The Oil & Gas Industry in a Net Zero World

In a nutshell, net zero refers to cutting greenhouse gas emissions to mitigate climate change and stabilize global temperatures. The goal of net zero is to reduce emissions by 45% by 2030 and reach net zero by 2050.

Meeting net zero is a global effort: countries, industries, and other institutions are turning commitments into action to make this goal possible. We are geared toward a net zero world, with the Paris Agreement pushing international sustainability goals into motion.

The energy sector, especially oil and gas, is a central force in the global push toward net zero. Accounting for an estimated three-quarters of greenhouse gas emissions, this industry holds the potential to drive transformative change in the fight against climate change.

The world depends on the oil and gas industry for its energy needs, a heavy dependency that is set to grow as industrialization and population continue to rise alongside rapid technological innovation.

Currently, traditional energy sources such as crude oil, natural gas, and coal supply approximately 80% of global energy consumption.  While these energy sources make modern innovations a reality, the methods used by the oil and gas sector to produce this energy significantly contribute to environmental degradation and the global carbon footprint.

The oil and gas industry alone accounts for 5.1 billion tonnes of greenhouse gas emissions globally. As greenhouse gas emissions increase due to energy demand, so do their effects on the environment and our overall quality of life, such as:

• Increased global surface temperature, resulting in inclement weather patterns and rising sea levels.
• Loss of biodiversity, resulting in increased numbers of endangered species.
• Increased health risks and forced displacement are leaving many countries vulnerable to poverty.

With these effects fueling the drive to reach net zero, the oil and gas industry is making significant efforts to reduce the industry’s emissions. Some of these strategies include the following:

Approximately 40% of emissions from the oil and gas sector could be eliminated at no net cost by using existing technologies.

Efforts to reduce methane emissions in oil and gas operations are already in progress across several countries. Not only are they industry standard, but these strategies are cost-effective and increase overall production efficiency.

Examples of employed strategies to cut methane emissions include:

• Prioritizing leak detection, flare monitoring, and repair campaigns
• Installing emission control devices to refine the production process
• Replacing components with low-emission alternatives

Technological innovations are essential in optimizing oil and gas production while responsibly reducing methane emissions. Automation solutions, such as the methane monitoring solution developed by Machfu, a subsidiary of Safe and Green Holdings (NASDAQ: SGBX), enable continuous monitoring and provide actionable insights into methane leaks of all sizes.

Carbon capture, utilization, and storage (CCUS) technologies involve capturing carbon dioxide in power generation or industrial facilities, then compressing or transporting it via pipeline for various applications. It can also involve injecting the captured CO₂ into deep geological formations or reservoirs.

This technology can be integrated into existing oil and gas operations to aid decarbonization. In recent years, according to the International Energy Agency, over 700 projects using CCUS technology are underway. In 2023 alone, announced CO₂ capture capacity for 2030 rose by 35%, bringing potential capture by 2030 to approximately 435 million tonnes per year.

Angkor Resources Corp. (TSXV: ANK | OTCQB: ANKOF), a Canadian junior mining exploration company, is pursuing energy opportunities via its subsidiary EnerCam, which has carbon capture projects that support clean energy solutions.

According to a recent report, renewable energy-related deals in the oil and gas industry increased by 130% in Q2 2024 compared to Q2 2023.

Incorporating solar, wind, and hydroelectric power can further reduce emissions within the sector and, at the same time, diversify energy portfolios.

Hydrogen is another clean energy source that can be readily integrated into oil and gas operations. Commercial hydrogen producers and petroleum refineries typically use steam methane reforming (SMR) to extract hydrogen from methane, commonly sourced from natural gas.

Investing in renewable energy is a growing trend within the oil and gas industry. While identifying companies aligned with this shift can be challenging, InvestorTV helps bridge that gap by connecting investors and delivering key insights to support investment decisions in various industries, including the commodity market.

The long-term sustainability of the oil and gas sector will depend on its ability to meet net zero targets. Technological advancements and continuous innovation will be critical in driving progress toward reducing carbon emissions.

Key strategies, including low-emission practices and renewable energy investments, will play a vital role in the oil and gas industry’s trajectory towards net zero.

Ultimately, the industry’s future will be shaped by its capacity to adapt and innovate in response to evolving environmental and market demands.