Oil & Gas Operations: Is Greener Actually Possible?

Recent analysis from think tank InfluenceMap shows that in 2023, over half of the planet's carbon dioxide emissions came from just 36 fossil fuel producers. Inevitable or avoidable?

On February 28th, Greenpeace Africa submitted a global petition with signatures from 500,000 people asking governments to force oil & gas companies to "stop their climate wrecking activities" and "repair and pay for the damage they have caused." The included letter states that companies should pay damages to "help communities across the world to recover, rebuild and invest in climate solutions."

While saying 'fossil fuel production must stop' is unreasonable given the world's current reliance on it, telling oil & gas companies to step up efforts towards greener operations with lower environmental footprints is entirely realistic—some are already doing it. But the IEA's The Oil and Gas Industry in Net Zero Transitions 2023 report shows that only 1% of investment in clean energy comes from oil & gas companies, and 60% of that comes from only four of them. That is unacceptable if global climate goals are to be reached.

Companies Stepping Up

Although the industry is one of the largest contributors to climate change, and a lot of greenwashing is done to mask that, initiatives and companies actually making fossil fuel production greener and more efficient do exist. Far from greenwashing, these companies are making progress. For example, the Oil and Gas Climate Initiative (OGCI) is comprised of the industry's 12 largest companies and has a target of reducing collective methane intensity at members' operations to under 0.25% by 2025. So far, those companies have cut routine flaring by 53% and reduced collective upstream methane emissions by 55% since 2017.

Big production means big pollution, so it is crucial that the industry's major players take significant steps towards reducing emissions. Morningstar compared these companies in its 2023 Annual Check-Up: Integrated Greenhouse Gas Emissions report and found that Norway's Equinor had the lowest level of portfolio GHG emissions intensity, flaring, and percentage of methane emissions. One way the company has achieved this is by using low-emission power to electrify offshore platforms, like at its Johan Sverdrup field in the North Sea.

Despite Equinor's comparably green rankings, activists argue that the efforts are insufficient given the company's investments in new fossil fuel projects. Henriette Undrum, Equinor's strategy director, responds that, "There has been a mistaken belief that the green transition would be 'simple and inexpensive.' Unfortunately, it's proving to be both costly and challenging."

Unlike the major oil & gas giants, there are a few companies in the industry, albeit very few, that work to make production greener on a daily basis. Export Petroleum (XP Group) is an upstream oil and gas operating company whose mission is "to increase the fields' efficiency and reduce their environmental footprint to make them more sustainable." Two years ago, the company also launched XP Upgreen, focusing solely on helping companies decarbonize operations and reduce CO2 and methane emissions. They have already made significant improvements at oil & gas operations in Romania and Ukraine and were recently asked by a delegation from Turkmenistan to help the country "increase the efficiency and environmental sustainability of production processes" at its operations.

Bart Wauterickx, XP Upgreen's Managing Director, explains that "Real progress requires being on the ground—measuring direct and indirect emissions, throughout the whole value chain from upstream to downstream activities—to identify the greatest opportunities and implement effective reduction strategies... We are actively addressing both intended emissions like flaring, combustion emissions and venting, and unintended emissions coming from leaking components."

Wauterickx also argues that strict environmental frameworks (like in Europe) are necessary for sustainable development and points to the severe soil contamination and air pollution in Nigeria as a warning against lax regulations. Nigeria is finally trying to turn this situation around with the help of First E&P, a company founded to address the country's problems with the mission of "... contributing to the well-being of Nigerians... we are proud to be at the forefront of innovation and sustainability in the energy sector."

First E&P recently helped The Nigerian National Petroleum Company (NNPC) reduce routine gas flaring by 96% at the Anyala field in OML 83 and the Madu field in OML 85. Ademola Adeyemi-Bero, CEO of First E&P, says, "This milestone reflects our unwavering commitment to environmental sustainability and responsible energy production. By substantially reducing our carbon footprint, we are contributing to a sustainable energy future that benefits both the environment and the communities we serve." The reduced gas flaring was a positive step, but there is a lot more to be done in Nigeria if First E&P is to live up to this bold statement.

Making a Necessary Evil More Palatable

Producing oil and gas pollutes our planet, but for the foreseeable future, fossil fuels are not going away. This UNECE report argues that, "Oil and gas will play a key role in the future sustainable energy system even under a scenario that meets stringent climate objectives—the sector will continue to support economic growth and social progress as alternatives to oil and gas will take time to emerge and achieve global scale."

The report also says that about 50% of the oil & gas sector's methane emissions could be eliminated at no net cost. Furthermore, a report from the World Bank's Global Gas Flaring Tracker says that eliminating flaring would cut about 381 million tons of released carbon dioxide emissions.

Some companies are already making genuine advances in reducing methane and carbon dioxide emissions, and a few, like XP Upgreen and First E&P, make environmental protection a priority. But the rest of the industry needs to follow suit and implement effective, sustainable measures if there is any hope for the world climate objectives to be met.

Because, as Fatih Birol, Executive Director of the IEA, argues, "The fossil fuel sector must make tough decisions now, and their choices will have consequences for decades to come. Clean energy progress will continue with or without oil and gas producers. However, the journey to net zero emissions will be more costly and harder to navigate, if the sector is not on board."