While the oil and gas industry may play a vital role in generating and supplying energy globally, it is also a significant contributor to greenhouse gas emissions.
As regulatory pressures grow and consumers and businesses become more mindful of eco-efficiency, scrutiny from investors also grows. As such, taking steps to reduce carbon footprints is mandatory across the industry.
Here, we will look at the strategies those in the oil and gas industry can take to manage carbon emissions effectively.
Leverage Carbon Capture, Utilization, and Storage
Carbon capture, utilization, and storage (CCUS) technologies are some of the most promising tools in the oil and gas industry. These are designed to capture CO2 emissions from industrial processes and power plants before they reach the atmosphere.
The carbon captured by CCUS tools can then be stored underground or reused in enhanced oil recovery (EOR).
Already, companies are investing in CCUS technology to lower their emissions, positioning themselves as innovators in the field. Deoplaying this technology near high-emission facilities improves their impact and helps companies meet their regulatory needs better.
CCUS technology is advancing, creating scalable solutions to help O&G companies reduce costs and improve their efficiency over time.
Optimize Operational Efficiency
One of the simplest ways to reduce energy loss is to look at where it’s wasted. Companies can use advanced analytics, digital twins, and artificial intelligence to enhance their operational efficiencies through the processes of exploration, production, and refining.
Predictive maintenance is one example that minimizes unplanned equipment downtime. By investing time in maintaining machines more effectively, companies can reduce more costly and intensive repairs.
Real-time data monitor can also identify leaks and inefficiencies that contribute to excessive emissions more quickly. Companies can further implement process improvements like heat recovery systems, further reducing energy consumption and emissions.
Electrify Your Operations
Switching from fossil fuels to relying more on electricity to power your operations can also significantly impact how your company manages its emissions. Electrification can lower emissions on its own and can be paired with renewable energy sources to even more significant effect.
More oil and gas companies are deploying electric drilling rigs, switching to electric-powered compressors, and adopting EVs (electric vehicles) in their operational fleets. These steps reduce direct emissions while aligning operations with general cleaner energy goals.
Grid infrastructure becomes more aligned with green energy over time. As it does, the benefits of electrification grow alongside it as the costs and risks of relying on electricity decrease. This drives down the carbon intensity of O&G company operations.
Deployed Renewable Energy Solutions
More companies choose to integrate renewable energy into oil and gas operations as time goes on. Solar panels, wind turbines, and geothermal systems can power remote drilling sites and processing plants.
Some companies lead the way by creating hybrid facilities that combine traditional and renewable energy systems, using the latter to supplement when they cannot power them alone. This reduces emissions and cuts energy costs over time.
Investments in renewables also demonstrate a commitment to sustainability to your clients and stakeholders and help you position your brand publicly as one of the more eco-friendly operations in the industry.
Implement Methane Emission Controls
A potent greenhouse gas, the climate change potential of methane far exceeds the known impact of CO2. As such, many in the industry are focused on reducing the impact of methane emissions.
Tackling methane leaks from pipelines, storage tanks, and processing facilities becomes a greater priority for companies as industry reliance on the gas grows.
Some companies technologies like infrared cameras, drones, and IoT sensors to identity and monitor methane leaks in real time. After detecting these leaks, rapid repair protocols can minimize their environmental impact while preventing the loss of valuable product.
Regulation around methane is growing, such as the EPA’s Methane Rule, which is forcing companies to adopt stricter monitoring and control measures. Implementing more comprehensive methane emission controls keeps you ahead of the regulators.
Foster Innovation in Low-Carbon Technologies
The field of oil and gas requires innovation to continue its further transition to low-carbon operations. As such, many companies invest in technologies like hydrogen production, biofuels, and synthetic fuels to offer working alternatives to traditional hydrocarbons.
Many see potential in blue and green hydrogen, for instance, as clean energy carriers. Oil and gas companies can diversify their own portfolios and potentially future-proof their businesses by integrating these technologies.
More companies are collaborating with research institutions, as well. This may open up gateways to the next-generation technologies that make low-carbon operations much more achievable.
Engage in Carbon Offsetting Programs
Carbon offsetting enables companies to make up for emissions that can’t be eliminated. O&G companies are investing in reforestation, renewable energy products, carbon credits, and more. This allows them to achieve net zero goals more effectively.
Carbon offsetting programs work better when they complement direct emission reductions, rather than replacing them. It’s vital to maintain transparent reporting and third-party verification to ensure the credibility and impact of carbon offsetting programs, too.
Working with trusted partners to implement these programs in your business can improve their efficacy and ensure the best possible public perception of your efforts.
Enhance Supply Chain Sustainability
Aside from directly managing the emissions of your production processes, you can also take a closer look at your supply chain emissions. These often represent a large portion of any oil and gas company’s carbon footprint.
Who you work with matters. Collaborating with your suppliers and contractors can help you reduce emissions much more effectively across the entire chain.
This can include measures like sourcing materials with lower embodied carbon, optimizing your fleet logistics, and more. Set clear sustainability standards that your suppliers and logistics providers have to work within.
Companies that take the time to integrate sustainability criteria into their third-party partnerships can not only reduce their emissions but cut costs, as well.
Embrace Digital Transformation
Digital technology continues to change how companies operate across all industries, including the oil and gas industry. Smart technologies open the way to better decision-making and improve resource efficiency, resulting in lower emissions.
One recent example is the adoption of AI-driven simulations to optimize drilling and production processes. Digital twins, which are virtual replicas of physical assets, improve your asset monitoring and maintenance, as well. Adopting tools like these accelerates sustainability goals and paves the way toward operational resilience.
Strengthen Regulatory Compliance and Reporting
Environmental regulations are a legal requirement for your company. Adhering to them mitigates your legal risk and builds your reputation. Staying ahead of evolving policies, such as the EPA’s methane emissions standard, requires you to make regulatory compliance reporting routine.
Use reporting frameworks to foster transparency and more quickly identify regulatory risks within your business. This helps you not only maintain your environmental goals but also attracts more eco-conscious investors.
Develop Internal Carbon Pricing
Better quantifying the cost of emissions with the help of an internal carbon price can help increase transparency within the company. Understanding the carbon price of existing operations guides investment decisions and shows the direct impact of low-carbon projects.
Internal carbon pricing prepares companies to align their practices with long-term sustainability objectives. It also helps prepare for potential future regulations, as carbon taxes and cap-and-trade systems may become more common in the industry.
Embedding internally determined carbon costs into decision-making processes helps you work on a clean energy mindset.
Commit To Long-Term Net Zero Goals
The push towards greater carbon management and emission reduction is often better done with clear, measurable targets. Net-zero emissions, while an ambition aim, align your company with general global climate goals and investor expectations.
Setting a year to reach net zero and outlining roadmaps, milestones, and progress-tracking tools makes your commitment credible and actionable. Achieving net-zero requires a comprehensive approach across the whole company encouraging your team to research and integrate multiple strategies.
Pair your long-term goals with transparency in measuring and reporting emissions. Use advanced monitoring tools that provide accurate, real-time data allowing you to track your process against reduction targets.
Gearing Your Company For Carbon Management And Emission Reduction
The oil and gas industry faces a combination of challenges. Meeting global energy demands while reducing its environmental footprint is no small thing. However, companies can navigate this transition successfully with a multifaceted approach outlined in the above strategies.
Leaders who prioritize sustainability can uncover new opportunities for growth and innovation. As regulations around carbon use and emissions are likely to only grow over time, it can also help reduce future risk and future-proof your company to some degree.
The time for oil and gas companies to act is now. The strategies mentioned above offer several paths forward. The industry can become a more sustainable and resilient leader in a greener global energy ecosystem with concentrated effort.
