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.
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