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Oil and Gas Industry takes steps to reduce its carbon footprint

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As an industry that produces 82 percent of the world’s energy,¹ the oil and gas sector is striving to minimize emissions as well as those from the entire life cycle of its products. Efforts to minimize Scope 1 and 2 emissions are ongoing, from eliminating flaring, to eliminating waste, carbon capture, and underground storage.²

Some of the steps being taken by the industry to reduce greenhouse gas emissions include:

Carbon Capture and Storage (CCS)

Carbon capture and storage (CCS) is a solution for reducing emissions in the oil and gas sector, especially as governments worldwide tighten emissions regulations. As one of the most promising technologies for emissions reduction, CCS involves capturing carbon dioxide (CO₂) emissions from industrial processes and storing them underground. This prevents the release of the captured CO₂ into the atmosphere, significantly curbing the industry’s carbon footprint.

According to the American Petroleum Institute (API), over the last 40 years, the U.S. oil and gas industry’s enhanced oil recovery operations have injected more than one billion tons of CO₂, and experience shows that more than 99 percent of the CO₂ remains safely underground.³ While injection of carbon dioxide has historically been used for enhanced oil recovery operations to produce additional oil resources, the industry is leveraging this technique to advance permanent underground storage.

Additionally, carbon capture usage and storage usage can enable the continued operation of energy-intensive industries while reducing emissions, in turn preventing the many jobs and assets that they support from becoming stranded, according to an API report.

Renewable Energy Investment

Oil and gas companies are increasingly investing in renewable energy projects, such as wind, solar, and biofuels. By diversifying their portfolios and incorporating renewable energy sources, these companies are reducing their reliance on fossil fuels, thus lowering their greenhouse gas emissions.

While the oil and gas industry’s capital spending on lower-emissions alternatives such as renewable electricity, lower carbon-intensity fuels and carbon capture technologies was less than 5% of its upstream spending in 2022, according to the International Energy Agency, that figure is expected to increase.⁴

Methane Leak Detection and Repair

Commonly emitted during oil and gas operations, methane is a far more potent greenhouse gas than CO₂in terms of global warming potential. Improved leak detection and repair practices are not just about reducing emissions but preserving profitability.

To combat this issue, improved leak detection methods, including satellite technology and drones, are employed to identify and repair methane leaks from pipelines and well sites. Analyzing data from sensors can be used to detect leaks and minimize emissions.

Electrification of Operations

Transitioning from diesel-powered equipment to electric machinery is becoming more common in the oil and gas industry. This shift will have the effect of decreasing emissions output from operations.

Drilling and refining operations account for much of the industry’s emissions. The production, transport and processing of oil and gas resulted in 5.1 billion tons (Gt) CO₂ in 2022. These scope 1 and 2 emissions from oil and gas activities are responsible for just under 15 percent of total energy-related greenhouse gas (GHG) emissions,⁵ according to the International Energy Agency.

Many of these processes rely on outdated fossil fuel-powered or pneumatic equipment, making them ideal for electrification. Many oil wells use pneumatic pumps that self-regulate by periodically releasing methane into the atmosphere. Consequently, switching these pumps for electrical alternatives can dramatically reduce emissions from the extraction process.

Responsible Practices

Responsible land and water management practices during drilling and production are vital in minimizing the environmental impact of oil and gas operations. Minimizing water usage and reducing land disturbance during drilling and production are crucial activities to promote responsible resource management and help minimize the environmental impact of the industry.

Energy Efficiency Measures

Energy efficiency is a key focus for many companies in the industry. By optimizing drilling techniques, upgrading equipment, and implementing more efficient practices, companies are reducing their energy consumption and, consequently, their emissions.

Investment in New Technologies

Research and development are driving the industry toward new technologies that will lower ghg emissions at their site or upstream in their value chain. Companies are investing in technologies like hydrogen production, lower carbon-intensity fuels, and new refining. Innovation is the key to a more sustainable energy sector.

Collaboration among industry stakeholders and organizations is essential. By sharing best practices for emissions reduction and working together on innovative solutions, the industry can collectively address its carbon footprint more effectively.

Transparency and Reporting

To demonstrate their commitment to sustainability, oil and gas companies are setting emissions reduction targets. These targets align with international climate goals, and by publicly disclosing them, companies hold themselves accountable for achieving them.

Open reporting of emissions data and progress toward reduction goals is a critical step in building trust and demonstrating the industry’s commitment to sustainability.

In summary, the oil and gas industry is currently at a pivotal juncture. As it continues to evolve, the sector is making a concerted effort to reduce emissions in order to combat climate change.

Implementing energy efficiency and electrification initiatives are about staying competitive in a world that is focused on carbon reduction, industry analysts say. Setting emissions reduction targets and transparent reporting are not just for compliance; they are about earning trust and attracting investors.

It’s increasingly clear that addressing climate change is a strategic imperative. The steps taken by the oil and gas industry to reduce its carbon footprint are not just about good public relations; they are about long-term viability.

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1. S&P Global. Commodity Insights. June 26, 2023. www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/062623-fossil-fuels-stubbornly-dominating-global-energy-despite-surge-in-renewables-energy-institute

2. World Economic Forum. How the Oil and Gas industry can take a life cycle approach to reducing emissions. Aug. 25, 2021. www.weforum.org/agenda/2021/08/oil-gas-industry-lifecycle-approach-reducing-emissions/

3. American Petroleum Institute. “Carbon Capture and Storage: A Low-Carbon Solution to Economy-wide Greenhouse Gas Emissions Reductions.” www.api.org/news-policy-and-issues/carbon-capture-storage

4. International Energy Agency. World Energy Investment 2023. www.iea.org/reports/world-energy-investment-2023/overview-and-key-findings

5. International Energy Agency. Fossil Fuels: Latest Findings. www.iea.org/energy-system/fossil-fuels

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