all your carbon footprint.
It also becomes possible to automate and integrate the data sources with your parameters. This is exactly what this company did. That bridges the gap between engineering operations and corporate sustainability. You're not throwing cell files over a wall: Everyone can see and action that data in a consistent way.
Emissions Data Processes
The other important thing is implementing good processes. Every time there's a development and there's a new service or a new product or the service iterates, you must go back and make sure you're looking at how you've built these “recipes” and these emissions profiles and make sure that they're updated accordingly and that any changes are tracked. And that you're deciding if is this going to be what we're going to use going forward or not. As services are planned, as they are being executed, and after they're executed, you have the record of the forecasts based on your operations and of the actuals once they're completed.
Operationalizing Emissions Data: Auditable Consistency, Governance and Transparency
The main point here is to drive consistency, governance, and transparency so that you can audit. You've got a trackable history. You are flexibly modeling and keeping track of the assumptions that were made, the boundaries, etc., and you're avoiding manual errors by doing this.
Governable & Auditable Oil and Gas Data
You've enabled easier audits by having transparency in central governance, and your reports are easily generated. You have some differentiation because you can provide your customers with the information they're looking for, and you have some clear documentation as to how you got there. You receive alignment to your corporate sustainability strategy and can adjust stakeholders. The other advantage to this method is that if there are multiple standards that you have to consider–not just your in-house corporate standard, but even if your customer is asking you to adhere to a particular standard where they want to see the data in a certain way, you can take the same inputs or adjust your inputs as needed and create a new “recipe” or template based on that, have that documented, and be able to provide the information the same way.
The Power of What-If Modeling
In that typical rearview look process, you gather rolled-up information. Though many of us are beyond that now, there may still be some companies doing it this way: You get that retrospective look for the past period. You get your information from stakeholder emails thrown over the wall in the Excel spreadsheet, and you have to make sure all of it's fully reconciled. You hope, Joe, the new guy, is doing some things the same way that Sally did when he extracted the data out of the system of record that he used all the same filters, and that he passed the right information: he validated, transformed, calculated and then you approve and report.
The data comes from everywhere… So many stakeholders! You might even have the same verticals, but in a different country, they might be doing differently in a different system company or even one country company you may find there's a lot of complicated information being thrown out from a lot of different systems and maybe a lot of different Excel files.
A Rearview Approach
When you do that, first off, it's always retrospective. You cannot be proactive, you’re only looking back, and you can only be reactive. How do you know if and how you’re meeting your targets? How do you know how things are going to change? And you don't have a real tie-in into operational activity or business activity at your company other than at the highest level.
Lack of Granularity
This lack of granularity results in less understanding of how your business impacts GHG. And you have a harder time prioritizing “bang for buck”, especially beyond the obvious reduction project that you can undertake. And of course, it’s a manual process.
Evolve the Data
To evolve your process, it’s about integrating the data sources into the central system, creating more granular emissions calculations, tied to your operational activities and emissions sources, and analyzing the relationship between those operational acts and your GHG emissions. That way, you can start to automatically generate forecasts based on your operational activity, or how you would pay for your operational activity may change.
Financial Modeling
Then you can also start making more informed decisions about projects to see how they might be impacted, not just financially by environmentally and by other factors. And increasingly, in other parts of the world, your GHG emissions are also going to impact financials. Having this kind of understanding is going to help you in your financial modeling as well. A central system truly simplifies this, but it's not just a central system. It's about understanding how your operations impact your GHG.
How To Create Value With Differentiated Gas
In one example, if you're a company that plans to be Net Zero, you can time your carbon credit and offset purchases for optimal market pricing. The pricing credits will vary over time and if you know you’re going to need to buy an offset and exactly how much you need to buy –because you have forecasted it based on your operations– you can find the right time to buy them and save some money that way. You can also save money by prioritizing your reduction efforts. You can buy and consume less energy and fuel. And you can also get more buck on your emissions reduction and save money. And, if you are a natural gas producer, the less you're losing to fugitives or venting or flaring, the more product you're selling. And this still is something that remains to be seen: you may be able to differentiate yourself from competitors and potentially one day generate premiums through your reduced carbon intensity. And if not through premiums, it may just be table stakes to be below a certain intensity someday.
Tracking Reduction Targets Across Global Operations
The last topic is tracking reduction targets across global operations. This is about a major upstream producer and operator and how they're thinking of emissions goals and tracking them.
First off, they're making their emissions models using the best assumptions for each location, templating them in emissions profiles. The challenge is that each location has varying levels of data quality and data granularity. Businesses are not homogenous in their maturity for data. This is pretty a common problem. Even the same vertical, depending on the country, and the site may have different equipment, different data sources, and different ways of tracking. They might have to model their emissions a bit differently to these sites just by force of what's available. Being able to track:
- That there is something different about how they're modeling because they're tracking that set and they've got more assumptions for its or those locations is important because that raises the visibility of it and makes it possible that I may need to plan for these sites in the future if I want to that consistent way of tracking.
- Second, targets are set specifically for each site by emissions source types.
Once a year, this company goes through an exercise where they look at their operations and decide their targets –not just for each asset but by the specific emission source type they're tracking. That's important because all of these assets have different challenges. And being able to have granular targets like that makes it more possible and realistic for them to meet those goals versus just saying “Everybody has to reduce 10%”, or something like that.
Data Reporting and Visualization for Insights
So essentially all of this makes it possible to plan and improve for maturity. Also, to see how these targets are rolled together to meet the overall reduction goal.
To that end, reporting for visualization and insights is important.
Now that you have all the data in one place, you can look at it. This is where you can check your targets. You can do a waterfall chart to see which ones of your emissions are going up and down. You can start to go back and dig. “Why did that go up?” “Is there an anomaly here?” You can look at which parts of the world your emissions are greater. You can quickly see where more assumptions were used, where the confidence level of your emissions is less strong, and where you may need to tighten up.
How does Envana software tackle the validation of incoming data via API?
We have two ways of taking data in. We can either take in information from your systems by you triggering us, or we can pull data in from you. We follow all the standard secure methods. We help you audit all of that to make sure that it's valid. If you have particular ways that you want us to validate to make sure to meet a particular standard, we will work with you to meet those.
Does Envana have records management capabilities, especially regarding emissions restatements?
One of the nice things that we have is we can track your "recipes" or emissions profiles. Say you have discovered a flaw in your methodology, and you need to make a change to your calculation method. Or you have adjusted and now suddenly you have way more data is resulting in you requiring to recalculate all of your past emissions. The nice thing about having the central source with all the data there is that you can change your profile one time and now see the impact and get all of your calculations updated and you can track that. You can have the history of the change. You can also then upload any assumptions about why you had to restate and that can be provided to auditors.
Can this be used to compare well pad surface designs?
Yes, it can. One of the nice things about using this method is that a company can define its own methods. This is the important part. If you buy well pad design software and it has a built in emissions calculation tool, you have no idea how that well pad software is calculating those emissions. They have built in some calculations. They're not an emissions expert. They will use one method, one standard, and one emissions factor typically, and it may not be consistent with how you are planning to calculate your emissions in your company.
So how useful is that data to you? Probably not super useful. Our value prop is really that you have a central way, a flexible way to build your own emissions templates according to whatever methodology your company has ascribed to, whatever standards you are adhering to. And that emissions profile can then be used by any software or data source that you have internally to calculate emissions. If you have a well design tool, you can then plug in with that. Whatever parameters are coming out of that:
- This well is going to be this deep.
- This is the volume of cement.
- This is the volume of steel that's going to go inside that well.
- This is how much it's going to take.
These are the logistics involved. We take that and we can calculate it using your methodologies.
How does the operational data get to Envana?
If you wish, use manual entry. But really where it shines is if we use an API or we use some kind of integration to get the information automatically out of your own systems.
Could you give more detail on how you're doing what-if analysis?
We have the ability to generate carbon footprints based on these emissions profiles. And you can also compare these carbon footprints. You can create multiple carbon footprints. We have statuses for them, such as this is the forecast carbon footprint. This is an actual carbon footprint. We also have scenarios. If you want to build a set of scenarios for a specific project, you can easily do that. You can try different usage parameters, or you can try different profiles, and different ingredients.
For example,
- What if we were to use natural gas from the source?
- What if we were to use electricity from Pennsylvania versus from Texas?
- What if we were to change our fleet so that 50% of it was electric?
- How much production would that be?
You can model all these and then compare them and see which ones are lower or not. Those are some obvious examples, but there are ones that are way more complex and could result in some surprises.
Have you considered implementing a blockchain ledger to make annual auditing easier?
Yes, we have. More to come on that soon!
Does Envana work only for E&P, or can it cover midstream and OFS?
Envana’s framework is very flexible, so we can work with pretty much any industry. But we have because we are from oil and gas, we have specifically looked at oil and gas use cases and built those out. Yes, we can pretty much accommodate anything.
How do you use historical data to forecast future emissions for drilling and production?
We bring in your historical data and then we can do data analytics on it to help you project. We have AI that’s continuously evolving, and we are developing features on that this year.
How does Envana support the OGMP 2.0 international initiatives?
Envana can support OGMP 2.0 level three with our current methods because it's very simple. You can make an emissions profile with emissions factors and your usage frame is the number of valves or number of components or whatever that might be.
We can also take in detection data. We have a product in development called RECON that helps you quantify using multiple methane detection devices as well as your own SCADA data to get to a more accurate emissions factor that you can use. It's a data-driven emissions factor or measurement-informed emissions factor.
What do you think is the next emissions management opportunity for Envana?
We have a very robust road map. We are well funded. There's a long runway for us. I don't want to go into all of our secret sauce, but basically, we have a lot of plans in this space.
What are the challenges with creating long-range 2050 emissions forecasts?
I don't think there are any challenges with creating long-range emissions forecast because it's pretty easy to go, “We're going to be all electric. We're going to be using wind power”, or whatever it might be. The challenge is meeting the forecast and tracking whether you're going to get there, and today most people don't have a good way of doing that. And thinking about the road map of how to get from point A to point B. It's not hard to pick a point B, right? What you need as a partner or a platform or team that's looking at how to do that.
How do you integrate emissions estimates with direct measurement campaigns?
I think this is one of the power powerful aspects of our tool. And in this talk I promised, I wasn't trying to sell Envana, more just talking generally about use cases. But one of the things about our tool is that we can take in measurement data as well as calculated data and put them together and you can track, “This came from the measurements, and this is the method we're using to capture this information versus this. This was a calculation we used because we just don't have measurement data for these sites.” In most places, there's detection and there's calculation, and never the two meet, right? This is a different way of looking at it and being able to put all this information in one place. It's important as we go forward.
What differentiates Envana from ESG software systems?
Those companies are covering a lot of different things, not just GHG. They're covering diversity and inclusion numbers, and health and safety statistics, i.e. incidents.
We're very focused on GHG. We're also very focused on capturing your methodologies flexibly, being open to whatever standards you're using, whatever those might be, helping you document that, and bringing all that information in. And we can feed easily into applications that are doing your larger reporting across all of your sustainability initiatives. I would say we're more focused and we can make very specific use cases that support oil and gas. These broader companies can't deal with the unique oil and gas use cases.
Have you integrated with a third-party data platform?
Yes, Envana has integrated with many third-party data platforms.
Visit this link to watch the Carbon Tracking and Reporting Conference video.
View the Emissions Management Beyond Carbon Accounting Presentation
If you have any questions or would like any additional info or a demo of the software, Envana’s team of professionals –with over 200 years of experience in oil and gas across the different spectrum of companies– would love to help you out. Request a demo here.
