The pace of the energy transition is accelerating
Pressure is growing on the oil and gas industry to demonstrate it can continue to deliver a secure and environmentally-sustainable supply of affordable energy.
From subsea to shore, and from shore to street, the sector is increasing its efforts to play a key role in decarbonizing the world’s energy system, and helping to achieve international and national targets for climate change mitigation. The production of oil and gas accounts for a relatively small proportion of greenhouse gas emissions along the value chain.1 It is during the consumption of oil and gas products where most emissions occur.
Upstream, more effort is now being directed towards gas developments than oil. This lower-carbon shift is also evident in the midstream and downstream. New sources of gas (e.g. biogas, hydrogen and synthetic methane) are being introduced to domestic and commercial energy systems, helping to decarbonize gas consumption. These gases are being used in transport as lower-carbon fuels for shipping, rail, and for heavy and light road vehicles.
Refining and petrochemicals face the challenge of reacting to changes in feedstocks. These are due to the increasing use of heavier crudes from countries such as Iran and Venezuela, and new product slates to meet changing environmental standards. Examples here include International Maritime Organization limits on sulphur in fuel in international shipping from 2020.
As a growing number of countries begin to consider net-zero carbon emissions targets, the case is growing for carbon capture and storage (CCS) although the current pace of implementation is very slow.
1For example, Oil & Gas UK’s Environment Report 2019 states that oil and gas exploration and production accounts for 3% of the UK’s greenhouse gas emissions, although this percentage may vary by country.