All Reports
4Q 2023

Decarbonization in the Upstream Oil & Gas Market

Emissions Reduction and Spending Forecasts, 2023-2032

The upstream oil and natural gas market, which includes exploration and production activities, has many plausible options for decarbonizing. When associated natural gas is extracted in the pursuit of oil, but the field operator lacks the infrastructure to gather and market the methane, the gas is instead vented directly into the atmosphere. Since methane is a considerably more potent greenhouse gas than CO2, the methane is usually set on fire (flared) to release the CO2, instead of direct methane, into the atmosphere. Venting and flaring unwanted gas is not just harmful to the environment, it is wasteful. Laying pipelines to gather the stranded gas is not always economically viable depending on the volume of gas; however, numerous other cost-effective technologies enable harnessing, using, and possibly selling the otherwise stranded gas instead of venting or flaring it.

Energy use is another noteworthy source of emissions from the oil patch, both onshore and offshore. Exploration and production involve drilling more than a mile into the earth, cementing and casing the borehole, completing the well, hydraulic fracturing in the case of shale resources, and the handling of various gasses and fluids on the surface. The process requires a lot of energy, most of which comes from diesel or natural gas. Electrification, especially through renewable electricity, could considerably reduce operational emissions.

This Guidehouse Insights report forecasts annual emissions reductions from the upstream oil & gas market based on the source of the emissions. It also provides forecasts for the annual CAPEX needed, based on the decarbonization approach, between 2023 and 2032.

Pages 36
Tables | Charts | Figures 30
  • What can oil & gas producers do to reduce their greenhouse gas emissions?
  • Which decarbonization options will have the biggest impact on reducing emissions?
  • Which decarbonization options will draw the most capital investment through 2032?
  • Which countries, regions, and companies are the earliest movers on decarbonization in the upstream oil & gas market?
  • What more can be done to incentivize decarbonization by upstream oil & gas players?
  • Oil & gas producers
  • Oilfield equipment and service providers
  • Methane detection
  • Manufacturers of electric-power drilling equipment
  • Renewable project developers
  • Policymakers
  • Oil & gas investors

1. Executive Summary

1.1      Introduction

1.2      Market Forecast

2. Market Issues

2.1      Drivers

2.1.1     Public and Investor Sentiment

2.1.2     Government Policy

2.1.3     Technology Advances

2.1.4     De-risking Assets

2.2      Barriers

2.2.1     Opposition to All Fossil Fuel Activity

2.2.2     Inadequate Equipment or Infrastructure

2.2.3     Energy Requirements

2.2.4     High Costs with Iffy Returns

2.3      Pricing

3. Industry Value Chain

3.1      Decarbonization Strategies

3.1.1     Mitigating Methane Emissions

3.1.2     Eliminating Nonemergency Flaring

3.1.3     Electrification

3.1.4     Other Efforts

3.2      Competitive Landscape

3.2.1     NOCs

3.2.2     Supermajors

3.2.3     Independent Producers

3.2.4     Oilfield Service Companies

3.2.5     Merger &Acquisition Activities

4. Market Forecasts

4.1      Methodology

4.2      Global Market Overview

4.2.1     North America

4.2.2     Europe

4.2.3     Asia Pacific

4.2.4     Latin America

4.2.5     Middle East & Africa

5. Conclusions and Recommendations

5.1      Three Big Takeaways

5.2      Recommendations

5.2.1     O&G Companies Must Think Differently and Prepare for Change

5.2.2     Lawmakers Must Aid O&G Companies’ Decarbonization Efforts

5.2.3     O&G Companies Should Monitor New Technologies and Startups

5.2.4     Explore Near-, Medium-, and Long-term Partnerships

6. Acronym and Abbreviation List

7. Table of Contents

8. Table of Charts and Figures

9. Scope of Study, Sources and Methodology, Notes

  • Annual Crude Oil Demand, World Markets: 2019-2028
  • Annual Decarbonization Spending in the Upstream O&G Sector by Region, World Markets: 2023-2032
  • Annual Decarbonization Spending in the Upstream O&G Sector by Approach, North America: 2023-2032
  • Annual Upstream O&G Emissions by Source, North America: 2023-2032
  • Annual Decarbonization Spending in the Upstream Oil and Gas Sector by Approach, Europe: 2023-2032
  • Annual Upstream O&G Emissions by Source, Europe: 2023-2032
  • Annual Upstream O&G Emissions by Source, Asia Pacific: 2023-2032
  • Annual Decarbonization Spending in the Upstream O&G Sector by Approach, Latin America: 2023-2032
  • Annual Decarbonization Spending in the Upstream O&G Sector by Approach, Middle East & Africa: 2023-2032
  • Annual Upstream O&G Emissions by Region, World Markets: 2023-2032
  • Annual Upstream O&G Emissions by Source, World Markets: 2023-2032
  • Annual Decarbonization Spending in the Upstream O&G Sector by Approach, World Markets: 2023-2032
  • Annual Decarbonization Spending in the Upstream O&G Sector by Approach, Asia Pacific: 2023-2032
  • Annual Upstream O&G Emissions by Source, Latin America: 2023-2032
  • Annual Upstream O&G Emissions by Source, Middle East & Africa: 2023-2032
  • Pictorial Representation of the O&G Industry Value Chain
  • Annual Upstream O&G Emissions by Region, World Markets: 2023-2032
  • Annual Upstream O&G Emissions by Source, World Markets: 2023-2032
  • Annual Decarbonization Spending in the Upstream O&G Sector by Region, World Markets: 2023-2032
  • Annual Decarbonization Spending in the Upstream O&G Sector by Approach, World Markets: 2023-2032
  • Annual Upstream O&G Emissions by Source, North America: 2023-2032
  • Annual Decarbonization Spending in the Upstream O&G Sector by Approach, North America: 2023-2032
  • Annual Upstream O&G Emissions by Source, Europe: 2023-2032
  • Annual Decarbonization Spending in the Upstream O&G Sector by Approach, Europe: 2023-2032
  • Annual Upstream O&G Emissions by Source, Asia Pacific: 2023-2032
  • Annual Decarbonization Spending in the Upstream O&G Sector by Approach, Asia Pacific: 2023-2032
  • Annual Upstream O&G Emissions by Source, Latin America: 2023-2032
  • Annual Decarbonization Spending in the Upstream O&G Sector by Approach, Latin America: 2023-2032
  • Annual Upstream O&G Emissions by Source, Middle East & Africa: 2023-2032
  • Annual Decarbonization Spending in the Upstream O&G Sector by Approach, Middle East & Africa: 2023-2032
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