“The energy sector, which for decades has enabled the world economy to grow and prosper, has contributed to the increase in emissions and therefore has a responsibility to reduce them,” says Eni CEO Claudio Descalzi. That means that we must all use energy more efficiently so that we can decouple economic growth from resource use and GHG emissions. One of the best ways to do this is to apply circular economy principles to the production and consumption of energy. The circular economy focuses on recovering, reusing and recycling materials to reduce waste. A perfect example of this waste is the gas virtually every oil well flares. According to the World Bank, oil production sites around the globe flare billions of cubic meters of natural gas annually. “Flaring gas wastes a valuable energy resource that could be used to support economic growth and progress. It also contributes to climate change by releasing millions of tons of CO2 to the atmosphere,” the Bank says. Even as renewable energy capacity increases, oil producers can become more efficient by capturing the gas they currently flare and using it onsite or adding it to their production.
Zero Routine Flaring by 2030
The World Bank has created the Global Gas Flaring Reduction Partnership (GGFR), a public-private initiative made up of international and national oil companies, national and regional governments and international institutions. GGFR works to increase use of natural gas associated with oil production by working to remove technical and regulatory barriers to flaring reduction, conducting research, disseminating best practices, and developing country-specific gas-flaring reduction programs.
In 2015, the GGFRP launched the Zero Routine Flaring by 2030 Initiative, committing those that have signed up – governments including the U.S., Kazakhstan and Nigeria and companies including BP, Eni, ExxonMobil and Total – to limit the practice of routinely flaring gas in new oil field developments and to find ways to end routine flaring at existing oil production sites as soon as possible, and no later than 2030. It has now been endorsed by 27 governments, 35 oil companies and 15 development institutions.
New satellite data shows that gas flaring at oil production sites around the world fell by 5 percent in 2017, even though oil production rose by 0.5 percent, with the largest declines seen in Russia, Venezuela and Mexico.
As well as reducing its carbon footprint, Eni has also invested in technologies that enable it to recover urban and industrial waste, focusing on organic production and circularity in its refinery and chemicals operations.
Meanwhile, thermal power plants can recover the heat created in burning fossil fuels or in generating nuclear power and use that energy, improving their efficiency or reducing demand for fuel through infrastructure such as district heating.
Power plants can also use the waste from other sectors such as agriculture and industry – materials such as crop residues, wood chippings and bagasse from the sugar production industry, either burning them directly or turning them into biofuels. It is clear that there is much that the energy sector can do to become more efficient.
“But it will also be necessary to look beyond the energy system,” Descalzi adds. “In wealthy countries, we consume too much of everything: clothing, food, plastics, household appliances, vehicles. We need to adopt a new model of energy conservation based on a circular economy and way of life – not merely reducing waste, but also decreasing the need for raw materials.” This involves moving from the current “take, make, waste” linear model of production and consumption to one based on recovering, reusing or recycling materials.
Some of the solutions reside in the energy sector, such as the storage and reuse of energy, a sector that is seeing stellar rates of growth as capacity increases and costs come down.
However, we need not just to consume less – of energy and other resources – but to fundamentally re-engineer products and services using a “cradle-to-cradle” approach that allows us to recover and reuse materials when they are no longer needed.
There are a number of strands to the circular economy – the first is that products must be designed to reused, remanufactured or recycled. Renault has a factory that takes in its old engines and remanufactures them, while other carmakers such as GM, Ford and Toyota have made their factories around the world zero-waste.
Other companies take waste products and turn them into something new – the London designers Elvis and Kresse make bags, belts and wallets from fire hoses that have come to the end of their useful life in the fire service, for example.
There is also a shift from an ownership economy to one based on renting or leasing products – these As-a-Service models are emerging in sectors ranging from lighting to aircraft engines to carpeting and even jeans.
The rise of the sharing economy is also vital to encouraging the more efficient use of resources – companies such as Uber and AirBnB are helping people to earn money from their cars or homes while ensuring more efficient use of these assets.
“The challenge is enormous, but so is the opportunity before us: to save the planet while at the same time creating a new, more inclusive economy along with a whole range of new businesses and jobs as yet unknown” says Descalzi. “We need a different system – one that provides well-being for all but conserves the planet.”
The author: Mike Scott
As a freelance journalist Mike Scott has written for a range of titles including the FT, Bloomberg New Energy Finance, the Guardian, the Daily Telegraph as well as for think tanks such as Friends of Europe and corporate clients including Siemens, Rabobank, PwC, Deloitte and AkzoNobel.