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Contract No. DE-AC36-08GO28308

Approaches for Integrating 

Renewable Energy Technologies 

in Oil and Gas Operations

Sean Ericson, Jill Engel-Cox, and Doug Arent

Technical Report

NREL/TP-6A50-72842

January 2019
The Joint Institute for Strategic Energy Analysis is operated by the Alliance 

for Sustainable Energy, LLC, on behalf of the U.S. Department of Energy’s 

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303-275-3000 • www.jisea.org Contract No. DE-AC36-08GO28308

Approaches for Integrating 

Renewable Energy Technologies 

in Oil and Gas Operations

Sean Ericson, Jill Engel-Cox, and Doug Arent

Technical Report

NREL/TP-6A50-72842

January 2019
NOTICE

This work was authored in part by the National Renewable Energy Laboratory, operated by Alliance for Sustainable 

Energy, LLC, for the U.S. Department of Energy (DOE) under Contract No. DE-AC36-08GO28308. Funding 

provided by the U.S. Department of Energy Office of Energy Efficiency. The views expressed herein do not 

necessarily represent the views of the DOE or the U.S. Government.

This report is available at no cost from the National Renewable 

Energy Laboratory (NREL) at www.nrel.gov/publications.

U.S. Department of Energy (DOE) reports produced after 1991 

and a growing number of pre-1991 documents are available 

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Cover Photos: (left to right) NREL 04135, iStock 22779761, NREL 16933., NREL 15648, NREL 08466, NREL 21205

NREL prints on paper that contains recycled content.
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Acknowledgments

The authors wish to acknowledge preliminary work on this paper completed by Harshit Jayaswal

and Andrew Larson, both former interns with the Joint Institute for Strategic Energy Analysis 

(JISEA) at the National Renewable Energy Laboratory (NREL). Special thanks also go to the 

attendees at the International Energy Agency (IEA) Gas & Oil Technology (GOT) Collaboration 

Programme event on “Nexus of Oil & Gas and Renewables in the Energy Future” conducted at 

NREL on September 27–28, 2017, for their inspiring presentations and discussion.
iv

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List of Acronyms

CDU crude distillation unit

CSP concentrated solar power

EOR enhanced oil recovery 

ESP electric submersible pump

FCC fluid catalytic cracker

GOT Gas & Oil Technology

GW gigawatt

IEA International Energy Agency

ITC investment tax credit

JISEA Joint Institute for Strategic Energy Analysis

MW megawatt

NER net energy ratio

NREL National Renewable Energy Laboratory

psi pounds per square inch

PV photovoltaics

VDU vacuum distillation unit
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Executive Summary

Petroleum (including both oil and gas) heats our homes, drives our transportation system, 

generates electricity, and makes modern life possible. Continued demand from developed 

countries along with growth from developing economies implies demand for oil and gas will 

likely continue to be robust. Considering the desire to maximize production efficiency and 

economic returns, there is increased attention to the fact that nearly 10% of oil is consumed in 

the process of oil production, transportation, and refining (Halabi, Al-Qattan, and Al-Otaibi 

2015) and that a quarter of a barrel of oil is used to produce a barrel of heavy oil (Wesoff 2015).

As oil and gas development shifts to secondary and other non-conventional sources, meeting 

future demand is anticipated to require substantial amounts of energy to produce, transport, and 

refine petroleum.

Increasing efficiency of operations can mitigate the rising costs associated with increasing 

energy requirements. So can incorporating alternative energy sources that maximize product 

revenue while simultaneously addressing local environmental concerns as well as meeting 

emissions goals. This second factor has prompted a growing interest in integrating renewable 

energy technologies in oil and gas operations. Furthermore, due to dramatic declines in the cost 

of energy generated from renewable sources, integrating renewable energy technologies can, in 

many cases, reduce operations costs as well. This report provides an overview of where 

renewable energy technologies can economically be integrated into oil and gas operations. The 

following are key findings from the study.

1. The role of renewable energy generation in oil and gas operations could greatly

increase. The trends of increasing energy intensity in oil and gas extraction, growing 

concern over emissions, and declining renewable generation costs are leading to a growth 

in applications where renewable technologies can cost-effectively be integrated into oil 

and gas operations.

2. Several barriers must be overcome to effectively integrate renewable generation 

technologies. Renewable technologies must be cost competitive and meet operational 

requirements. Oil and gas industry staff must be trained in any operational differences 

between the use of onsite renewable energy generation versus other energy sources with 

which they may be more familiar to enable uptake at the operations level.

3. Countries seeking fossil fuel energy subsidy reform may present opportunities for 

renewable integration. Several countries with fossil fuel energy subsidies are attempting 

to reduce or eliminate the subsidy programs to reduce fiscal spending and promote 

efficiency. Renewable technologies can present a means of lowering costs by improving 

operation efficiencies, thereby dampening cost shocks from subsidy reform.

4. Enhanced oil recovery (EOR) applications present near-term opportunities for 

renewable integration in upstream production. Water and steam injection for 

secondary and tertiary EOR, respectively, are well-suited applications for integration with 

renewable generation. The rate and timing of energy production required to create the 

steam and inject either the steam or the water do not impact the effectiveness of these 

processes, meaning project economics are not significantly impacted by the variability of 

renewable generation (Sandler, Fowler, et al. 2012). Concentrated solar power to produce 
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steam for EOR is already seeing commercial applications, and offshore wind power for 

water injection may be in commercial applications in the near future.

5. Electrification of drill rigs and other upstream equipment can reduce emissions, 

noise, and costs and can be powered through connection to the grid or mini-grids 

with renewable power. Drilling operations and production equipment primarily rely on 

diesel generators to meet power needs. Diesel fuel can be expensive and controlling 

generator noise and emissions can be difficult. The ability to reduce noise and emissions 

is especially important for operations close to population centers, where noise and 

emissions regulations are often more stringent. Grid electricity, along with onsite 

renewable generation sources, can reduce operations costs and decrease associated 

emissions and noise pollution.

6. The utilization of renewable powered electric motors to power natural gas 

compressor stations can be an effective means to increase renewable integration in 

midstream transportation. Electric motors powered by the grid generally have lower 

net emissions and have more operational flexibility than gas engines or turbines 

(Greenblatt 2015). Hence, electric motors can provide both economic and environmental 

benefits.

7. Refineries offer multiple opportunities for renewable integration, but their high 

energy intensity, including high thermal demands, may require new solutions. Oil 

refining is the most energy-intensive part of the supply chain. Petroleum refining is the 

largest consumer of fuel in U.S. manufacturing and is the largest generator of onsite 

greenhouse gas emissions in the manufacturing sector (Halabi, Al-Qattan and Al-Otaibi 

2015; Brueske, Sabouni and Zach 2012; EPA 2018). In locations with sufficient sunlight 

and available land, solar generated heat can be integrated into the refining process. 

Renewable generation can also be used to produce hydrogen, which is an important input 

in oil refining. Finally, electricity and heat cogeneration can be integrated into the 

refining process to reduce energy intensity and emissions.

Putting these findings together, it is possible to envision oil and gas production that leverages 

clean power to decrease costs and maximize production while reducing environmental impacts. 

Adapting low-cost renewable energy technologies to oil and gas production, as well as to other 

extractive and industrial processes, enables conservation of energy-dense liquid fuels and 

versatile natural gas for high value uses, such as petrochemicals and aviation, while expanding 

profitability and increasing sustainability for both energy sectors. 
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Table of Contents

1 Introduction........................................................................................................................................... 1

2 Current Trends and Growing Opportunities...................................................................................... 3

2.1 Depletion of High-Quality Oil Reserves....................................................................................... 3

2.2 Environmental Leadership in the Oil and Gas Industry ................................................................ 4

2.3 Falling Renewable Energy Costs .................................................................................................. 4

3 Challenges to Renewable Integration ................................................................................................ 6

3.1 Variability of Generation .............................................................................................................. 6

3.2 System Reliability ......................................................................................................................... 6

3.3 Operational Considerations........................................................................................................... 7

4 Government Policies............................................................................................................................ 8

5 Upstream: Renewable Integration in Oil and Gas Production....................................................... 11

5.1 Electrification of Drilling and Primary Recovery ....................................................................... 11

5.2 Renewable-Energy-Powered Secondary Recovery..................................................................... 13

5.3 Concentrating Solar and Geothermal Heat for Tertiary Recovery (EOR) .................................. 13

6 Midstream: Renewable Integration in Oil and Gas Transportation............................................... 16

6.1 Compressor Electrification.......................................................................................................... 17

6.2 Compressor Heat Recovery......................................................................................................... 17

6.3 Turboexpanders........................................................................................................................... 17

7 Downstream: Renewable Integration in Oil Refining...................................................................... 19

7.1 Renewables to Generate Heat and Power.................................................................................... 19

7.2 Hydrogen Production .................................................................................................................. 21

7.3 Power Cogeneration .................................................................................................................... 21

8 Conclusion .......................................................................................................................................... 22

References................................................................................................................................................. 23
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List of Figures

Figure 1. Average water and drilling depth in the Gulf of Mexico over time. ............................................. 3

Figure 2. Levelized cost of various utility-scale generation technologies. ................................................... 5

Figure 3. Total energy subsidy by country, 2016. ........................................................................................ 9

Figure 4. Schematic for a comprehensive approach to electrification of the wellpad and platform 

via microgrids ........................................................................................................................ 12

Figure 5. Natural gas transportation system................................................................................................ 16

Figure 6. Energy consumption in oil and gas industry................................................................................ 19

Figure 7. Energy use by refinery process.................................................................................................... 20
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1 Introduction

Petroleum (including both oil and gas) heats our homes, drives our transportation system, 

generates our electricity, and makes modern life possible. Continued demand from developed 

countries along with growth from developing economies implies demand for oil and gas will 

likely continue to increase (International Energy Agency 2017). Under current policies, global 

oil demand in 2040 is expected to be roughly 26 million barrels per day greater than in 2016 

(International Energy Agency 2017).

1

As demand is increasing, conventional oil and gas reserves are decreasing, leading to a shift in 

production to unconventional sources and a growing use of enhanced oil recovery (EOR) 

techniques. Production from unconventional reserves and the use of EOR raises the energy 

intensity of an already energy intensive industry. Nearly 10% of oil is used in the production, 

transportation, and refining process (Halabi, Al-Qattan and Al-Otaibi 2015). This number is even 

higher for many unconventional sources—it takes a quarter of a barrel of oil to produce a barrel 

of heavy oil (Wesoff 2015). Energy used to produce, transport, and refine oil represents major 

operations costs. Furthermore, many oil and gas companies have set goals or made corporate 

level commitments to reduce their greenhouse gas emissions, in part to address issues raised by 

in national and global studies (USGCRP 2017), (IPCC 2018). The petroleum industry faces the 

difficult task of meeting growing demand and growing operational energy needs while reducing 

operations emissions.

One way to meet growing energy demand and production energy intensity, while also meeting 

emissions targets, is to integrate renewable generation technologies into oil and gas operations. 

Incorporating renewable energy technologies and otherwise reducing the amount of fossil fuels 

used to produce, transport, and refine petroleum can decrease both energy costs and emissions, 

as well as preserve oil and gas resources for their highest value uses.

The oil and gas industry has several aspects that are conducive to integrating renewable energy 

technologies. Production facilities are often both in remote locations and require large amounts 

of electricity that could be generated with renewable sources (wind, solar). EOR and oil refining 

also require large amounts of heat, which may be supplied by renewable thermal technologies

(solar thermal, geothermal). Use of waste heat or gas to run cogeneration facilities can, in some 

cases, also be economic.

Renewable energy technologies are already integrated in some oil and gas operations.

Furthermore, the combination of increasing energy intensity in the petroleum industry and 

dramatic decreases in costs for many renewable energy technologies is shifting the economic 

calculus in favor of more integration. However, renewable energy technologies are not 

applicable in all cases. Renewable energy technologies must be both reliable and economically 

competitive to be commercially viable.

This paper provides an overview of where renewable energy technologies can be integrated into 

oil and gas operations. The rest of this paper is divided into seven sections. The first section 

 

1 This represents a 27% increase from the average demand in 2016 of 96.2 million barrels per day. 
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discusses trends that are leading to an increase of renewable technology integration in oil and gas 

operations. The second section provides an overview of key challenges to renewable integration 

and discusses factors that determine if a given technology can be reliably and affordably 

integrated. The third section discusses relevant government policies and social considerations 

that influence the relative benefits of renewable integration. Sections four, five and six discuss 

opportunities for renewable technologies to be integrated into upstream production, midstream 

transportation, and downstream refining processes, respectively. The final section summarizes 

key findings and concludes.
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2 Current Trends and Growing Opportunities

Three parallel trends are increasing the profitability of renewable technology integration in oil 

and gas operations. The trends are:

1. Depletion of higher-quality oil reserves leading to an increased energy intensity of 

petroleum operations

2. Environmental leadership in the oil and gas industry

3. Falling costs for renewable generation technologies. 

This section analyses each trend and discusses the implications for renewable integration.

2.1 Depletion of High-Quality Oil Reserves

In the early days of the petroleum industry, shallow oil and gas reserves with ample reservoir 

pressure were in abundant supply. Today, easy-to-reach oil and gas resources are largely 

depleted. Remaining reserves are marked by deeper reservoirs, lower pressures, and lower 

quality. As an example, Figure 1 displays the increase in average water and well depths in the 

Gulf of Mexico. Deeper water and deeper wells increase both the complexity and the energy 

intensity of operations. The trend toward production from lower-quality reserves may also be 

seen in terms of the increased exploitation of heavy oil and tar sands and the increased use of 

EOR techniques—the injection of gas, heat, or liquid to increase field recovery rate. 

Figure 1. Average water and drilling depth in the Gulf of Mexico over time. Data from (BOEM 2017)
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While sufficient petroleum resources remain to meet demand for the foreseeable future, the shift 

toward marginal reserves increases the energy intensity of production. A 2017 study of five large 

petroleum fields concludes that the net energy ratio (NER)—the ratio of energy produced to the 

energy used to produce it—for each field declined by 46% to 88% over the last four decades 

(Tripathi and Brandt 2017). An in-depth analysis of conventional natural gas production in 

Canada shows a similar trend, with the ratio of energy output to energy input falling by roughly 

half from 1993 to 2009 (Freise 2011). A combination of declining field production and increased 

energy expenditures on enhanced recovery methods contributed to the decline in NER (Tripathi 

and Brandt 2017). 

Lower-quality reserves lead to higher energy intensity in production, transportation, and refining 

of petroleum. This leads to more demand for energy in each stage of the petroleum supply chain, 

which in turn leads to more possibilities for renewable technology integration to reduce energy 

costs. Along with cost savings, renewable technologies can reduce emissions, which is becoming 

an increasingly important factor.

2.2 Environmental Leadership in the Oil and Gas Industry

Industrial oil and gas practices have continued to advance to meet or exceed environmental 

regulations. Adverse incidents are rare but sometimes of high consequence. It is well recognized 

that oil and gas operations emit pollutants, and continuous or episodic activities or incidents may

lead to environmental degradation. Improperly drilled or completed wells can lead to oil spills,

contaminated water spills, and methane leaks. Machinery such as compressors and diesel 

generators increase noise and air pollution. Operations can lead to traffic congestion, and drilling 

processes can contaminate water supplies. Finally, petroleum refining processes emit gases 

including carbon dioxide, carbon monoxide, methane, organic compounds, nitrogen oxides, 

sulfur dioxide, and hydrogen sulfide. Meeting environmental regulations can be costly, and a 

failure to meet requirements may lead to fines and impact a firm’s social license to operate.

Operations occurring in closer proximity to urban centers and suburban developments, as well as 

a growing awareness of the environmental effects of operations—both local effects such as air 

pollution and induced seismicity and global effects such as climate change—are further 

increasing the importance of environmentally sound production practices.

The petroleum industry already recognizes this fact and has been taking a leading role in 

reducing the environmental impact of operations. Due to industry action, greenhouse gas 

emissions from the major private oil companies fell by 13% between 2010 and 2015 (Hirtenstein 

2017) and methane emissions from natural gas wells fell by 40% between 1999 and 2012 

(Bluestein, et al. 2015). Furthermore, many oil companies have set goals for additional emissions 

reductions. Because of the falling costs, renewable energy technologies could become important 

tools for the goals of meeting additional energy demands and stricter emission standards while 

reducing fuel usage and operations costs.

2.3 Falling Renewable Energy Costs 

Price declines in the last decade have revolutionized the economics of renewable energy 

technologies. In 2009, the average levelized cost of electricity from solar photovoltaics (PV) was 

more than seven times the cost in 2017. Figure 2 displays the steep cost decline of electricity 
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produced from wind and solar. Whereas power from wind and solar used to be prohibitively 

expensive, they are now in some cases the lowest cost source of electricity. If expected continued 

future cost declines for electricity from wind and solar are realized, generation from these 

sources will become even more competitive in the coming years. Furthermore, battery storage 

technology and technology for demand-side management, which can compensate for generation 

variability, have also seen remarkable cost declines.

Figure 2. Levelized cost of various utility-scale generation technologies. Data from Lazard 

Levelized Costs of Energy reports from 2008–20172

The result of renewable energy cost declines is a paradigm shift in how renewable technology 

integration in oil and gas operations can be viewed. Whereas 10 years ago renewable technology 

was only applicable to cases where diesel or gas turbines could not be readily deployed, going 

forward renewable technology will, in a growing number of cases, be the lowest-cost solution. 

An understanding of where renewable generation is applicable and may be integrated can lead to 

both lower environmental impact and lower operation costs.

The following section discusses challenges to integrating renewable energy technologies into oil 

and gas operations. A solid understanding of these challenges helps make clear where renewable 

technologies are and are not applicable and where further development can help overcome these 

challenges.

 

2 Bands for wind and solar represent low and high cost estimates. Because high cost estimates for coal and natural 

gas incorporate the cost of carbon sequestration, the figure uses low cost estimates instead of midpoint estimates for 

these technologies to better capture current production costs. Cost assumptions can be found in (Lazard 2017).
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3 Challenges to Renewable Integration

Oil and gas operations are highly intricate, requiring coordination among multiple contractors, 

operators, and government agencies. Operations are capital intensive and require machines that

operate reliably. The industry is also very competitive, with constant pressure to reduce costs. 

For renewable technologies to integrate into oil and gas operations, they must meet strict 

reliability and affordability metrics. 

Cost has historically been the primary factor deterring renewable integration and is still the most 

important factor in determining whether a new technology can be integrated. However, even in 

cases where renewable generation is the lowest-cost solution, production variability and 

reliability concerns are still significant barriers to overcome. Operational considerations and 

differences in industry knowledge between oil and gas operations and renewable energy 

operations place an additional barrier to integration.

3.1 Variability of Generation

The effect of variability on operations is a large determinant of whether renewable technology 

can be integrated. Many operations along the supply chain require continuous power. Oil rigs, 

pipeline compressors, and petroleum refineries operate 24/7, regardless of whether the sun is 

shining or the wind is blowing. In these cases, renewable generation technologies can sometimes 

offer operational savings by being configured into a high reliability hybrid system with backup 

diesel generators, gas turbines, or battery storage. However, this potentially increases system 

costs and complexity. In other cases, such as steam injection for EOR, variability of generation 

has little effect on production since steam can be produced and then stored (Sandler, Fowler, et 

al. 2014). Use cases where variability in generation does not affect production have the highest 

potential for renewable integration.

While use cases where variability does not affect production are ideal, there are several methods 

for mitigating the effects of variability. In some cases, fuel savings alone can make renewable 

generation viable. High diesel costs and low efficiencies of natural gas reciprocating engines and 

single cycle turbines can lead to renewable integration being cost effective even when backup 

generation capacity is required (Korpas, et al. 2012). Battery storage technologies can also 

provide a solution in some cases. Many oil field operations, such as powering well sensors and 

lights and cathodic protection of pipelines from corrosion, employ solar power combined with 

battery storage (Halabi, Al-Qattan and Al-Otaibi 2015).

3.2 System Reliability 

The petroleum industry requires high levels of reliability. Gas pipelines, for example, have much 

higher reliability of operations than the electricity grid, which itself has a high standard of 

performance (Greenblatt 2015; Liss and Rowley 2018). While renewable generation is well 

proven and shown to be reliable in a wide range of settings, systems for integrating renewable

energy technologies into oil and gas operations often do not have an equally proven track record. 

Furthermore, reliability concerns are compounded by renewable generation variability. Systems 

may have to be designed to operate under a wide range of weather scenarios. Higher tolerance 

for extreme operating conditions and high reliability requirements (as well as space or weight 

constraints in some instances) raise costs, implying a renewable-generation-based system may be 
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uneconomic even if it can provide energy at the lowest cost on average. More research and pilot 

projects can bridge this gap in understanding and substantiate that renewable systems can meet 

reliability standards. 

3.3 Operational Considerations

Oil and gas operations are often subject to harsh conditions. Machinery must be able to withstand 

weather and temperature extremes and must be able to operate for several years before 

replacement. For a technology to be scalable, it must be able to operate under a variety of 

settings. Technologies that are robust and operate in a variety of settings are therefore most 

easily integrated.

Petroleum operations are very complex. Systems that add additional complications may be 

unsuited for practical applications even if they offer cost savings. Turnkey solutions that do not 

add to operational complexities can be most readily integrated. The ideal technology for 

integration in oil and gas operations is a system that can be installed easily and can operate costeffectively with little to no maintenance.

Lastly, petroleum engineering is highly specialized and often requires a different skillset than 

that required for operations of renewable generation technologies. Along with research to ensure 

reliability, work is required to bridge the gap in industry knowledge between the petroleum and 

renewable energy industries, such as ensuring that gas and oil operations personnel are trained in 

operational aspects of renewable technologies as applied to gas and oil operations .
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4 Government Policies

Private oil companies have an obligation to generate returns for their shareholders, and national 

oil companies have an obligation to generate revenue for their country. Thus, renewable 

integration must pass a test for cost effectiveness. However, the operating regulator and fiscal 

environment (e.g., tax codes), along with government policies and social environment, can have 

direct impacts on profitability. Policies such as emission regulations can greatly enhance the 

value of renewable technology integration, while policies such as fuel subsidies diminish their 

applicability. This section provides a brief overview of major policy considerations, which may 

affect the value of renewable integration.

Almost every country has implemented policies supporting renewable generation technologies. 

All but 11 countries have renewable energy targets, and most countries have renewable 

investment and or renewable production tax credits along with public investment or loans to 

support renewable energy (REN21 2017). The United States, for example, has a 30% federal 

investment tax credit (ITC) for qualifying renewable generation technologies and a production 

tax credit for many renewable generation technologies that do not receive the ITC. Several state 

and local policies further support renewable generation. Combined, these policies significantly 

increase the economics of renewable generation projects. 

As renewable energy costs have fallen to the point where renewable prices are now in many 

cases competitive with other generation technologies, production and ITCs have been steadily 

phased out in many cases. Further phaseouts are planned and expected in the coming years. 

However, while tax credits will likely be lower in the future, the economics of zero-emissions 

generation may become more compelling in the coming years if carbon emission pricing and 

emission-reduction regulations are further adopted.

While renewable subsidies and emissions prices raise the value of renewable integration, some 

policies reduce the relative value of renewable technologies. The most notable of such policies 

are subsidies on electricity, oil, or natural gas. This is important as many of the largest oilproducing countries also have the largest fossil fuel subsidies. Figure 3 displays countries with 

the highest per capita fossil fuel and electricity subsidies. There is a clear correlation between 

petroleum-producing countries and countries with high levels of such subsidies. 
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Figure 3. Total energy subsidy by country, 2016. Figure adapted from (International Energy 

Agency 2017)

Energy subsidies for traditional fossil fuels reduce the costs of producing heat and electricity for 

oil and gas operations, but they can also offer opportunities for renewable technologies (El-Katiri 

and Fattouh 2017). Fiscal costs of energy subsidies are leading to pressures for subsidy reform 

(Fattouh and El-Katiri 2012). Energy subsidies generally reduce investment in operation 

technologies, meaning operations in countries with energy subsidies are often inefficient

(Fattouh and El-Katiri 2012; Sovacool 2017). Renewable integration in countries attempting 

subsidy reform presents an opportunity to increase operational efficiency and lower costs, 

thereby enabling subsidy reform: subsidy reform can be politically costly and can dramatically 

raise production costs. The Iranian subsidy reform in 2010 raised natural gas prices by over 
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700% and diesel prices tenfold (Fattouh and El-Katiri 2012). Renewable technologies can help 

dampen cost shocks from subsidy reforms. Thus, while energy subsidies diminish the 

opportunities for renewable integration, they present opportunities for countries attempting 

subsidy reform.

The three trends of declining reserve quality (and the resulting increase in energy requirements), 

growing environmental awareness, and falling renewable generation costs are leading to an 

uptake of renewable technologies along the supply chain. Government and industry policies are 

further helping to overcome integration challenges. In the following sections we cover 

applications for renewable integration in upstream, midstream, and downstream oil and gas 

operations. For each section of the supply chain, we discuss current commercial projects along 

with technologies that could soon reach commercialization.
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5 Upstream: Renewable Integration in Oil and Gas 

Production

The oil and gas industry has a long history of integrating renewable energy in operations. One of 

the earliest commercial applications of solar PV panels was their use in warning lights for 

offshore oil installations starting in the early 1970s (Halabi, Al-Qattan and Al-Otaibi 2015). 

Often remotely located and off-grid, oil and gas operations primarily generate power by gas 

turbines or diesel generators, which can be expensive to operate and maintain. As production 

operations can have significant electricity requirements, power generation can be a substantial 

cost. For example, typical power requirements for an offshore platform are between 20 and 35 

megawatts (MW) (Korpas, et al. 2012).

Renewable energy can be used to reduce fuel use and maintenance costs in upstream operations. 

Furthermore, renewable generation can reduce noise, reduce emissions, and increase safety. For 

each stage in the life of an oil field, different renewable technologies can be deployed. The three 

production stages are:

1. Primary Recovery. During primary recovery, there is sufficient well pressure for oil and 

gas extraction. Artificial lift methods such as electric submersible pumps (ESPs) and rod 

pumps are often used to increase output. About 5%–15% of reserves are extracted during 

primary recovery (Abromova, et al. 2014).

2. Secondary Recovery. As well pressures fall, production moves into the secondary 

recovery phase. Injection fluids or gas are used to increase reservoir pressure. An 

additional 10%–20% of reserves can be extracted from secondary recovery (Veld and 

Phillips 2010).

3. Tertiary Recovery. Also known as EOR, tertiary recovery consists of a variety of 

methods to stimulate production. Examples include: hydraulic fracturing, steam injection, 

in-situ combustion, and chemical injection. An additional 20% of total initial reserves 

may be extracted during tertiary recovery.

An individual field may not experience all three production regimes, and separate wells within a 

field may be in different regimes at any given period. However, the separation is a useful 

construct for both understanding general production stages and understanding where renewable 

generation technologies may be integrated. 

Energy requirements vary throughout the life of the field. Operations energy intensity tend to be 

low during the primary recovery phase and then increase as well pressure declines. Hence, older 

fields, in the secondary and tertiary recovery phase, tend to have higher energy requirements than 

fields in the primary production phase. However, all phases in the production life cycle, along 

with drilling operations, offer opportunities for renewable technologies to lower costs and 

emissions.

5.1 Electrification of Drilling and Primary Recovery

Drilling entails significant short-term energy requirements. A single drilling rig can require more 

than 1 MW of power to operate (Quinlan, et al. 2011). As drilling operations only last a few 

weeks, these high-power requirements are only needed for a relatively short duration. Primary 
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recovery operations, on the other hand, have relatively lower energy requirements that are 

sustained over several years. 

The energy for drilling and primary recovery operations are often provided by diesel or natural 

gas generators. Diesel fuel requirements for drilling and constructing a conventional oil well 

typically range between 18,000 and 24,000 gallons (Clark, et al. 2011). For shale gas wells, fuel 

consumption is generally much higher, often requiring more than 50,000 gallons of diesel fuel 

per well and requiring more than 80,000 gallons in some plays (Clark, et al. 2011). Renewable 

generation can reduce or eliminate the need for a generator, which can result in substantial fuel 

savings. 

When operations are sufficiently close to electrical lines, the electricity grid can be used to power 

operations. Using electricity can reduce noise, emissions, and traffic congestion, which can be 

especially important when operations are close to urban centers. An electrical connection also 

allows for renewable energy to be integrated into various points of operations via a microgrid.

Microgrid solutions empower users to integrate distributed generation into a versatile, reliable,

and environmentally friendly operation. 

Figure 4. Schematic for a comprehensive approach to electrification of the wellpad and platform 

via microgrids

Oil operations are frequently conducted in areas with available renewable energy resources. Oil 

field and wellpad equipment could be converted to electric power and then connected via a 

microgrid with a controller that optimizes multiple clean power sources (see Figure 4). This 

approach has been successfully implemented at remote military bases, communities, and islands

and could be adapted to such an industrial process with known energy demands and available 

resources. Power sources could consist of solar PV/wind systems, fuel cells, energy storage, 
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hydrogen, field gas, or even grid power. This approach reduces leaks and emissions, provides 

resiliency during outages, and optimizes for least cost.

A notable example of where renewable technologies can be integrated into upstream operations 

is to power artificial lift pumps. When there is not enough well pressure for oil to flow to the 

surface, a rod beam artificial lift pump—often referred to as a “sucker rod pump” or a “Jack 

pump”—is used to assist extraction.

3 In many areas, rod beam pumps are used extensively. For 

example, more than 80% of oil production wells operating in the western United States are 

installed with a rod beam pump (Endurthy, Kialashaki and Gupta 2016). Solar power, combined 

with a capacitor to store regenerative power during the rod down-stroke, can be used to power a 

rod beam pump. Test cases have shown significant potential energy savings (Endurthy, 

Kialashaki and Gupta 2016), and solar powered oil pumps are now beginning to see commercial 

operation (Healing 2015). Combined with battery storage, solar power pumps could be 

applicable to off-grid locations with sufficient sunlight. 

5.2 Renewable-Energy-Powered Secondary Recovery

Renewable generation can be especially well suited to powering water injection pumps to 

stimulate oil recovery because production from water injection is not significantly affected by 

injection variability (Feller 2017). An especially important potential application is using offshore 

wind power to power water injection pumps.

By one analysis, offshore wind was found in 2012 to be an economic and environmentally sound 

option for supplying electricity to offshore oil and gas platforms in some cases (Korpas, et al. 

2012). Costs for offshore wind generation have fallen significantly since then and are anticipated 

to continue to decrease as the technology matures. The average strike price for European 

offshore wind projects that come online between 2021 and 2025 is less than half the strike price 

for similar projects that have or will come online between 2016 and 2020 (Musial, et al. 2017).

As wind costs fall, it will become economically attractive to substitute power from diesel and gas 

generators with power from wind platforms. Finally, wind integration reduces carbon emissions, 

which can be beneficial to countries that are attempting to meet climate targets and in areas that

price carbon emissions. 

Wind-powered water injection can provide water injection far from the platform, which reduces 

the need for lengthy water injection lines and can eliminate the need for costly modifications for 

oil platforms not initially designed for water injection. The Wind Powered Water Injection 

project recently completed an initial testing phase in which it was shown that wind power can 

provide water injection at competitive prices (Feller 2017). 

5.3 Concentrating Solar and Geothermal Heat for Tertiary Recovery 

(EOR)

Tertiary recovery, or EOR, presents several opportunities for renewable integration. Renewable 

technologies can both provide energy for and generate energy from EOR processes. Land and 

 

3 For more information about sucker-rod lifts and beam-pumping systems, see http://petrowiki.org/Sucker-rod_lift. 
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solar irradiance permitting, concentrated solar can be an economic means of generating steam for 

EOR. Geothermal cogeneration can also produce electricity from latent heat in wells.

Thermal EOR consists of injecting steam into the oil reservoir to facilitate flow by reducing the 

viscosity of the oil. Natural gas is used as an energy source to produce steam, which is then 

injected into the reservoir. Solar thermal EOR substitutes natural gas with concentrated solar 

power (CSP) as the energy source for producing steam (Zhong and Bazilian 2018). Troughshaped mirrors, sometimes housed in a protective greenhouse, concentrate sunlight to generate 

steam with temperatures up to 640°F (Sandler, Fowler, et al. 2014). 

CSP technologies are well suited for thermal EOR. There is significant overlap between regions 

with high solar radiation and large petroleum reserves (Wang, O'Donnell and Brandt 2017). Due 

to latent heat stored in the reservoir rock, oil recovery rates were found to not be greatly 

impacted by solar variability (Sandler, Fowler, et al. 2012). Finally, solar thermal EOR has lower 

capital costs than CSP for electricity generation because solar thermal EOR does not require a 

turbine to convert steam to electricity, which greatly reduces project cost and complexity. 

While CSP capital costs are significantly higher than for a comparable natural gas system, fuel 

cost savings have been found to make solar thermal EOR competitive with traditional natural gas 

EOR in some cases (Sandler, Fowler, et al. 2014). The profitability of solar thermal EOR relative 

to alternatives varies with natural gas prices, cost of capital, and field characteristics, such as the 

amount of solar radiation and expected field lifetime. There is generally an alignment between 

oil reserves and solar potential, especially among countries in the Middle East. Estimates for 

solar thermal projects used for petroleum EOR could be economically viable and range from 19–

44 gigawatts (GW) (Wang, O'Donnell and Brandt 2017).

The technology for integrating CSP into oil production is now commercially viable in some 

locations. The first major project to integrate CSP into oil production was in California through 

former Chevron subsidiary BrightSource (Moritis 2011). The pilot project began operation in 

2011 and operated for 4 years.

More recently, the Miraah project—a $600 million joint venture initiated in 2015 between the 

government of Oman and the company GlassPoint Solar—has begun producing solar steam for 

the Amal oilfield. When completed, the project will be the largest concentrated solar project in 

the world, with a capacity exceeding 1 GW and a production of 6,000 tons of steam per day 

(Wesoff 2015). Successful completion and operation of the Miraah project would prove the 

economic viability of solar thermal EOR at scale and lead to the adaption of similar projects in 

other locations. 

Mature oil wells can produce up to 50 barrels of water per barrel of oil (Xin, et al. 2012). Water 

extracted from a well has naturally raised temperatures due to geothermal heating. While for 

most wells the heating is not significant—80% of wells have temperatures below 176°F 

(80°C)—in some instances, temperatures can exceed 400°F (~200°C) (Augustine and 

Falkenstern 2012). Steam can be used to generate electricity, provide field heating, and can be 

reinjected for EOR. While near-term prospects for geothermal cogeneration are limited, in some 

cases they can provide economic benefits (Augustine and Falkenstern 2012). In addition to heat 

and electricity generated, geothermal cogeneration has the additional benefit of extending field 
15

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life. Extending a field’s lifetime delays well abandonment costs, which improves field 

economics.

Steam injection and geothermal energy have important synergies. Steam injection leads to higher 

produced water temperatures than for conventional fields (Ziabakhsh-Ganji, et al. 2018). 

Additional energy requirements for steam injection also lead to greater demand for the electricity 

and heat produced from geothermal generation (Ziabakhsh-Ganji, et al. 2018). A trend toward 

deeper wells, which produce higher water temperatures, an increased use of steam injection 

EOR, and an increase in the pricing and regulation of carbon emissions indicate a growing 

opportunity for geothermal cogeneration in the future. 
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6 Midstream: Renewable Integration in Oil and Gas 

Transportation

Midstream transportation uses less energy than upstream or downstream operations and 

correspondingly has the smallest potential for renewable integration (Halabi, Al-Qattan and AlOtaibi 2015). Furthermore, oil transportation by ship, rail, and truck currently have limited 

opportunities for renewable technologies. That being said, there are still several opportunities for 

renewable technologies to have a meaningful impact on operation costs and emissions. 

A vast network of pipelines transport oil and gas from producers to refineries and end users. In 

the United States alone there are more than 300,000 miles of mainline natural gas pipelines with 

1,400 compressor stations (Federal Energy Regulatory Commission 2015) and approximately 

55,000 miles of crude oil trunk lines and 95,000 miles of refined products pipelines, which 

combined transport more than 40 million barrels of liquids per day (Pharris and Kolpa 2007). 

Figure 5 displays the U.S. natural gas transportation network along with major fields. As can be 

seen, pipelines can transport supply significant distances from production areas to major demand 

hubs.

Figure 5. Natural gas transportation system. Figure produced using data from (EIA 2018)

Renewable technologies are already integrated into some pipeline operations, with solar energy 

powering sensors and providing cathodic corrosion protection4 (Pharris and Kolpa 2007).

However, as renewable costs decline and the technologies improve, additional opportunities for 

 

4 A cathodic protection system uses charged anodes attached to the pipe to prevent the pipe from corroding.
17

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integration arise. One of the opportunities is natural gas pipeline compressor electrification, 

compressor heat recovery, and electricity production from expansion turbines.

6.1 Compressor Electrification

As most oil pumping stations use electric motors for the prime mover, these systems are 

automatically using more renewable power as the grid greens (Pharris and Kolpa 2007). Natural 

gas pipelines, however, are primarily powered by gas engines or turbines (Greenblatt 2015). 

Replacing gas engines and turbines with electric motors could increase renewable integration and 

reduce noise, fuel use, and emissions. 

Electric motors have low operating costs and more efficiently accommodate a wide throughput 

range than gas engines or turbines (Greenblatt 2015). As natural gas plants are ramped to account 

for increased variable generation, the variability of natural gas demand will increase, meaning 

pipelines will likely deal with larger swings in throughput. This trend supports the use of more 

electric motors to power natural gas compressor stations.

An important barrier to using electric motors to power compressor stations is a concern of 

reliability. While electric motors are highly reliable, the electric grid does not always meet the 

operation standards of the oil and gas industry, especially in remote areas where compressor 

stations are often located (Greenblatt 2015). Work on increasing grid reliability, reductions in the 

price of microgrid technologies, and rewarding lower emissions from electric motors could help 

motivate a shift toward using more electric motors. 

6.2 Compressor Heat Recovery

Gas turbines used to power natural gas compressor stations generate a considerable amount of 

heat. In some cases, this heat can be reused to generate power or used in industrial processes. 

There are currently 12 power generation systems, totaling 64 MW of electricity capacity, 

installed at natural gas compressor stations in the United States (Elson, Tidball and Hampson 

2015). An estimated 40 MW worth of potential additional projects currently offer expected 

paybacks of less than 5 years (Elson, Tidball and Hampson 2015). However, changes in market 

conditions could significantly increase the economic opportunity for compression station heat 

recovery. Estimates of the technical potential for electricity generated from compressor station 

heat recovery range from 500 MW (Hedman 2008) to 1.1 GW (Elson, Tidball and Hampson 

2015). As economies of scale are present, large systems with high utilization rates are most 

applicable (Hedman 2008).

A disadvantage of compressor cogeneration is the variability of output. Compressor stations do 

not always run and therefore would not always generate heat or electricity (Greenblatt 2015). If 

extracted heat is used for industrial processes, then an associated process must be able to operate 

with variable heat. Similarly, if electricity generated provides off-grid power, then the consumer 

must be able to handle variable generation. 

6.3 Turboexpanders

Compressors raise the gas pressure to between 500 and 1,400 pounds per square inch (psi) to 

transport natural gas long distances. While higher pressures increase the economics of 

transportation, and while power plants and some industrial customers use high pressure gas, most 
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customers require pressures well under 10 psi (CPS Energy 2011). The potential energy created 

from raising pipeline pressure is lost when the pressure is stepped down at distribution hubs. A 

turboexpander can capture this potential energy to generate electricity.

Turboexpanders are used in a variety of industry applications. Unfortunately, they are generally 

considered uneconomic for use in natural gas pipelines under current market conditions 

(Greeenblatt 2015; Hedman 2008). Primary challenges include the required cost of preheating 

the gas before expansion and pipeline operations causing variability in output (Hedman 2008). 

Turboexpanders have the benefits of being a proven technology that emits significantly less 

criteria and other gasses per megawatt-hour generated compared to coal and gas power plants. 

Turboexpanders may therefore see economic opportunities in regions that price or regulate 

emissions. 
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7 Downstream: Renewable Integration in Oil Refining

Oil refining is a complicated process that requires large capital investments and has significant 

energy requirements. The refining process requires heating oil to break carbon bonds and remove 

impurities. More than 90% of energy use in refining goes toward direct heating and steam 

generation (Brueske, Sabouni and Zach 2012). As Figure 6 shows, the majority of energy used in 

the petroleum supply chain is from burning onsite oil to process and refine petroleum. Due to the

large production volumes and high temperatures required, petroleum refining is the largest 

consumer of fuel and the largest generator of onsite greenhouse gas emissions in the U.S. 

manufacturing sector (Halabi, Al-Qattan and Al-Otaibi 2015; Brueske, Sabouni and Zach 2012; 

EPA 2018).

Figure 6. Energy consumption in oil and gas industry. Adapted from (Halabi, Al-Qattan and AlOtaibi 2015)

Energy usage in the refining process is a major operations cost. In 2010, the U.S. petroleum 

refining industry spent $9 billion on energy purchases, equating to roughly 50% of total noncapital costs (Worrell, Corsten and Galisky 2015). Furthermore, due to shifts toward increasingly 

heavy and sour oil, refining energy requirements are rising (Karras 2010). Emissions from 

refineries also increase as oil quality decreases, which increases the difficulty of meeting 

environmental regulations (Karras 2010).

Oil refineries can incorporate renewable energy technology into operations by using renewable 

sources to generate heat and electricity, and to produce hydrogen that is an input in the refining 

process. Oil refineries can also use excess heat to generate electricity. 

7.1 Renewables to Generate Heat and Power

Each step along the refinery process requires different temperatures and pressures. Oil is first 

heated to 200–300°F (90–150oC) and washed with water to remove salt and other suspended 

solids (Worrell, Corsten and Galisky 2015). Atmospheric distillation then separates products 
20

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based on their boiling point in the crude distillation unit (CDU), where crude oil is heated to 

temperatures around 750°F (390oC) (Worrell, Corsten and Galisky 2015). Heavy fuel oils are 

further treated in the vacuum distillation unit (VDU) at temperatures between 730 and 850°F

(390 and 450oC) (Worrell, Corsten and Galisky 2015). The low-pressure environment of the 

VDU lowers the heavy oil boiling point to facilitate separation. Additional processing occurs in 

the fluid catalytic cracker (FCC), the hydrocracker, and coking unit. Each of these processes 

separate heavier oil products into lighter and more valuable products. 

Hydrotreating mixes hydrogen with the feedstream at temperatures between 500 and 800°F (260

and 460oC) to remove sulfur (Worrell, Corsten and Galisky 2015). A catalytic reformer uses a 

catalytic reactor to produce high octane gasoline and hydrogen. Additional processes, such as 

alkylation, which uses steam, power, and various acids to produce alkylates, are also common. 

Figure 7 displays yearly estimated energy use by refining process for U.S. refineries in 2012. 

Hydrotreatment and the CDU account for nearly 50% of total energy requirements.

Figure 7. Energy use by refinery process. Figure adapted from (Worrell, Corsten and Galisky 2015)

When land and sufficient sunlight are available, CSP can be used to produce heat and steam. 

While CSP may be unsuited for some high-end temperature requirements, steam production and 

heating up to 750°F (400oC), and in some cases up to 1,020°F (550oC), can be provided by 

current CSP technologies (Kurup and Turchi 2015). While most refineries do not meet the 

criteria of having both available land and abundant sunlight, the potential for CSP integration is 
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still large due to the significant energy intensity of oil refining. Estimated market potential for 

solar thermal used in oil refining range between 21 and 95 GW (Wang, O'Donnell, and Brandt 

2017). Along with high heat requirements, oil refineries have large electricity loads. Increasing 

the renewable energy used to run machinery, such as compressors, pumps, circulators, and 

controllers, can reduce operation costs and carbon emissions.

7.2 Hydrogen Production

Refineries use hydrogen in several production processes. Most importantly, hydrogen is used in 

the hydrotreatment process to lower the sulfur content of diesel fuel. Refinery demand for 

hydrogen has increased as demand for diesel fuel has risen and sulfur-content regulations have 

become more stringent (Hicks and Gross 2016). Hydrogen used in the refining process increased 

by more than 50% between 2008 and 2014 (Hicks and Gross 2016).While hydrogen is produced 

as a co-product of the catalytic reformation of gasoline, demand for hydrogen exceeds supply 

produced from the refining process itself (Philibert, Cédric 2017). 

Hydrogen is produced primarily through steam-reforming natural gas (Likkasit, et al. 2016). 

Concentrated solar energy can complement or replace conventional fuel as the heating source for 

this process (Likkasit, et al. 2016). Hydrogen produced by electrolysis powered by renewable 

generation can also be used to meet oil refinery demand (Philibert, Cédric 2017). Costs of 

hydrogen production from renewables is currently higher than conventional production methods 

(Likkasit, et al. 2016). However, if renewable generation costs continue to fall, and if regulations 

on greenhouse gas emissions increase, hydrogen production may become an effective means of 

using renewable technologies to reduce costs and reduce emissions from oil and gas operations.

7.3 Power Cogeneration

Oil refining runs at high temperatures and elevated pressures. This offers numerous opportunities 

for heat recovery and power recovery. Cogeneration is already common within the refining 

industry, representing almost 13% of all industrial cogenerated electricity (Worrell and Galitsky 

2005). However, the potential for cogeneration is still far from being fully exploited. Power 

recovery systems can reduce a refinery’s energy intensity by 7%–10% (Worrell, Corsten and 

Galisky 2015). 

The primary application for power recovery is with the FCC (Worrell, Corsten and Galisky 

2015). The hydrocracking process presents another opportunity for power recovery. Power is 

generated from the pressure difference between the reactor and fractionation stages (Worrell, 

Corsten and Galisky 2015). Integration of a turboexpander on the hydrocracker at the Zeeland 

Refinery in the Netherlands produces 73,000 MWh per year, resulting in a payback period of less 

than 3 years (Worrell, Corsten and Galisky 2015). 

Power recovery offers a means of reducing the energy and carbon intensity of the refining 

process. For many refineries, cogeneration can already offer positive economic returns. If the 

industry seeks to further reduce air emissions, cogeneration may become increasingly beneficial 

as well. 
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8 Conclusion

As oil and gas production shifts toward lower quality and unconventional reserves, energy use 

and emissions from operations are likely to grow in the future. Furthermore, oil and gas 

operations are energy intensive which can have negative environmental impacts. Integrating 

renewable energy technologies into oil and gas operations offers a means of reducing fossil fuel 

use in the production of oil and gas, which can both lower operation costs and reduce emissions

as well as conserve petroleum production for higher value uses. In some cases, renewable 

integration can currently provide a cost-effective and environmentally beneficial way of meeting 

operations energy requirements. If costs of renewable technology continue to fall, the benefits of 

renewable integration would continue to increase.

Renewable technologies can be integrated in all links of the oil and gas supply chain. For 

upstream oil and gas production, the primary applications identified are solar heating for EOR

and other heating requirements, offshore wind to power offshore operations, wellpad 

electrification from solar and wind, and geothermal cogeneration from oil fields. Solar thermal 

generation for EOR and wellpad electrification are already seeing commercial operation. Wind 

power for offshore water injection and geothermal energy production are close to commercial 

operation as well. Combined, these technologies will be useful tools to reduce operation costs 

and emissions.

While midstream transportation offers the fewest opportunities by size of demand for renewable 

integration, renewable technologies can still be beneficially integrated. The use of electric motors 

to power natural gas compressors reduces emissions and reduces operation and maintenance 

costs. Heat recovery is already economic for large compressor stations, and turboexpanders may 

be an economic option as technology continues to advance and operation cost environments 

evolve. 

Oil refineries are the largest consumer of fuel in U.S. manufacturing and the largest generator of 

onsite greenhouse gas emissions in the manufacturing sector. Fuel costs also constitute half of all 

operations costs. Renewable technologies can be integrated to reduce fuel expenditures. Where

land and sunlight are available, solar heating may be used. Renewable energy may also be used 

to produce hydrogen by electrolysis. Finally, further use of power recovery can reduce emissions 

and fuel costs. 

While significant challenges exist to integrating renewable energy technologies into oil and gas 

operations, there are also significant economic opportunities for renewable technologies in the 

petroleum industry. Falling costs and growing energy intensity and environmental concerns are

all leading to more compelling reasons for integrating renewable energy technologies. Oil and 

gas operators would be well served by further analysis of where renewable technologies can be 

beneficially integrated and by working toward further integrating renewable technologies into 

current and future operations. 
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