Oil and gas sector emissions worldwide - statistics & facts
Every year, the oil and gas industry is responsible for releasing more than five billion metric tons of carbon dioxide equivalent into the atmosphere. If the industry was a country, it would be the world’s third-largest emitter, behind only China and the U.S. Nine out of the 10 most polluting assets in the world are oil and gas fields, and seven of the biggest emitters in history, including Chevron, Saudi Aramco, and BP, all operate within the sector. Now, amid growing climate concerns, the oil and gas industry must take on the challenge of meeting the increased need for energy while simultaneously reducing its emissions.
With the vast resources at its disposal, the oil and gas industry is well placed to play a key role in scaling up net zero transition technologies and giving the world a chance at meeting its climate goals. But with the capital expenditure of oil super majors still leaning heavily towards oil and gas projects compared to renewables, changes within the industry will need to accelerate if it is to reduce its massive contributions to anthropogenic emissions and help usher in a low-carbon future.
Sources of oil and gas industry emissions
Emissions from the production, transportation, and processing of oil and gas stem from a variety of activities. In 2022, refining accounted for 35 percent of scope 1 and scope 2 oil emissions, while flaring and energy use each contributed a share of 14 percent. Meanwhile, almost two-thirds of emissions from natural gas operations were associated with upstream and downstream methane. In total, methane – which has a far greater global warming potential than CO₂ - accounted for almost half of all oil and gas operations emissions in 2022. The oil and gas industry is one of the largest sources of methane emissions, releasing some 80 million tons of this potent GHG each year.Value chain emissions
While scope 1 and 2 oil and gas emissions account for around 10 percent of human-made GHG emissions, the industry’s carbon footprint is far greater when scope 3 emissions are taken into account. Scope 3 emissions refer to all indirect emissions across a company’s value chain, such as the processing and use of sold products, and represent around 90 percent of total oil and gas sector emissions. Despite accounting for the majority of the sectors’ emissions, only a small share of oil and gas companies report their scope 3 emissions, owing to factors such as the difficulty in measuring and tracking emissions.Reducing emissions within the oil and gas sector
In addition to an overall global reduction in oil and gas consumption and ending new oil and gas projects, there are a range of actions the sector can take to reduce emissions. These include, but are not limited to, diversifying into renewables and other low-carbon resources, reducing flaring, better monitoring of methane emissions, expanding the use of low-carbon hydrogen in refineries, and further investing in carbon capture and storage (CCS) technology, of which the oil and gas industry is already heavily involved in. Upstream electrification could also considerably cut oil and gas production emissions. In Norway, for example, emissions from fully electrified oil-producing rigs across the Norwegian Continental Shelf are almost 90 percent less than those from the same assets before electrification.With the vast resources at its disposal, the oil and gas industry is well placed to play a key role in scaling up net zero transition technologies and giving the world a chance at meeting its climate goals. But with the capital expenditure of oil super majors still leaning heavily towards oil and gas projects compared to renewables, changes within the industry will need to accelerate if it is to reduce its massive contributions to anthropogenic emissions and help usher in a low-carbon future.
