10 May 2024

At this year’s Offshore Energies UK Aviation Conference, held on 9^th May in Aberdeen, LCI Analytics MD Steve Robertson called for the aviation industry to tackle ever-growing sustainability themes, with a particular focus on CO2 emissions.

Energy Context

In his Pulitzer Prize-winning book ‘The Prize’, Daniel Yergin hailed the UK North Sea hydrocarbon development as “a technological marvel of the highest order” given the advances made there.  However, the present reality is that the oil industry is rarely viewed with the same affection and has a serious image problem. This is exacerbated by its significant contribution of around 15% to global CO2 emissions, according to the IEA (source).

The IEA notes:  “The production, transport and processing of oil and gas resulted in 5.1 billion tonnes (Gt) CO2-eq in 2022. These “scope 1 and 2” emissions from oil and gas activities are responsible for just under 15% of total energy-related greenhouse gas (GHG) emissions. The use of the oil and gas results in another 40% of emissions. 

Fortunately, oil and gas producers have a clear opportunity to address the problem of emissions from their activities through a series of ready-to-implement and cost-effective measures. These include tackling methane emissions, eliminating all non-emergency flaring, electrifying upstream facilities with low-emissions electricity, equipping oil and gas processes with carbon capture, utilisation and storage technologies, and expanding the use of hydrogen from low-emissions electrolysis in refineries.

Upfront investments totalling USD 600 billion would be required to halve the emissions intensity of oil and gas operations globally by 2030. This is only a fraction of the record windfall income that oil and gas producers accrued in 2022 – a year of soaring energy prices amid a global energy crisis.”

Support Services, Logistics, and Aviation

The available data confirm that aviation operations contribute a small percentage of overall O&G logistics emissions, with vessels typically accounting for over 90% of the sub-total. As an overall proportion of offshore oil and gas emissions, aviation accounts for a fraction of a percent of the total. Even so, it is still important for the aviation sector to take CO2 emissions seriously. 

In addition, operational emissions are not the only story here, as we also begin to understand and perhaps quantify the sustainability of helicopter manufacturing and also end-of-life part-out or teardown processes.  Fixed-wing markets have made great progress with the latter (e.g. with the PAMELA initiative in the early 2000s, and the rise of associations such as AFRA), and this is a topic we shall return to in a future post (you can read more in the interim here).

A topic that is not going away

Irrespective of personal views on a highly charged topic, major sustainability and responsibility initiatives are not going away.  (Many currently fall under the umbrella of Environmental, social, and governance [ESG]; a term which this author is not particularly fond of but will work with for now.)

The exodus of helicopter O&G lending banks after the 2015-2019 down, including the particularly damaging Waypoint bankruptcy, is not being helped, let alone reversed, with the rise of increasingly strident ESG policies.  This challenge adds to the others including supply chain problems, underinvestment in new capacity and the short-term contracting behaviour of oil majors via the use of ‘cancellation for convenience’ clauses.

A path forward

Drawing from LCI Analytics’ proprietary models, we explained at the OEUK Offshore Aviation Conference that contracting for ‘lowest cost’ leads to different outcomes than contracting for ‘lowest carbon’. For instance, simply switching aircraft types can help operators achieve an estimated ~20-30% reduction in CO2 emissions, under certain scenarios. 

This matches recent analysis from Airbus Helicopters indicating that fleet and type optimisation could achieve 16% reductions in CO2 emissions based on operations in Aberdeen, and up to 32% CO2 reductions in operations over Brazil’s Jacarepaguá region, near Rio de Janeiro. It also dovetails with Leonardo claims that “[The] AW189 enables up to 35% of CO2 reduction with respect to heavy class helicopters and up to 10% CO2 reduction with respect to direct alternatives in the same class.” Source.

A new fleet renewal cycle presents an opportune moment for the industry to rethink aircraft choices and embrace the new generation of efficient rotorcraft as replacements for legacy aircraft. 

Additionally, the work conducted thus far by OEUK and HeliOffshore in developing contracting practices should be embraced by the industry to facilitate sustainable investment going forward.  

Finally, the offshore wind opportunity was highlighted, with the UK poised to maintain its position as a ‘world leader’, presenting a compelling avenue for reducing CO2 emissions while enhancing safety and operational efficiency through rotorcraft solutions in logistics. Time will tell whether this vision translates into reality.