The Oil and Gas Industry in Net Zero Transitions

Technology options for the oil and gas

Summary

  • The production, transport and processing of oil and gas resulted in 5.1 billion tonnes (Gt) CO2-eq in 2022, just under 15% of total energy-related GHG emissions and equivalent to all energy-related GHG emissions from the United States. The emissions intensity of the worst-emitting producers is currently five to ten times higher than the best performers. In the NZE Scenario, these emissions are cut by more than 60% by 2030 and the emissions intensity of global oil and gas operations is near zero by the early 2040s, with many individual producers achieving this considerably earlier.
  • Methane emissions account for nearly half of the sector’s current scope 1 and 2 emissions. Tackling methane is the most important measure to reduce these emissions. Other key levers include: eliminating all non‑emergency flaring, electrifying upstream facilities with low-emissions electricity, equipping oil and gas processes with carbon capture utilisation and storage (CCUS), and expanding the use of low‑emissions hydrogen in refineries. The 60% cut in scope 1 and 2 emissions by 2030 in the NZE Scenario requires around USD 600 billion of spending to 2030.
  • The oil and gas industry is investing in many clean energy technologies and a number of options have a close affinity to its existing skills and resources. These technologies address 30% of final energy consumption in the NZE Scenario in 2050 and include:
  • CCUS: the oil and gas industry is involved in 90% of CCUS capacity in operation. CCUS and direct air capture are key technologies to achieve net zero emissions, especially in some difficult-to-decarbonise sectors, but they are not a way to retain the status quo.
  • Low-emissions hydrogen and hydrogen-based fuels: oil and gas companies are partners in a large share of planned hydrogen projects that use CCUS and electrolysis. In the NZE Scenario, low-emissions hydrogen use rises by a factor of 110 to 2030.
  • Bioenergy: more than half of total clean energy spending by the industry in 2022 was in bioenergy as a number of companies took major stakes in bioenergy producers.
  • Offshore wind: around 2% of offshore wind capacity currently in operation was developed by oil and gas companies. Plans are expanding, including for floating turbines that are needed to tap the large wind potential in deep water.
  • Geothermal: this sector shares many similarities with upstream operations, especially for a number of new and emerging technologies. The industry is currently only involved in a fraction of projects, but there are significant growth opportunities.
  • Plastics recycling: a large number of planned chemical plastic recycling projects involve oil and gas companies. The industry can play a key role in reducing the high emissions intensity of chemical recycling today.
  • EV charging: the oil and gas industry is responsible for 15% of global investment in public EV chargers currently. The number of EV chargers increases five to sixfold by 2030 to support the growth of electric light-duty vehicles in the APS and NZE Scenario.
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