In a previous blog post, we discussed the difficulties of reducing greenhouse gas (GHG) emissions in the chemical industry. Similar challenges also exist in the oil and gas industry, particularly in the upstream sector, which is known for being one of the most difficult sectors to reduce GHG emissions. According to the International Energy Agency (IEA), oil and gas companies are currently responsible for approximately 15% of GHG emissions in the energy sector, which amounts to ~5 gigatonnes (Gt) of CO2 equivalent from their operations alone. The upstream segment is particularly challenging to decarbonize and is the most carbon-intensive part of the oil and gas industry compared to the downstream, accounting for more than half of the total emissions from oil and gas operations as noted by the IEA.
The sources of upstream GHG emissions come from various stages of the production process, including exploration, drilling, completions, and with a significant share from production, venting, flaring, and fugitive emissions (see Exhibit 1). While exploration and drilling activities contribute minimally to total upstream GHG emissions, emissions from production, venting and flaring, and fugitive emissions are the major contributors. Emissions from engines, compressors, and machinery during production account for 20% to 25% of total emissions. Venting and flaring, which involve the combustion or release of associated gas, constitute a significant portion, contributing between 16% to 40% of total GHG emissions. Meanwhile, fugitive emissions, resulting from equipment leaks and unintended releases, dominate the share of GHG emissions, representing 12% to 36% of total emissions in the upstream sector.
The rest of this article is available to ADI Plus subscribers.
Log in or subscribe to unlock ADI Plus content >>
Have questions? We're happy to help.
About ADI Analytics
ADI is a prestigious, boutique consulting firm specializing in oil and gas, energy transition, and chemicals since 2009. We bring deep expertise in a broad range of markets where we support Fortune 500, mid-sized and early-stage companies, and investors with consulting services, research reports, and data and analytics, with the goal of delivering actionable outcomes to help our clients achieve tangible results.
We also host the ADI Forum that brings c-suite executives together for meaningful dialogue and strategic insights across the oil & gas, energy transition, and chemicals value chains. Learn more about the ADI Forum.
Subscribe to our newsletter or contact us to learn more.
