Transforming the energy system to meets the increasing energy demand of a growing global population – set to reach 10 billion by 2035 – while also lowering global emissions in line with the Paris Agreement goals will require a broad energy mix, and unprecedented collaboration across all sectors and countries.
The oil and gas industry is playing an important role in the energy transition by providing the affordable and reliable energy needed to fuel fair growth and improved living conditions for all, producing this energy with decreasing emissions to support a net-zero world.
It is contributing to a net-zero future in a number of ways:
Reducing greenhouse gas emissions from their operations through energy efficiency, flare reduction and managing methane emissions, as well as increasingly powering their operations with low carbon or renewable energy sources. Many companies are also helping their consumers reduce their emissions through the increased use of natural gas, enhanced efficiencies in engine-fuel systems, and developing low-carbon mobility technologies such as electric vehicles, biofuels, liquefied natural gas, ammonia and hydrogen fuel-cells.
Hydrogen will be a key enabler of the energy transition. Low carbon hydrogen can support hard to abate sectors such as heavy industry and heavy-duty transport, often the drivers of developing economies, to lower their emissions as well as offer large scale, long term back up for renewables. The oil and gas sector has the experience, skills and knowledge to develop and scale up production of hydrogen from natural gas as a low-carbon, low-cost source of energy.
One of the key technologies that can enable large-scale, cost-effective mitigation of CO2 within the industry and across other sectors is carbon capture, utilisation and storage (CCUS). Of the 26 large-scale CCUS projects in operation in 2020, 24 are related to the oil and gas sector. Many of these projects are developed through industry-government collaboration.
With emissions lower than other fossil fuels and a dispatchable energy source, natural gas will be an important element of the energy transition if methane emissions can be controlled across the value chain. The industry is working through many cross-sector initiatives on the scale up of cutting edge technology to support both global and local detection, quantification and resolution of methane emissions.
An increasing number of oil and gas companies are part of the growth in the renewable energy sector and have been increasingly using, investing in and producing energy through renewable technologies in particular wind, solar power and biofuel.
IPIECA members are committed to playing their part in a net-zero future. Over 50% of IPIECA corporate members have publicly committed to achieving net-zero emissions and published plans on how they will reach their goals.