New IEA report highlights the need and means for the oil and gas industry to drastically cut emissions from its operations

The new IEA report highlights how the oil and gas industry can drastically cut emissions from its operations. Oil and gas operations account for nearly 15% of energy-related greenhouse gas emissions and the industry has the ability and resources to cut them quickly and cost-effectively.

A new IEA report released today examines the immediate steps the oil and gas industry needs to take to significantly reduce its emissions footprint and help move the world closer to meeting its international energy and climate goals.

The new report – Emissions from Oil and Gas Operations in Net Zero Transitions – aims to inform discussions in the run-up to the COP28 Climate Change Conference in Dubai in November. It is part of a broader World Energy Outlook special report being released this year examining the role of the oil and gas industry in net zero transitions.

The production, transport, and processing of oil and gas emitted the equivalent of 5.1 billion tonnes of CO2 in 2022. In the IEA’s Net Zero Emissions by 2050 Scenario a concerted effort by all oil and gas companies worldwide to limit the emissions intensity of their operations leads to a 60% cut in these emissions by the end of the decade.

The report identifies five key levers to achieve this reduction, including: tackling methane emissions; eliminating all non-emergency flaring; electrifying upstream facilities with low-emissions electricity; equipping oil and gas processes with carbon capture, utilization, and storage; and expanding the use of low-emissions hydrogen in refineries.

Around USD 600 billion in spending is required this decade to achieve the cut in oil and gas emissions. This is only a fraction of the record windfall income that oil and gas producers accrued in 2022. Many of the measures also generate additional income streams by avoiding the use or waste of gas meaning they can quickly recoup the upfront spending required.

Tackling methane emissions is the most important measure to limit emissions from the industry’s operations. It is also one of the most cost-effective and impactful measures to cut emissions across the economy and limit near-term global warming. Earlier this year, the IEA released the latest update to its Global Methane Tracker, which found that methane emissions remained stubbornly high in 2022 despite the headwinds of the global energy crisis.

Oil and gas companies accounting for just under half of global oil production today have announced plans to reduce emissions from their operations. A far broader coalition – with much more ambitious targets – is needed to achieve meaningful reductions across the oil and gas industry and beyond.