Environment
- We make a positive contribution to the protection of the environment.
- We go beyond compliance with local environmental regulation to meet internationally accepted best practice.
- We reduce to the minimum practicable any adverse effects of our operations on the environment.
BG Group shares global concerns about climate change and other impacts of human activities on the environment. We are committed to deploying our full range of resources, from our products to innovative use of new technologies, to protect the environments within which we operate and to contribute to worldwide efforts to combat climate change.
Those commitments are put into practice through our Health, Safety and Environment (HSE) Policy and through the requirements set out within our HSSE Management System.
Back to topNatural gas offers specific environmental advantages compared to other hydrocarbon fuel sources. The use of gas in place of more carbon-intensive fuels can improve air quality and help reduce overall greenhouse gas emissions. However, the business of exploring for, producing and transporting natural gas has an unavoidable environmental impact, even when reduced to the minimum possible.
BG Group works to embed leading environmental protection practices and technologies in our operations around the world. The Group also works to facilitate action to protect the environment through partnerships and voluntary donations.
Back to topNatural gas and energy efficiency
In many countries, social and economic development depends on access to secure energy supplies. BG Group plays a role in underpinning such development by supplying a relatively low-carbon fuel and by promoting efficient use of energy to reduce emissions further.
The Group’s core product, natural gas, is part of the solution to climate change. Gas
is a plentiful and globally-available energy source with the lowest carbon content of any
fossil fuel, releasing 22% less CO2 than oil and 40% less
than coal when combusted. Gas also lends itself to more efficient combustion technologies,
producing significantly fewer emissions per unit of energy than coal or oil. These advantages
have led the Intergovernmental Panel on Climate Change (IPCC) to acknowledge gas as an important
fuel with a short and
medium-term role to play in addressing climate change (see below).
In 2007, the Group completed the acquisition and assumed operation of Serene S.P.A. (now BG Italia Power), a set of five Combined Heat and Power (CHP) plants. The plants are in the range of 50 to 100MW capacity each, and are considered to be amongst the most efficient fossil fuel-fired power plants in Italy for their size. These plants utilise high-efficiency gas turbines with aeroderivative technology; the exhaust gas feeds heat recovery boilers to produce steam at high pressure, which in turn powers steam turbines that produce additional electricity. Low-pressure steam produced in co-generation is sent to nearby industrial plants, giving the plants a higher overall efficiency.
The Group also acquired additional CCGT generating capacity in the USA during the year. The US power stations, taken as a whole, operate at higher efficiencies than US average gas generation.
Back to topImplementing innovative practices
BG Group contributes to the protection of the environment by adopting leading environmental practices. The Group aims to minimise disturbance to ecosystems from its operations and, where appropriate, seeks to put in place programmes to compensate for unavoidable impacts.
An example of leading practice is our onshore gas production operation in the Victoria Mayaro Forest Reserve in Trinidad and Tobago. A specific goal of the environmental assessment process was the reduction of the amount of land required to a practical minimum through project design and prudent site selection. Recognising the country’s ‘no net loss of forestry’ policy, BG Trindad and Tobago is offsetting the residual land take required by the project’s drilling and production sites and roads by funding a programme to reforest 21 hectares of degraded secondary forest. The first tranche of planting started in August 2007, and by September the first seven hectares of land had been replanted.
BG Trinidad and Tobago objectives go beyond offsetting the land cleared to include conservation criteria that will ensure that we hand over to the Trinidad and Tobago Forestry Division what will be, in effect, a rehabilitated ecosystem. The Group also expects to gain valuable experience from this project that will inform best practice for similar projects worldwide in the future.
Back to topSponsorship/partnership
BG Group also makes a contribution to the protection of the environment by sponsoring and partnering with third parties. For example, during 2007 we expanded our partnership with Conservation International, announced in last year’s report, and report on it in the case study on this page.
To help raise our management of environmental risks to internationally accepted best practice, BG Group took the following steps during 2007:
- restructured the HSSE Management System to ensure a more consistent and effective application of our policies. The restructured system was launched in 2007, through online training and awareness sessions;
- updated the BG Group Environmental Standards and Guidelines, bringing them in line with the associated new HSSE Management System format;
- strengthened the BG Group internal HSSE audit structure with a new framework supported by tools, environmental protocols and training for audit team members. The new framework has clarified the objectives of audits of the Group by providing a defined team structure, standard reporting formats and fixed timelines. Proposed actions on environmental findings are tracked to completion and key findings are reported to the HSSE Committee, providing greater assurance that environmental impact risks are identified and appropriately handled;
- rolled out the BG Group Environment and Community Project Assurance System (EnCompass), which provides best-practice guidance on environmental and community relations activities and deliverables for each stage of the life-cycle of a project; and
- continued implementation of the international Environmental Management Standard ISO 14001 across our major operated assets. The Group is currently developing a new system for the Armada asset (the ISO 14001 certification for which lapsed during the year) in the North Sea that will bring all the BG Group UK upstream assets under one certification. Recent acquisitions such as the US Power Generation assets are in the assessment phase of this process, whilst the Group is reassessing the certification timetables for a small number of projects such as the Central Block development onshore Trinidad and Tobago due to revised project delivery schedules.
Case Study: Photography Alliance
In 2007, the Conservation through Photography Alliance, an initiative with Conservation International (CI), continued to promote public awareness of conservation issues by providing the means of capturing, storing and sharing high-quality photographs of the natural world.
The images help to build understanding among local communities of the importance of their natural heritage and can play a role in influencing local and global support for conservation and sustainable development initiatives.
The collaboration between BG Group and CI involves training workshops for field staff, expeditions to priority conservation areas and public photography exhibitions. During 2007, CI held workshops in Brazil and Cambodia, an expedition to the Congo, and hosted an exhibition in Houston, Texas.
Back to top
It is inevitable that BG Group’s exploration, production, fuel transportation, distribution and power generation activities will leave an environmental footprint. These activities are a necessary part of modern energy access on the scale enjoyed by societies within both mature and emerging economies. To minimise the environmental impact of its operations, BG Group employs risk-management processes throughout its business. These processes enable the Group to understand better the environmental consequences of new and existing operations and help us to take every practicable step to minimise their impact.
Our risk management processes begin with an environmental assessment process to inform judgements about the extent to which our operations will adversely effect the environment. We then carry out environmental engineering work using Best Available Techniques (BAT) to minimise the potential for any adverse effects. In assets where BG Group is the operator, we also put controls in place to manage environmental risks, with continuous improvement being driven through the use of ISO 14001 certified Environmental Management Systems (EMS).
Leading environmental performance requires the successful application of new technologies. For example, a common side effect of a gas-producing installation is condensate in produced water, a complicated problem requiring specialised technology, as condensate is more difficult to separate than oil with proven treatment technologies.
BG Tunisia’s solution to this challenge, implemented on the Miskar platform, is a high-efficiency separation process that has required significant structural changes to the platform. Concept definition, field trials and technology selection took place in 2005, with detailed engineering and procurement following in 2006. Deck extensions and construction were carried out during 2007, and the installation of the treatment packages were completed in October 2007.
With the new treatment system, the produced water passes through filters to remove particulates and then into coalescers where entrained condensate is separated from the water stream. The cleaned water is discharged into the sea, and the hydrocarbons are routed to the export pipeline. The new system has been running since its commissioning in November 2007, and has resulted in a very significant improvement in the quality of the water discharged.
Back to topPerformance in 2007
Air quality
The emissions of sulphur dioxide from operations under our control totalled 11 508 tonnes in 2007, an increase of 25% compared to 2006. This increase was associated with the incineration of sour gas at our assets in Kazakhstan and Tunisia. Despite this overall rise, total emissions per unit of throughput declined by 1% between 2006 and 2007.
During 2007, 18 410 tonnes of nitrogen oxides were emitted, an increase of 35% compared with 2006. This increase was due to the acquisition of additional commercial power generation capacity, a sector that has relatively high unit emissions. As a result, the unit of throughput emissions have also increased, by 7%.
Hydrocarbon spills
Of 45 reported incidents of uncontrolled releases of hydrocarbons to the environment in 2007, 15 resulted in spills to sea and totalled 12.6 tonnes of oil.
The largest spill to sea was 10.4 tonnes of oil from a drilling rig in the North Sea. This was a result of an accidental discharge of oil based muds when a padlocked dump valve was opened in error. Following the incident, the asset has installed secondary barriers and improved training and procedures to prevent reccurence.
We also experienced a spill of 16.8 tonnes of hydrocarbons in Kazakhstan as a result of an attempted theft of product from one of the export pipelines from the Karachaganak field. Following discovery of the incident the pipeline was isolated and the area made safe. As a result, security procedures have been reviewed and improved, and the partners are working with the local authorities to reduce the likelihood of reccurence. In line with our overall environmental reporting approach for the Group’s joint venture business interests in Kazakhstan (see Social and Environmental Data), the spill quantity is booked at 50%.
Controlled hydrocarbon discharges to water
In 2007, the total quantity of process water and the amount of oil in that water remained similar to 2006. We reported last year that the oil in water concentrations at our Miskar platform in Tunisia and our Dolphin platform in Trinidad were in excess of the locally legislated requirements. We have resolved this issue on our Miskar platform (see above). In Trinidad and Tobago, the Group is investigating options to bring the discharges at the Dolphin and Hibiscus platforms to within legal limits. The project team is drawing on the experience gained at Miskar to find the optimal solution for each platform.
Waste
Waste generated by BG Group operations fell by 21% between 2006 and 2007. The total quantity of waste produced is substantially affected by short-term changes in activity. This makes relative performance measurement difficult, as activities fluctuate between years and between locations. Waste minimisation programmes are implemented at country level as appropriate (see below).
Back to topCase Study: Waste management in Brazil
BG Group’s efforts to minimise environmental impacts is exemplified by the waste management project implemented in the course of BG Brazil’s drilling campaign at the BG Group-operated BM-S-13 exploration block in the Santos Basin offshore Brazil. BG Brazil aimed to use best practices in the collection and treatment of all wastes generated during the drilling campaign.
Effluent discharges were controlled prior to discharge, and wastes were segregated, stored and sent to shore for appropriate treatment and disposal. A specific manifest chain was set up for all types of waste, which enabled BG Brazil to control the entire waste disposal chain and provide auditable registers to Brazilian authorities.
BG Brazil used seven different treatment and disposal options to manage a total of 406 tonnes of waste, an average of 2.6 tonnes per day of activity. Less than 3% of waste was sent to landfill and only 30 kilograms was incinerated. More than 80% of the waste generated during the drilling activity was sent to co-processing plants to be used as feedstock in other industrial processes or was otherwise recycled.
Back to top
COMBATING CLIMATE CHANGE
BG Group fully acknowledges that climate change is occurring and that the use of fossil fuels is a significant cause of global warming. The Group also believes that gas has a role to play within the package of measures required to lead to a stabilisation of carbon dioxide equivalent (CO2e) concentrations in the atmosphere. We have embedded consideration of climate change within our business to reflect our belief that BG Group can contribute to solutions to climate change.
Concerns about rising greenhouse gas emissions are increasing in light of the fact that only one-sixth of the global population currently enjoys developed-world living standards. The International Energy Agency (IEA) predicts a doubling or tripling of global energy demand by 2050. Fast-growing economies such as India and China are driving this increase in demand for energy – a demand which is being met in part by the construction of new coal-fired power stations.
Back to topBG Group’s GHG performance in 2007
During 2007, BG Group increased generation capacity through the acquisition of operating CCGT power stations in the US and by increasing the Company interest in BG Italia co-generation facilities. The US power stations utilise CCGT technology, and due to this operate at higher efficiencies than US average gas generation; co-generation is also one of the most efficient methods of energy generation.
These facilities were operational and emitting GHG before their acquisition by BG Group. On acquisition, emissions were transferred into BG Group totals. The impact is significant. In 2007, operations under BG Group control emitted 9.4 million tonnes CO2e, an increase of 3.2 million tonnes (52%) over 2006. BG Group also measures emissions on an equity-share basis. We report those emissions aggregated on an ownership basis from both operated and non-operated assets. Equity share emissions from BG Group operated and non-operated activities rose by 3.5 million tonnes (30%) to 15.2 million tonnes CO2e.
Like-for-like emissions data shows an increase in emissions from operated sites of 0.5 million tonnes CO2e (8%) from 2006 to 2007. Equity share emissions on the same basis rose by 1.2m tonnes CO2e (10%). The principal reasons for these like-for-like operational increases were increased world-wide drilling activity, an increase in the size of our LNG fleet, and full year emissions from Dighton power station, acquired in October 2006. These figures are illustrated below.
Emissions data has been adjusted to allow a like-for-like comparison between successive years, removing the effect of major acquisitions or divestments. For these purposes, major acquisitions or divestments are those which added or removed more than 5% of the Group’s total GHG emissions in 2006 or 2007.
See descriptionBack to top
The case for gas
Many means exist to reduce carbon emissions, but there is no single solution. Issues of cost, state of technology development and scalability dictate that effective strategies to balance energy demand will require a variety of contributions from a range of measures. The IPCC’s Fourth Assessment Report, in listing mitigation technologies open to the various sectors of the global economy, distinguishes between technologies and techniques that are currently commercially available and those that are expected to be commercial by 2030 (see table below).
Reproduced from the IPCC 4th assessment report Work group III - Summary for Policy makers
| Sector | Key mitigation technologies and practices currently commercially available | Key mitigation technologies and practices projected to be commercialized before 2030 |
|---|---|---|
| Energy supply |
|
|
| Table SPM3: Key mitigation technologies and practices by sector. | ||
BG Group has an important role to play in the areas of current technology outlined in the IPCC report and is examining the commercial feasibility of the report’s future technology recommendations. In particular, the Group can help to address the challenging task of meeting energy demand growth whilst reducing GHG emissions by supplying and encouraging conversion to our core product, natural gas, which, as described above, is a lower-carbon, higher-efficiency alternative to oil or coal.
Examples of how BG Group is reducing CO2e emissions by enabling the use of gas in place of higher carbon content fuels include:
- BG Group’s conversion of Ballylumford Power Station in Northern Ireland from fuel oil to gas and the further improvement of the plant’s energy efficiency by introducing a CCGT power station. Taken together, these steps have resulted in a 42% reduction in CO2 emissions per unit of electricity. This improvement has directly contributed to the ability of the UK to meet its Kyoto Protocol targets;
- the Group’s two CCGT power stations in the Philippines, which are displacing coal consumption – a fuel substitution that reduces overall CO2 emissions by 4.5 million tonnes per year; and
- investments by our natural gas distribution company Comgas in gas networks in São Paulo, Brazil, enabling fuel-switching from diesel or fuel oil by factories and other industrial premises. The gas is burnt in more energy-efficient applications, creating additional savings for Comgas customers. The ongoing annual emissions reduction from Comgas-supplied businesses amount to more than 1.5 million tonnes of CO2, a figure that will increase as Comgas continues to expand the gas network.
To provide an idea of the scale of emission reduction that gas supply can provide in the near
term, these three projects alone have produced emissions savings equivalent to those from
1 200 2.5MW wind turbines.
BG Group’s Enhanced Greenhouse Gas Management Programme
Beyond supplying our core product, BG Group can also contribute to GHG reduction in the near term by improving the efficiency with which we supply and distribute gas, by reducing emissions at our existing operational facilities, and by identifying and installing the best available emissions saving practices and technologies in our new facilities.
To stimulate action across the business to reduce GHG emissions to a practicable minimum over a set time period, we introduced the Group-wide Enhanced GHG Management Programme in early 2006. The Programme aims to provide the tools, processes and expertise to drive GHG emission reductions within both existing operations and new projects.
Back to topBG Group GHG reduction target
Recognising the value of a target in focusing management attention on a programme, BG Group has analysed in detail how a GHG emissions reduction target could be introduced into a rapidly expanding business with relatively new and efficient facilities. As a result of this analysis, we have introduced a Group target for emissions from our operated assets. Between now and 2012 we will be identifying and carrying out projects that aim to generate ongoing GHG reductions of one million tonnes (compared to a ‘no-action’ base case) by 2012. These projects will involve improvements in efficiency in our existing operations as well as the use of more advanced technology in new projects. The one million tonnes target consists of 100% of the reductions achieved at all BG Group operated assets, including the KPO joint-operated venture, and represents approximately 8% of our forecasted 2012 emissions.
BG Group will report performance towards the one million tonnes target annually alongside our figures for total operated and equity share emissions and will subject these reports to external verification. The Group has developed an accounting and reporting protocol for the emission reductions achieved from individual projects to allow for external verification. However, some of the mitigation actions will not be fully quantifiable due to a lack of suitable measurement techniques.
In several cases in 2007, efficiencies were made but GHG savings could not be absolutely verified due to changes in operational circumstances between the measurement of baseline emissions and the completion of reduction projects. Experience gained from these situations will be applied to reduction projects still underway to allow complete verification in future.
In 2007, implementation of 26 emission reduction projects in operational assets resulted in GHG emission reductions ranging from 54 tonnes to 42 000 tonnes. In total this amounted to:
- 182 000 tonnes of quantified, verifiable emissions reductions; and
- an estimated 39 000 tonnes of emissions reductions that are not yet fully confirmed.
In 2008, we aim to achieve additional reductions of 244 000 tonnes, bringing the cumulative annual reduction at the end of 2008 to approximately 465 000 tonnes.
Back to topCase Study: GHG reductions in Tunisia
In 2007, BG Tunisia launched a programme to increase energy efficiency and reduce GHG emissions from its operations as part of the BG Group Enhanced GHG Management Programme. The asset identified opportunities to reduce GHG emissions, bringing in independent expertise to carry out a review of operations at both onshore and offshore locations.
Based on the conclusions of this review, BG Tunisia calculated a target GHG reduction figure. This target was then incorporated into the overall BG Group GHG reduction target number for 2007.
The Group then ascertained an emissions baseline for the specific processes involved. If the reductions were successful, this baseline would demonstrate that sustainable GHG reductions had been achieved. The asset assigned specific responsibilities for the delivery of each reduction opportunity and tracked progress monthly.
During 2007, BG Tunisia undertook six GHG reduction projects, yielding a total of 54 917 tonnes of GHG reductions. In addition to this, 640 tonnes of VOC emission reductions were achieved. Projects included work on gas export compressor controls, amine fin-fan coolers, optimisation of sales gas compressors and an amine regeneration system (pictured above).
Following completion, a verification report detailing how the reductions had been achieved allowed BG Tunisia to share the lessons learned and include the reductions against the Group’s 2007 target.
Back to top
Strategies for new projects and technologies
Within BG Group-managed projects, new and updated environmental Standards and Guidelines have enhanced the means by which the Group will deliver GHG emission reductions within new projects, applying Best Available Techniques to minimise both energy requirements and emissions whilst maximising the flow of hydrocarbons to customers.
In 2009 and 2010, BG Group expects to take delivery of four new, energy-efficient Dual-Fuel Diesel-Electric (DFDE) LNG tankers, with an additional tanker due to come on lease in 2008 for one year to replace a steam turbine driven vessel. Against a base case of using steam turbine driven vessels, just two of these high-efficiency tankers will cut our CO2 emissions by an estimated 70 000 tonnes each year on a sustainable basis.
The IPCC Fourth Assessment Report states that, for the energy supply sector, the early application of Carbon dioxide Capture and Storage (CCS) is a key climate change mitigation technology. Feasibility studies are currently underway to test the applicability of CCS in a number of BG Group operating assets. CCS offers the potential to generate deep cuts in emissions where the proportion of CO2 in gas is high or where gas is burnt in large volumes, as in power stations. However, there are significant economic and technical barriers to be overcome. The studies, reinforced by our membership in industry-wide groups, are preparing us for the use of CCS in such high-emissions projects in the future.
Back to topCase Study: Reduced flaring in Kazakhstan
The Karachaganak facility in Kazakhstan is working towards an emissions-reduction target which will see 99.6% of gas produced either injected, used or sold. The total volumes of flared gas have decreased by 30% since 2006 due to a reduced well-drilling programme and the application of new well-testing technology that includes a hydrocarbons collection system.
In 2007, a number of initiatives and projects were carried out to reduce further flaring and other GHG emissions. These initiatives included reducing the quantity of purge gas flared, reducing the non-essential use of steam turbines for producing low-pressure steam and process optimisation to reduce the use of fuel gas.
The total amount of gas flared has decreased from 0.53% in 2006 to 0.35% in 2007 as the asset approaches its goal of zero planned flaring
Back to top
Stakeholder commentary
“Does the absence of published greenhouse gas emissions targets or a formal commitment to reduce greenhouse gas emissions undermine the credibility of BG Group’s claims to making a positive contribution to the protection of the environment?”
Rory Sullivan,
Head of Investor Responsibility,
Insight Investment
Our core product, natural gas, has proven benefits in reducing emissions of greenhouse gases and improving air quality where it is used in place of other fossil fuels. We also provide access to technologies such as co-generation that improve efficiency and thereby bring environmental benefits. Our business extends these benefits to emerging economies, many of which have depended historically on coal or oil supplies. We also provide greater supply certainty for established economies which have been partly or wholly dependent upon gas for many years.
In addition to these direct benefits from our core product, we also develop and introduce improved environmental management practices, such as ISO 14001, which have the effect of reducing the environmental impact of our operations. In some countries BG Group has been the first hydrocarbon company to introduce these systems.
As well as providing benefits through our core business, we also recognise that we need to manage the rate of growth of our own emissions as our business grows. We have therefore introduced a greenhouse gas emissions reduction target.
We will continue to take positive actions to reduce emissions: our target states that by 2012 the outcome of those actions will have resulted in a sustainable total emission reduction of one million tonnes. Further details of this target may be found above.
Ernst & Young remarks
“In the course of our work we discussed the GHG reduction projects that had been completed during the year. We saw evidence that where emission reductions could be attributed to a specific project, external verification of that project’s performance had been sought. In Tunisia we visited the Hannibal plant in which six GHG reduction projects had been completed, and viewed the externally verified project reports.”