Potential climate risks to Oil and Gas Infra and Operations
The recent Intergovernmental Panel on Climate Change (IPCC) report has once again emphasized on the risks we face by unmitigated climate change. Global instances of extreme climatic events show that long lasting, economic impact takes the form of damage to infrastructure, and suspension of fundamental infrastructural services. The primary techno-economic transformation required to abate climate change relates to fossil fuel-based energy infrastructure. Fossil-fuel based energy infrastructure, therefore, is vulnerable, with or without climate action.
Various modelling studies that examine energy sector transition options for low-carbon development pathways in India, prioritize the power sector, giving at least three decades of window to the oil and gas sector. However, the hydrocarbon sector is not immune to the impacts of global warming, even if the two Degree goal is achieved. Hence, the sector needs predictive planning. In this article, we provide a preliminary assessment of the climate risks that the oil and gas sector in India is likely to be exposed to in the coming decades.
Climatic events fall in two categories: extreme events and slow onset events. Extreme events include occasionally intense events such as cyclones, storm surges, extreme rainfalls, etc, causing huge financial losses. Slow onset events include change in climatic conditions that will occur at a relatively much slower rate over a period of time but will have sustained implications over a longer time period, such as rise in ambient temperatures as well as sea surface temperature, sea level rise, reduction in soil moisture, etc. While infrastructure is mostly vulnerable to extreme events, processes and operations are sensitive to slow onset events as well. The infrastructure of pipelines is also sensitive to soil moisture.
Based on PRECIS regional climate model simulations, and geographical spread of oil and gas infrastructure in India, following variations in the risk profile of various oil and gas infrastructure and operations are expected due to change in climatic patterns across? India during 2020-2050, as compared to the period 1970-2000:
Supply chain disruptions due to floods: Oil and gas operations are sensitive to flooding. Impacts include full or partial shutdown of refineries, disruption in road-based supply chains, including road accidents, ruptures in pipelines, disrupted access to infrastructure for maintenance and repair, etc. Considering the projected change in annual rainfall and number of extreme rainfall days, together with past pattern of flood occurrences during 1985-2011, and possibility of exposure to cyclones as contributing factors for extreme rainfall or flooding, an overall increase in exposure to flood risk across India is expected. The largest increase in impacts due to floods will be experienced in the north-western region, parts of north eastern and inland peninsula of India.
Fresh water scarcity for refineries and petrochemical plants: Reduced fresh water availability can affect the throughput and cost of water. Depending upon the water intensity of a refinery or petrochemical plant, 5% reduction in fresh water availability may result in corresponding decline in total throughput. Larger the plant capacity, greater the risk. Considering the projected increase in the number of dry days, and number of high temperature days, together with drought intensity of past occurrences (1985-2011) and observed extraction to replenishment ratio during 1985-2011, water scarcity will increase more acutely in North-Western India compared to other regions.
This article was first published in Infraline Plus Magazine January 2019 issue. The views are of the author(s).