Gas Still The Big Hope For Achieving Net-Zero

Gas Still The Big Hope For Achieving Net-Zero
The energy sector accounts for nearly 80 percent of GHG emissions, primarily from fossil fuel consumption.

The energy sector accounts for nearly 80% of GHG emissions, primarily from fossil fuel consumption. Oil and gas companies are under increasing pressure to disclose the climate impact of their business and decarbonize operations.

Natural gas has long been considered to have an important part to play in realizing a 1.5-degree scenario by 2050. And its role is under greater scrutiny than ever. The ripple effect from Russia’s war with Ukraine may have knocked the balance of the energy trilemma – sustainability, affordability, and security – towards the latter, but the net zero challenge will only intensify.

As efforts to address global warming step up, lower fossil fuel use will reduce energy sector emissions. Wood Mackenzie expects carbon dioxide emissions to peak around 2025 and reduce by 28% from the current level by 2050.

However, Woodmac calculates that to meet the most ambitious targets of the Paris Agreement – as outlined in its Accelerated Energy Transition 1.5-degree (AET-1.5) scenario – carbon emissions would need to drop much further. By 70%, in fact.

It’s unlikely that additional reductions in fossil fuel demand will be enough to address this shortfall on their own. With that in mind, reducing emissions within the oil and gas industry itself will be an important part of reducing overall emissions.

To best address the sector’s emissions, it is necessary to understand where and how they are created across the whole value chain. Namely, scope 1 are direct emissions relating to oil and gas extraction and processing, including emissions from fuel combustion, flaring and venting, as well as methane losses. Scope 2 are indirect emissions relating to oil and gas extraction, from purchased electricity, heat and steam consumed at facilities while scope 3 are other indirect sources of emissions, including combustion of products at point of use.

Analyzing the data by field type, Woodmac claims that in many cases gas fields can have higher Scope 1 and 2 emissions than oil fields. This often happens where there is CO2 in the reservoir, which is subsequently vented into the air, or where the gas is liquefied prior to shipping.

The additional liquefaction, shipping, and regas process involved makes LNG more carbon intensive than traditional pipeline gas supply. Wood Mackenzie’s analysis has LNG meeting at least 25% of global gas demand by 2050.

However, given the increasing reliance on LNG in Europe to replace piped gas from Russia, that figure could go even higher. So, unless LNG facilities take steps to decarbonize then overall scope 1 and 2 emissions from gas production could continue to increase.

It is worth noting that most carbon dioxide emissions come from gas or oil products being combusted by the end user, such as in a power station or for transportation. Scope 3 has a huge impact on overall emissions, being an order of magnitude higher than Scope 1 and 2 emissions combined.

Oil and gas companies have much less control over these emissions, and so far, only ten have set Scope 3 net-zero ambitions. But once Scope 3 is considered, gas is noticeably cleaner than oil – mainly because gas has a lower carbon combustion factor than liquid fuels.

Furthermore, oil must be refined before it can be used, which increases Scope 3 emissions even further for oilfields.

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