There is more than one way to achieve a lower carbon future. Countries are taking different approaches, reflecting their unique demand dynamics, capabilities, and cultures. Throughout these energy transitions, oil and gas will remain important parts of the energy mix, to meeting global energy demand affordably and reliably, while contributing towards international climate agreement goals.
Here are six ways the oil and gas industry contributes to a lower carbon future.
1 Reducing emissions in our operations
Greenhouse gas emissions (GHG) – methane and CO2 – are a significant contributor to climate change. We are working to reduce emissions across our operations.
Emissions in our operations come from:
- Exhaust gas from engines, turbines and fired heaters
- Gas flaring (See below)
- Well testing
- Other emissions, such as when CO2is used for enhanced oil recovery (EOR) operations
Accurate and transparent data to enable better performance.
Having access to high-quality, actionable information is the first step in evaluating and improving performance. Our Members track, record, and share their emissions data. These are published annually in our Environmental Performance Indicators Report and help companies benchmark their performance.
The second step is to ensure that all operate to the same high standards.
We participate in global collaborative initiatives and promote best practice and common industry guidelines. Recent guidelines, for example, include methane measurement methodology comparisons, to support Members’ emissions data accuracy.
Together with OGCI and IPIECA, we are developing Recommended Practices for Methane Emissions Detection.
IOGP has been a supporting organization to the Methane Guiding Principles since 2018, and is developing a range of good practice guidance including Guidelines for Methane emissions target setting as well as for detection, quantification, and reporting. We have also endorsed the European Union’s ‘Green Deal’, which aims to achieve climate neutrality by 2050. And the Sustainable Reporting Guidance published in 2020 will help in reducing the carbon footprint of upstream operations around the world.
We’re also focused on reducing energy consumption and targeting energy efficiency and electrification, to help our Members significantly reduce their upstream emissions.
2 Reduce flaring
Flaring is a contributor to GHG emissions.
Although flaring is sometimes necessary, we’re working to reduce flaring across the upstream industry. Flaring happens in several scenarios, including:
- For safety reasons
- During initial start-up operations
- When produced oil contains gas, but there’s nowhere for that gas to go.
- During planned events, such as scheduled maintenance or well workovers
- Equipment malfunctions
Reduce routine flaring
Our Members are reducing flaring in their operations. Together, we support the World Bank Global Gas Flaring Reduction Partnership and its Zero Routine Flaring by 2030 initiative.
Collaborate on best practice and support regulators.
We’re working with IPIECA and the Global Gas Flaring Reduction Partnership (GGFR) on industry flare management guidelines, as well as guidance for governments and regulatory bodies to help us achieve our Zero Routine Flaring goal.
3 Coal to gas switch
Gas for power generation produces about half of the emissions produced by coal and is the ideal partner for renewable energy. Switching from coal to gas for electricity production delivers fast and substantial CO2 emissions reductions.
- Cut emissions from heating by 30%
- Cut emission from power generation by 50%, or to near 100%, with the use of carbon capture and storage.
A reduction in coal use has helped to reduce emissions, but more needs to be done.
Advocating for a cleaner energy future
First, we strongly advocate for switching from coal to gas for power production. In addition, by reforming gas to hydrogen, with CCS, carbon-free, storable energy, at scale, is also within reach.
We support well-designed and well-functioning market-based economy-wide emissions reduction mechanisms, such as emissions trading schemes and CO2 or Greenhouse Gas (GHG) taxes, to further encourage GHG emissions reduction.
4 Investment in renewables
Emissions reduction is essential for the world to decarbonize and meet the Paris Agreement goals.
One of the key ways we can reduce emissions is to produce more clean energy. Our Members have decades’ experience managing infrastructure across many forms of energy.
Investing in renewable energies
As well as supporting gas as a cost-effective alternative to coal, many IOGP Members are investing a growing share of their capital expenditure in low-carbon and renewable energies, services and research including wind, solar, energy storage and biofuels.
Building on decades of experience
The oil and gas industry has the capital and experience to invest in and execute major infrastructure projects globally.
5 Carbon Capture, Utilization, and Storage (CCUS)
Carbon Capture and Storage (CCS) and Carbon Capture and Utilization and Storage (CCUS) have a vital role in a lower carbon emission future, especially if we’re to meet the most ambitious climate scenarios.
- Low-carbon fuels, such as hydrogen and electricity, to be used in transport, homes, and industry
- Emissions mitigation in strategic energy intensive industrial sectors
- Near-zero-emissions or even negative-emissions, when combined with bioenergy
- In many regions, CCUS is the most cost-effective approach to curb emissions in iron, steel, and chemicals manufacturing, which accounts for nearly 20% of global CO2 emissions
- Retrofitting of existing power and industrial plants, avoiding emitting 600 billion tonnes of CO2 over the next 50 years
- The rapid scaling up of low carbon hydrogen
- Almost 15% of emissions reductions in the IEA’s Sustainable Development Scenario.
Large-scale CCS/CCUS is already a reality
Using their geological, engineering and commercial expertise, IOGP Members are working to deploy more new and larger CCS/CCUS projects.
Existing assets, such as pipelines and known geological formations, can be used to transport and store CO2.
IOGP has supported CCS by assessing its potential in Europe and advising the industry on how to facilitate large scale deployment.
6 Clean hydrogen
Due to its versatility, clean hydrogen has often been described as the “missing link” in efforts to make our energy system radially radically cleaner. If made from gas is it termed “blue hydrogen”, if produced from electrolysis of renewable energy it is known as “green hydrogen.” Both types will be needed to help us reach our climate goals as quickly as possible.
- Lower costs than reliance on total electrification of the economy
- The ability to decarbonize sectors that cannot easily convert to electrification
- A way to store or transport “excess” renewable electricity production
- A way to continue to use our gas network infrastructure
Hydrogen has many uses.
Industry – Hydrogen can be used in a wide range of industrial applications as an alternative to current fuels and feedstocks, or as a complement to the greater use of electricity in these applications. In transport (heavy-duty vehicles and in the maritime sector), heating, energy intensive industries such as steel production and in flexible power generation. Hydrogen can be directly used or converted to hydrogen-based fuels, including synthetic methane, synthetic liquid fuels, ammonia, and methanol.
Power generation and storage – Power generation offers many opportunities for hydrogen and hydrogen-based fuels: Hydrogen and ammonia can be flexible generation options when used in gas turbines or fuel cells. At the low-capacity factors typical of flexible power plants, hydrogen (which costs under USD 2.5/kg) is a financially competitive option. In the longer term, hydrogen can play a role in large-scale and long-term storage to balance seasonal variations in energy demand.
Transport – Hydrogen can be used in fuel cells for vehicles or vessels, in a dual fuel mixture with conventional diesel heavy fuel oils (HFO), as a replacement for HFO for use in combustion machinery, and as the basis for producing synthetic jet fuel.
Heating – The largest near-term opportunity in buildings is blending hydrogen into existing gas networks. The potential is highest in multifamily and commercial buildings, particularly in dense cities, where conversion to renewable heat pumps is more challenging than elsewhere. Longer-term prospects in heating could include the direct use of hydrogen in hydrogen boilers or fuel cells.
Clean hydrogen, along with other low carbon technologies, is key for a clean and secure energy future. With both global energy and hydrogen demand rising, this is a crucial time to increase hydrogen production. IOGP is contributing to studies examining how to expand the use of hydrogen – from gas and renewables – in Europe.