A new report from Guidehouse Insights explores annual emissions reductions from the upstream oil & gas market globally.
Oil and natural gas meet the energy needs of about half the world. However, the resources come at a cost: together they are responsible for about 40% of global greenhouse gas emissions. According to a new report from Guidehouse Insights, annual global spending on upstream decarbonization efforts is expected to grow from about $8.5 billion in 2023 to $44.2 billion in 2032 at a compound annual growth rate (CAGR) of 20.1%.
“The upstream oil and natural gas market, which includes exploration and production activities, has many plausible options for decarbonizing,” says Peter Marrin, senior research analyst with Guidehouse Insights. “Oil and natural gas have been essential to the world’s industries and economy for decades and will remain so in the near and medium term but cleaning up the way the world produces and consumes liquid and gaseous fossil fuels must be prioritized.”
Venting and flaring unwanted gas is not just harmful to the environment, it is wasteful. Laying pipelines to gather the stranded gas is not always economically viable depending on the volume of gas; however, numerous other cost-effective technologies enable harnessing, using, and possibly selling the otherwise stranded gas instead of venting or flaring it.
Energy use is another noteworthy source of emissions from the oil patch, both onshore and offshore. Exploration and production involve drilling more than a mile into the earth, cementing and casing the borehole, completing the well, hydraulic fracturing in the case of shale resources, and the handling of various gasses and fluids on the surface. The process requires a lot of energy, most of which comes from diesel or natural gas. Electrification, especially through renewable electricity, could considerably reduce operational emissions, according to the report.
