Taking steps like improving process efficiency, monitoring and capturing methane venting, reducing flaring and electrifying equipment would go a long way in reducing emissions, according to the McKinsey report. (Source: Shutterstock)
Upstream oil and gas companies are capable of delivering a global “meaningful decline” in greenhouse gas (GHG) emissions by 2030, a McKinsey & Co. analysis shows.
Upstream oil and gas operations account for about 7% of total GHG emissions, which have averaged more than 50 gigatons per year over the past decade.
“O&G emission reduction could offer some of the lowest-effort, highest-impact GHG mitigation available anywhere,” McKinsey said in its report. “Targeted cooperation of upstream O&G players on methane and flaring reduction could reduce the world’s greenhouse gas emissions by 4% by 2030.”
McKinsey estimated it would take $200 billion in investments to reduce emissions by 2 gigatons of CO2 equivalent per year. $120 billion of that would go towards infrastructure for recovering and transporting methane. The Middle East, Africa and Latin America show the largest abatement potential.
More than 50 companies representing as much as half of global oil output have committed to the goals of the Global Methane Pledge (GMP) and the Oil & Gas Decarbonization Charter, McKinsey said. The GMP aims to reduce methane emissions by 30% from 2020 levels by 2030. The OGDC “aims to continue motivating oil and gas companies to decarbonize.”
Direct releases of methane accounted for more than half of the emissions from upstream oil and gas in 2022, McKinsey said.
Companies can abate 80% to 90% of today’s total upstream emissions with existing technology, McKinsey said.
Taking steps like improving process efficiency, monitoring and capturing methane venting, reducing flaring and electrifying equipment would go a long way in reducing emissions.
Recommended Reading
Dallas Fed: Trump Can Cut Red Tape, but Raising Prices Trickier
2025-01-02 - U.S. oil and gas executives expect fewer regulatory headaches under Trump but some see oil prices sliding, according to the fourth-quarter Dallas Fed Energy Survey.
Uncertainty Abounds: IRA Clean Energy Incentives Await Fate
2025-01-02 - Policy experts weigh in on the next possible steps for President Joe Biden’s signature climate law, the Inflation Reduction Act, following the Trump-led Republican trifecta.
Pembina Closes $290MM Deal for Stake in Whitecap’s NatGas Facility
2025-01-02 - Pembina Gas Infrastructure closed a CA$420 million transaction to acquire interests in Whitecap Resources’ natural gas processing facility in Alberta, Canada.
Equinor’s Norwegian LNG Plant Likely Shuttered for a Week
2025-01-02 - An outage at Equinor’s Arctic facility, Hammerfest LNG, will temporarily close Europe’s largest LNG export facility.
One Equity Partners Completes Acquisition of EthosEnergy
2025-01-02 - Private equity firm One Equity Partners said it purchased EthosEnergy to meet the growing maintenance needs of the gas power market.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.