The Pathways

Moving Forward: Oil and Gas Climate Solutions

TACKLING THE PLANET’S climate problems in a credible way will require a novel mix of demand-side and supply-side solutions, an adaptive approach that even some of the world’s most ardent, well-intentioned proponents of climate mitigation efforts do not seem to fully grasp. The Obama White House hosted a climate summit in the fall of 2015 after eighty-one major companies signed on to the American Business Act on Climate Pledge in support of that year’s United Nations (UN) Climate Change Conference in Paris.¹ I spoke on an industry panel alongside representatives from Walmart, Procter and Gamble, and Alcoa. The other panelists offered up their solutions, which ranged from using suppliers with lower greenhouse gas (GHG) emissions to cutting operational carbon intensity through material and process innovations.

I reported on the core findings of the Oil Climate Index + Gas (OCI+) and how the petroleum sector could mitigate climate change, pointing out that heterogeneous oil and gas resources have wide-ranging climate footprints and that these differences are large enough to matter. If we shift our mindset to assume that oil and gas are here to stay, we can actually minimize their supply-side emissions now instead of imagining that they will go away.

The panelist next to me whispered, “I had no idea.” Surprisingly, some of the most savvy people in government, civil society, and industry have expressed similar sentiments. This reaction keeps coming up in seminars with faculty and students, academic collaborators, government scientists, public agency analysts, legislative staff, policy analysts at global nongovernmental organizations (NGOs), foreign officials, security experts, foundation officers, think tank experts, and countless journalists. Even petroleum company representatives are taken aback by the large variances in the GHG emissions of various types of oil and gas and what this means for climate change.

But not knowing is no excuse for inaction—not when it comes to climate change or any other existential threat. The first step to heightening transparency about the climate impacts of oil and gas involves getting the OCI+’s insights about climate change and GHG emissions into stakeholders’ hands. That is the reason I wrote this book.

While it is essential, knowledge alone will not reliably shrink the climate footprints of oil and gas. In reality, there is no single strategy that any one actor can execute to turn the planet’s climate around. Instead, like the vexing arcade game whack-a-mole, blocking the oil and gas supply chain in one place with one tool can cause hydrocarbons to re-emerge elsewhere rather than disappear altogether. Such tactics do not result in the net reductions the planet needs: they just lead to shell games in which companies pawn off emissions on each other while overall GHG levels continue to rise. For example, the historic breakup of Standard Oil in 1911 (a piecemeal approach) did not prevent oil and gas—with its attendant climate impacts—from resurfacing elsewhere. This event merely converted the industry into its present, more convoluted and intractable structure.

Successfully solving the oil and gas sector’s climate problem requires a surgical approach, one that makes near-term improvements while formulating a long-term vision. In this final chapter, I summarize four guiding principles for twenty-first-century oil and gas systems. I then lay out pathways for reducing the supply-side climate footprints of oil and gas. These small-scale, incremental 2 percent solutions involve modest reforms that add up over time as we strive to make complex oil and gas systems more environmentally sound. The book concludes by envisioning a twenty-first-century end game for decarbonizing this critical economic sector.

Guiding Principles on Climate Change for the Twenty-First Century

If the petroleum sector vanished today and rematerialized in 2030 in a dangerously warmer world, what would the oil and gas industry look like and what environmental, social, and governance (ESG) directives would it operate by? The four following guiding principles are meant to help answer this question. All climate mitigation solutions should check one or more of these boxes.

Principle #1: The Public Has a Right to Know

Most ordinary citizens are unaware that no two oils or gases are the same in terms of their GHG emissions. Some otherwise-equivalent barrels of these resources can emit three times more total lifecycle GHG emissions than others, as discussed in chapters 3 and 4. There can be as much as a tenfold difference between the lowest and highest levels of supply-side GHG emissions generated by the production, processing, refining, and shipping of a given barrel of oil or cubic foot of gas depending on its type. Regardless, officials assign an average GHG emission factor of 432 kilograms of carbon dioxide (CO₂) to a barrel of oil, while a barrel of oil equivalent (BOE) of natural gas is reported to emit 308 kilograms of CO₂.²

Markets cannot function efficiently when such different types of oil or gas are essentially treated the same or when their highly variable GHG emissions are hidden. Opaque, incomplete, and missing information leads to excessive emissions and squandered opportunities to reduce GHGs. Greater data transparency on oil and gas is needed to inform the decision-making necessary to reduce climate risks for consumers, homeowners, workers, manufacturers, investors, insurers, and other members of society.

Principle #2: Prices Should Reflect True Societal Costs

Climate change will continue to impose damage and costs on societies and ecosystems around the world, with a price tag that many economists believe is currently underestimated.³ While oil and gas emit the majority of global GHGs, these emissions are not reflected in their prices. Plans put forth to date to price carbon fail to reflect the full scope of the petroleum sector’s true societal costs.⁴ As such, these artificially low costs do not take into account all GHGs like black carbon, do not accurately reflect the added warming caused by short-lived climate pollutants like methane, and do not fully tally lifecycle emissions throughout the oil and gas sector.⁵ The economic cost caused by an additional ton of both short- and long-term climate pollutants being released into the atmosphere converts into a variable cost per barrel, depending on which oil or gas is used.⁶ Beyond petroleum-based fuels, every petroleum product including plastics and other petrochemicals must be priced to account for the GHGs emitted from cradle to grave.

Principle #3: Industry Must Be Responsible for All Supply-Side GHGs

It is difficult to track the GHGs from the multitude of industry actors connected through complex, convoluted, and changing corporate structures and joint venture business arrangements. Studies reveal that there are no independent sources of data on oil and gas emissions, and all government datasets rely primarily on self-reported statistics.⁷ Pollutants and byproducts are routinely leaked and not fully accounted for, including methane, black carbon, CO₂, volatile organic compounds, petcoke, and single-use plastics.⁸ Leakages occur when infrastructure does not function properly or when operators wantonly dispose of unwanted byproducts.⁹ Holding producers, oil refiners, gas plant operators, shippers, traders, and all other industry actors responsible for all supply-side GHG emissions can help improve operations, system designs, government oversight, and public safety.

Principle #4: Policymakers Should Place Supply-Side Oil and Gas on a Safe Climate Path

Oil and gas emissions need to be reduced to keep the earth’s temperature from rising beyond a ceiling of 1.5 to 2 degrees Celsius above preindustrial levels. The Intergovernmental Panel on Climate Change (IPCC) traces various pathways for keeping emissions in check.¹⁰ The most aggressive scenario envisioned to date calls for dramatically lowering oil and gas demand by 87 percent and 74 percent, respectively, by 2050—excising roughly four out of five barrels of petroleum from the economy.¹¹

This is unrealistic. Demand-side policies and voluntary supply-side measures will not be enough. Industry and civil society can take voluntary actions like aligning future business plans with the principles enshrined in the Paris Agreement. But the onus for decarbonizing oil and gas systems falls on the shoulders of governments, especially in the case of hydrocarbon assets with the highest GHG emissions. A climate path well below 2 degrees Celsius cannot simply proceed with business as usual, using twentieth-century petroleum supplies. Public-private-nonprofit collaborations can advance monitoring, research and development (R&D) and the commercialization of GHG-intensive industry operations and petroleum product substitutes. Government incentives can also help the public and industrial consumers use low-GHG petroleum products.

Pursuing New Pathways

The progression from simpler to more complex oil and gas supply chains over the past century necessitates greater transparency, smarter decision-making, and stricter policy guidance. Demand-side actions such as urging consumers to drive less and use carbon-free fuels will no doubt be necessary, but these measures will not provide sufficient climate protection by midcentury. Consequently, supply-side oil and gas climate strategies must feature prominently in any realistic plans to reduce near-term GHG emissions in line with the Paris Agreement.

Five main mitigation tools are available to governments, industry, and civil society actors. These include (1) publicly monitoring, reporting, and verifying lifecycle GHG emissions; (2) formulating voluntary agreements and binding regulations; (3) enacting sanctions and prohibitions; (4) conducting R&D and pursuing technology transfer; and (5) offering financial incentives and disincentives. Table 8.1 presents dozens of potential mitigation policies that private, public, and NGO actors can employ to harness each of these tools. Using the OCI+, actors can input particular oil and gas data to determine which strategy has the best chance of excising the most GHGs. Such analyses are a prudent way to factor climate impacts into supply-side decision-making in the oil and gas sector.

Table 8.1 Sample Oil and Gas Supply-Side GHG Mitigation Strategies

GHG Mitigation Tools	Government	Industry	Civil Society
Public Monitoring, Reporting, and Verifying (MRV) Lifecycle GHGs	Collect open-source oil and gas data; mandate auditable company GHG reports; update GHG inventories; expand and integrate remote sensing and expedite public reporting	Submit and update corporate climate plans; create a new reporting framework for oil and gas supply-side GHGs	Demand near real-time MRV for oil and gas GHGs; establish low-GHG certification for oil and gas; tap the expertise of retirees from industry and government
Voluntary Agreements and Binding Regulations	Update oil and gas GHGs in NDCs; tightly regulate methane; coregulate GHGs and air pollutants	Decommission targeted oil and gas assets; commit to zero routine gas flaring, fugitives, and venting	Advocate for Know Your Oil regulations; incorporate supply-side oil and gas emissions in updated NDCs
Financial Incentives and Disincentives	Price oil and gas sector lifecycle GHGs; establish a methane feebate on the oil and gas industry	Incentivize top-down corporate climate mitigation; stop financing high-GHG projects	Promote incentives to safely decommission and redevelop oil and gas properties
Sanctions and Prohibitions	Ban residual fuels and waste byproducts; prohibit operations in fragile ecosystems	Apply future production quotas to high-intensity GHG oil and gas assets	Tailor divestment decisions to lifecycle GHG emissions; push endowments to adopt GHG investment criteria
R&D and Technology Transfer	Update GWPs; facilitate clean energy tech transfer; promote R&D for nonenergy petroleum products; research climate engineering impacts	Integrate renewables into oil and gas systems; accelerate research on net-zero emission technologies (NETs)	Conduct R&D on refining for a clean energy transition; facilitate tech transfer of open-source GHG tools and remote detection systems

GHG, greenhouse gas; NDCs, nationally determined contributions; R&D, research and development.

Source: Author’s assumptions.

These pathways are not mutually exclusive. In fact, strategies can—and should—be mutually reinforcing. For example, greater data transparency through more robust oversight can inform focused standards, smarter incentives, and critical R&D that leads to successful technology transfer.

The Sum of 2 Percent Solutions

A comprehensive fix to the problem of climate change would be ideal if such an option were viable. Unfortunately, such a silver bullet does not exist—one rarely does. Even though no single approach will quickly turn the titanic oil and gas industry around, there are numerous elegant approaches for tackling the tough climate challenges imposed by supply-side oil and gas GHG emissions. Such small cuts can add up to sizable results—what I refer to as the sum of 2 percent solutions.

The sections that follow detail what policymakers, industry, and civil society can do. The more these actors coordinate, the more impactful the outcome will be.

What Policymakers Can Do

Government actors are discussed first because there is no substitute for policy action to motivate the wholesale changes required to decarbonize supply-side oil and gas enterprises. Most industry actors will not invest in near-term climate mitigation without government leadership (or the real threat of leadership fueled by civil society actors). There are dozens of government policies that merit consideration. Table 8.2 identifies which of the four guiding principles apply to fifteen promising government-led strategies.

Table 8.2 Government Strategies to Reduce Supply-Side GHG Emissions*

Government Supply-Side GHG Strategies	Principle #1: The Public Has a Right to Know	Principle #2: Prices Reflect Social Costs	Principle #3: Hold Industry Responsible	Principle #4: Position Sector on Safe Climate Path
Mandate auditable company GHG reports	x		x	x
Update GHG inventories	x		x	x
Ban residual fuels and waste byproducts		x	x	x
Collect open-source oil and gas data	x		x
Expand and integrate remote sensing and expedite public reporting	x		x
Update supply-side projections of oil and gas GHGs in countries’ NDCs	x			x
Tightly regulate methane			x	x
Coregulate GHGs and air pollutants	x	x
Price oil and gas sector lifecycle GHGs		x		x
Establish a methane feebate on the oil and gas industry		x	x
Prohibit operations in fragile ecosystems	x			x
Update GWPs		x		x
Facilitate clean energy tech transfer			x	x
Accelerate R&D for nonenergy petroleum products			x	x
Research climate engineering impacts	x			x

Source: Author’s assumptions.

GHG, greenhouse gas; NDCs, nationally determined contributions; R&D, research and development.

Note: These strategies are not ranked in a particular order since the majority advance two guiding principles.

Mandate Auditable Oil and Gas Company GHG Reports

Climate change is increasingly viewed as an existential financial risk for firms that requires closer tracking. Producing auditable reports that detail oil and gas companies’ respective climate risks and decarbonization plans could help reduce the most significant accounting errors. Similar to how the Securities and Exchange Commission (SEC) traces and mandates financial disclosures in the United States, a government agency can train its attention on incomplete or fraudulent GHG reporting by oil and gas companies. Currently, GHG-emitting companies do not report their ESG risks at all, or they do so inconsistently.

Efforts are underway to manage these risks in Europe. In 2019, the European Union established new rules for investors to incorporate harmonized ESG risks into their business procedures.¹² Establishing an auditable reporting system would permit regulators to challenge lacking or faulty ESG data. The OCI+ could aid such efforts by quantifying and ranking oil and gas assets by their individual climate risks.

Update GHG Inventories

The current oil and gas GHG inventory reports and nationally determined contributions (NDCs)¹³ submitted by governments under the Paris Agreement are woefully inadequate.¹⁴ One glaring example is oil refining. The US Greenhouse Gas Reporting Program shows constant emissions over the past decade even though major investments and capacity additions were made in this timeframe to process heavy, dirty crudes.¹⁵ Without accurate inventories, it is impossible to set and meet global climate targets. Existing flaws were exposed, for example, after a 2012 methane leak detected remotely in New Mexico when inadequate inventory data led to underreported GHG emissions by nearly a factor of four.¹⁶ The IPCC refined its 2006 guidelines for national GHG inventories in 2019 so as to help improve inventory accuracy.¹⁷ This is a particularly germane exercise for oil and gas because the sector significantly changed through the 2010s due to fracking and liquefied natural gas (LNG) shipment. Improved and updated inventories will facilitate OCI+ modeling and satellite-based GHG measurement and attribution studies.

Ban Residual Fuels and Waste Byproducts

Wealthier nations pay a premium for more refined petroleum products with fewer contaminants, while the degraded, less refined residuals with the highest levels of GHGs and air pollutants are cast off to poorer nations.¹⁸ Countries are reacting to this state of affairs, however, citing results from OCI+ analyses.¹⁹ For example, in 2016, China banned petcoke imports from the United States, which then shifted to India until that country’s Supreme Court banned the burning of high-sulfur petcoke nationwide.²⁰ In 2019, China followed suit, outlawing the use of high-sulfur petcoke from domestic and imported sources.²¹

Similar dumping concerns involve high-sulfur bunker fuels used by maritime vessels traveling in open seas where no single country governs (the global commons). In 2020, the International Marine Organization initiated a ban on the use of heavy fuel oils exceeding 0.5 percent sulfur.²² Plastic straws and single-use plastic bags are also targets of national bans.²³ For bans to be successful, there need to be market-ready, affordable, low-GHG substitutes available; suppliers cannot use displaced feedstock for other products; and rules must be strictly enforced.²⁴ There also must be proper disposal options in the short term when refiners are not able to shift operations to adjust these product slates.

Collect Open-Source Oil and Gas Data

Decision makers need oil and gas data to determine which assets to turn off in a managed ratcheting down of some parts of the hydrocarbons industry and which to turn back on after the global coronavirus pandemic temporarily destroys demand.²⁵ Policies mandating transparency provide knowledge to governments and civil society. For example, US legislation, the Know Your Oil Act, was introduced in 2015 and again in 2017 to authorize federal agencies to collect and publish oil and gas data.²⁶ Similar state legislation was introduced in California in 2020 to create public libraries with production and refining data.²⁷ And work is underway to expand the legislative language to include gas.

If enacted, these policies would help the OCI+ model better identify cost-effective climate mitigation strategies for global oil and gas assets. Several articles in the Paris Agreement specify the need for transparency and public access to information to support the UN’s Sustainable Development Goals (SDGs). Efforts to digitize big data in the oil and gas sector could further enable climate transparency.

Expand and Integrate Remote Sensing and Expedite Public Reporting

Independent, nearly real-time data collection is required to verify GHG monitoring and reporting. As such, remote sensing equipment operated by government space agencies, private firms, academic researchers, NGOs, and other actors is on the rise. Redundancy helps such sensors avoid missing hard-to-detect GHG emissions blocked by clouds, released in geopolitically sensitive regions, discharged intermittently, or below equipment detection limits. Multiple devices can be used to correct erroneous reports and prevent the sale of misleading GHG data.²⁸ This calls for a remote sensing ecosystem approach, such as advanced by Carbon Mapper, a collaboration of National Aeronautics and Space Administration (NASA)/Jet Propulsion Laboratory (JPL), the California Air Resources Board, Planet, the University of Arizona, the Rocky Mountain Institute (RMI), the High Tide Foundation, and other philanthropies.²⁹

For example, in November 2019, remote sensors picked up elevated methane and benzene levels followed by high flaring in the southern United States: the anomalies turned out to be a blowout in a Texas Eagle Ford gas well. By triangulating remote-sensing devices along with the OCI+ model, experts estimated that the well blowout emitted nearly 100 times more methane than would have been released from normal operations.³⁰ Sensing a gas plume is not enough. Questions remain about its methane content and the intermittency of emissions, questions that require additional analysis. Integrated diagnostics will be increasingly important for evaluating and mitigating supply-side oil and gas GHG emissions.

Update Supply-Side Projections of Oil and Gas GHG Emissions in Countries’ NDCs

Countries report and update their GHG emissions under the Paris Agreement through the NDCs they submit.³¹ Governments are tasked with accurately reporting GHG levels and mitigation measures for all petroleum sources in their jurisdictions. However, in their initial NDCs, the majority of countries did not expressly indicate mitigation measures for their oil and gas supply chain emissions. The NDC updates posted beginning in 2020 need to increase their ambition and include more specificity on reductions in the GHG emissions from oil and gas production, processing, refining, and shipping operations.

These voluntary submissions should include not only CO₂ but also other GHGs—methane, nitrous oxides, black carbon (particulate matter [PM]), volatile organic compounds (VOCs), nitrogen oxides, carbon monoxide, and fluorocarbons. Peer-reviewed studies using the OCI+ models offer insights through cross-national supply-side GHG comparisons that identify highly variable emissions that can be readily mitigated.³²

Regulate Methane Tightly

Global methane emissions are at all-time global highs, and leakages throughout the oil and gas sector are primary drivers of this trend.³³ As such, policymakers are beginning to regulate short-lived climate pollutants (SLCPs) like methane. In North America, for example, the Obama administration set out to plug fugitive emissions from leaky equipment, while Mexico adopted regulations to curb methane, and Canada regulated production facilities. Meanwhile, Canadian provinces added gas capture to drilling permits and set limits on methane venting.³⁴ However, a broader science policy framework is needed to manage methane effectively.³⁵ Global rules are warranted on the grounds of both the climate-affecting and regional pollution that methane generates. Whether methane (along with other air toxics) are released through fugitive emissions, venting, or flaring, such practices not only exacerbate climate change but also can cause severe illnesses or even be lethal.³⁶

Coregulate GHGs and Air Pollutants

Global climate change worsens local air pollution and vice versa. These dual pollution problems sicken and kill many millions each year from heart disease, lung cancer, respiratory infections, heat exhaustion, and the spread of viruses, especially among poor and marginalized populations. Addressing one problem while inadvertently worsening the other can be deadly.³⁷ For example, in the 1990s, the European Union adopted tax breaks on the purchase of diesel cars because they are more fuel efficient and mitigate climate change. However, diesel fuel emits more PM, nitrogen oxides, and air toxins than gasoline and requires additional emission controls. As diesel car sales took off, VW and other European automakers rigged their cars to fraudulently pass tests, jeopardizing millions of citizens in the European Union and throughout Asia.³⁸

Governments cannot afford to focus on one problem at a time when it comes to protecting an atmosphere where pollutants know no boundaries. Moreover, decision makers in highly polluted regions can use air pollution as a political wedge to address climate change while also improving air quality.

Price the Oil and Gas Sector’s Lifecycle GHGs

We are all already imposing a costly price on carbon as the globe warms through higher air conditioning bills, infrastructure damages, agriculture losses, insurance premiums, and health care costs. But this effective tax is indirect and contains only costs—no benefits. Pricing GHG emissions directly provides ancillary benefits through lower emissions, as long as all responsible parties pay their fair share. A smart tax like this could use the OCI+ to assess fees on hydrocarbons producers, processors, refiners, shippers, and consumers based on their specific GHG responsibilities.³⁹ Applying carbon taxes only on gasoline (and other end-use petroleum products) places an unfair burden on motorists and misses the remainder of supply-side GHG emissions.

Effective carbon pricing must explicitly apply to the oil and gas industry’s Scope 1 and Scope 2 GHGs. And, if tackling all lifecycle carbon dioxide equivalent (CO₂e) GHG emissions is too massive an undertaking at the outset, a price could be placed initially on only methane emissions.⁴⁰ Instead of involving all actors, the fee would be targeted on this powerful SLCP and would charge a subset of industry actors—oil and gas suppliers, dairies, and landfills—and a few select consumers.

Establish a Methane Feebate on the Oil and Gas Industry

An alternative to charging fees, which are purely punitive, involves feebates—a self-financing system of fees and rebates that not only penalizes poor performance but also rewards good behavior.⁴¹ Feebates have already been applied to motor vehicles to motivate consumers to purchase more fuel-efficient cars and trucks. As governments worldwide struggle to adopt a carbon fee or tax, they can instead focus first on a single SLCP in a single sector.

Establishing a methane feebate on the oil and gas sector would create a disincentive for industry operators that discharge methane and offer rebates to those that conduct routine methane monitoring, reporting, and verifying; do not routinely flare; minimize fugitives; and eliminate venting. Fees can be used to pay for rebates, independent certification, and other program administrative expenses, imposing no direct cost on the public to reform industry practices and foster innovation in the abatement of methane emissions.

Prohibit Oil and Gas Operations in Fragile Ecosystems

Some ecosystems are more fragile than others and carry outsized climate risks, including the Arctic and Antarctic, permafrost-covered lands, boreal forests, peat lands, rainforests, and other movement- and flood-prone areas. When oil and gas are present, oil and gas industry actors often exert economic pressure to develop these areas.⁴² The OCI+ estimates the effect that land use in these areas has on GHG emissions.

The risks vary depending on the landscape. In the Arctic, burning diesel and residual fuels emits black carbon that accumulates on permafrost, heating it up, melting it, and then releasing stored pockets of CO₂ and methane.⁴³ The abrupt thawing of frozen ecosystems can cause an outpouring of emissions and cause land to suddenly sink (or subside), damaging pipelines and other infrastructure that further damages sensitive ecosystems.⁴⁴ Likewise, developing oil and gas operations in rainforests disrupts and dries out biomes that naturally store CO₂.⁴⁵ Although ranching and farming may convey large risks, installing and operating oil and gas infrastructure in these sensitive ecosystems is also debilitating. Blanket prohibitions are challenging, especially in nations where the rule of law is difficult to enforce. But outright prohibitions may ultimately be necessary to prevent runaway climate change.

Update Global Warming Potentials

Global warming potential (GWP) is a handy way to sum up different GHGs with different radiative forcing properties and report their varying emissions on a standardized CO₂e basis. In 1990, the IPCC laid out GWP assumptions for different GHGs, and as scientists uncover more data, the calculus of GWPs continues to evolve in their assessment reports (ARs).⁴⁶ For example, in 1990, methane’s 100-year and 20-year GWPs were 21 and 63, respectively. These values were updated in 2005 (AR4) to 25 and 72, and again in 2013 (AR5) to 36 and 86. They are due to be updated yet again (AR6) in 2021–2022.⁴⁷

The current GWP approach masks the true behavior of potent SLCPs like methane. Researchers are developing a brand-new GWP metric—CO₂ warming equivalent (CO₂-we). This method will theoretically account for SLCP emission reductions more accurately than current methods in carbon budgets alongside long-lived climate pollutants.⁴⁸ Nevertheless, many governments, companies, and civil society actors are still using outdated AR4 GWPs from 2005, which significantly undercount the climate-forcing potential of GHGs and the value of SLCP mitigation. Using current GWPs is especially important in the oil and gas sector, where methane and black carbon are quite prevalent.

Facilitate Clean Energy Tech Transfer for Oil and Gas

Major climate innovations in the petroleum sector are long overdue. In the oil industry, budgets for clean energy R&D and technology transfers amount to miniscule fractions of pennies on the dollar, a tiny share of capital expenditures. Consequently, low-GHG breakthroughs in oil and gas systems have not occurred. The same is true of public R&D spending on energy, which has remained flat as a share of gross domestic product since the 1980s.⁴⁹ Discovering and inventing low-carbon energy technology requires continued support for R&D and technology transfer.

For example, the creation of a new US federal agency—which could be called the Advanced Research Projects Agency–Climate (ARPA-C)—has been floated.⁵⁰ The idea would not be to duplicate the efforts by the Advanced Research Projects Agency–Energy (ARPA-E), which focuses on non–fossil fuel energy breakthroughs. Rather, in tackling climate change head-on, ARPA-C could tackle oil and gas R&D, an area that ARPA-E has largely avoided. The abundance of US shale resources calls for an agency dedicated to reducing the GHG footprint of the oil and gas sector. Public R&D paired with technology transfer in conjunction with private and NGO sector collaboration will be vital for a successful clean energy transition.

Accelerate R&D for Nonenergy Petroleum Products

A million-mile car battery is under development that could wean the transportation sector off gasoline fuel.⁵¹ This breakthrough follows decades of research aimed at boosting motorists’ confidence in the reliability of electric vehicles (EVs). Battery research underscores the need for similar R&D efforts to replace all of the other commodities derived from a barrel of oil, including other fuels and nonenergy petroleum products. Accelerated R&D is needed to replace the complex hydrocarbons that make up petrochemicals with green electrons. This is a tall order for lubricants, waxes, solvents, sulfur, and a plethora of other petrochemicals that are the backbone of many industries.

The search is on for ready replacements, especially low-GHG substitutes. For example, US and Canadian national laboratories are studying how to turn continuous supplies of excess, cheap renewable electricity (and their enabling electrons) into carbon-neutral petrochemicals and fuels.⁵² Such theoretical pioneering approaches can involve chemical processes that build up CO₂ and water rather than break down and refine hydrocarbons to manufacture industrial inputs. The quest for such renewables will likely proceed slowly.⁵³ Nonetheless, the fact that many GHG emissions stem from unexpected corners (and byproducts) of the petroleum industry means that such solutions are necessary: without such progress, other efforts to curb GHG emissions will fall far short of the world’s stated climate mitigation goals.

Research Climate Engineering Impacts

The earth’s temperature is rising with concomitant risks for environmental protection, public health, economic fallout, and geopolitical security. In response, scientists in the public and private sectors are exploring engineering approaches that would involve altering and recalibrating the planet’s climate system, known as climate engineering or geoengineering. Governments are partnering with international oil companies (IOCs), for example, in Canada, California, and Switzerland, to advance direct air capture (DAC).⁵⁴ And oil-producing nations like Saudi Arabia and the United States are blocking efforts to examine the risks of DAC and other technologies that affect the atmosphere, oceans, and land.⁵⁵ As climate engineering gains traction, there need to be greater (not less) transparency on efforts underway, more international dialogues on the progress achieved to date, and reliable assessments on its feasibility, risks, and benefits.⁵⁶ To succeed, geoengineering will modify the earth’s climate, whether by scrubbing CO₂ out of the air, blocking sunlight by injecting chemical particles into the atmosphere, thinning clouds, accelerating the earth’s carbon uptake, or seeding oceans. Prudent public research, governance, tracking, disclosure, and coordination of climate engineering is necessary, and ARPA-C, discussed earlier, could provide agency oversight on climate engineering as well as other forms of climate mitigation.⁵⁷

What Industry Can Do

In an ideal world, governments would take hold of the reins on climate change mitigation. But multinational climate governance to date has not been an outright success. Moreover, government leadership is fraught when it comes to oil and gas supply-side GHGs because these resources pad (and in some cases dominate) governments’ budgets and further a nation’s geopolitical clout. Nevertheless, even a hint of forthcoming climate policy action, as discussed previously, could motivate some companies to act and become tomorrow’s zero-GHG energy providers.⁵⁸ For those companies that choose to seriously mitigate their climate footprints, there are ample opportunities to reduce their supply-side oil and gas emissions. Their motivations for doing so can span from outdoing competitors to upgrading their own ESG rating. Each company has its own calculus, using various methods (like shadow pricing their GHG emissions) to determine their respective climate liabilities in the face of changing markets, government action, or civil society pressure. Investors, industry consultants, assurance agents, and other industry actors abide by their own set of climate priorities and methods. Table 8.3 identifies a host of recommended industry strategies, especially ones that satisfy the maximum number of overriding principles possible.

Table 8.3 Industry Strategies to Reduce Supply-Side GHG Emissions (Ranked by Guiding Principles)

Industry Supply-Side GHG Strategies	Principle #1: The Public Has a Right to Know	Principle #2: Prices Reflect Social Costs	Principle #3: Hold Industry Responsible	Principle #4: Position Sector on Safe Climate Path
Accelerate research on NETs	x	x	x	x
Integrate renewables into oil and gas systems	x		x	x
Create a new reporting framework for oil and gas supply-side GHGs	x		x	x
Apply future production quotas to high-intensity GHG oil and gas assets		x	x	x
Commit to zero routine gas flaring, fugitives, and venting			x	x
Decommission targeted oil and gas assets			x	x
Submit and update corporate climate plans	x			x
Stop financing high-GHG projects	x	x
Incentivize top-down corporate climate mitigation		x	x

GHG, greenhouse gas; NETs, net-zero emission technologies.

Source: Author’s assumptions.

Accelerate Research on Net-Zero Emissions Technologies

All technological advances are not equally effective at reducing lifecycle GHG emissions. Net-zero emissions technologies (NETs) require further research to evaluate their effectiveness before they are widely deployed.⁵⁹ In many cases, it is better to use ancillary pockets of GHGs that the oil and gas industry produces anyway rather than harvest additional, naturally occurring GHG supplies solely to use them for ostensibly more ecofriendly petroleum operations. For example, removing CO₂ from underground caverns (where nature has already stored it) and using it for enhanced oil recovery (EOR) does not qualify as a low-GHG carbon capture and storage (CCS) approach. Nor does developing an ultra-sour gas field to strip off its CO₂ and inject it in EOR operations. Conversely, DAC technologies that capture CO₂ directly from the air to manufacture synthetic transport fuels returns at least some of the captured CO₂ into the atmosphere through its lifecycle and could be considered a NET.

Ongoing research is needed to guarantee that CCS, DAC, and other similar techniques certifiably result in net-negative emissions—removing more lifecycle GHG emissions than they produce. To reverse global warming, NETs will require international buy-in and be employed on a planetary scale while safely storing CO₂ without unintended societal consequences.

Integrate Renewables into Oil and Gas Systems

To at least partially offset their traditional dependence on the massive energy inputs of their own byproducts and intermediaries to fuel their operations, oil and gas companies are slowly substituting renewable energy sources in their supply chains in various ways. These methods include employing renewables to make the hydrogen, steam, heat, and electricity they use onsite for oil and gas operations. For example, Aera (a joint venture with ExxonMobil that Shell is now exiting) plans to install the largest concentrated solar array in California for steam-injection EOR.⁶⁰ And Equinor is installing the world’s largest wind farm in the North Sea to power its oil and gas platforms and millions of homes.⁶¹

Full integration of renewables into oil and gas systems will not only reduce the climate footprint of their operations but also help the industry capitalize on clean energy sources, diversify its portfolios, and cross-train its workforce for future deployment in the renewables sector. That said, in the notoriously boom-and-bust petroleum industry, successful integration of renewables will require uninterrupted private financing from companies and their investors.⁶²

Create a New Reporting Framework for Supply-Side Oil and Gas GHG Emissions

Oil and gas operations are unlike other industrial entities in that they use vast quantities of their own petroleum products to manufacture the commodities they sell. The tight (often vertical) integration of this diverse and mature industry means that companies are at once oil and gas consumers and producers. Existing GHG accounting and reporting protocols do not suit the oil and gas sector because they miss GHG emissions from a variety of sources including byproducts (like petrochemicals and petcoke) and ancillary operations (like hydrogen production and distribution).⁶³ Incomplete reporting makes it impossible to compare corporate climate risks.

This point is especially germane for investors as they develop low-GHG financial products, services, and indices. For example, in 2019, Goldman Sachs announced that it would restrict financing to new oil exploration and production in the Arctic and adopt strict lending policies for fossil fuel companies.⁶⁴ The European Investment Bank announced an end to its multi-billion-euro financing for new oil, gas, and coal projects after 2021.⁶⁵ And the hedge fund TCI is applying pressure on asset managers that do not require public GHG reports from the corporations they invest in to change their ways, an indication that financial traders are increasingly concerned about how climate change affects their portfolios.⁶⁶ Tailoring GHG reporting and certification to suit supply-side oil and gas GHG emissions could close the gap on emissions leakage and better target the operations that pose the highest climate risks.⁶⁷ An example of such a voluntary corporate certification program that could also be adopted by governments is the methane intelligence quotient (MiQ) standard that differentiates natural gas production and midstream emissions based on their varying methane emissions.⁶⁸

Apply Future Oil and Gas Production Quotas to High-Intensity GHG Assets

Geopolitics fueled the six-month embargo of Middle Eastern oil to the United States and Western Europe in 1973 in retaliation for supporting Israel during the Yom Kippur War. Today, disruptions in the Middle Eastern oil trade tend to be economic in nature. For example, in 2020, Saudi Arabia and Russia orchestrated voluntary oil production cuts to prop up petroleum prices that had collapsed when demand waned during the coronavirus pandemic and ensuing economic lockdown. Such market collusion is not uncommon, especially by the twenty-three countries in the Organization of Petroleum Exporting Countries-plus (OPEC+) coalition that controls about half the world’s oil production.⁶⁹

From an environmental perspective, the same tactic could ultimately work to address climate change by systematically shutting down (or not turning back on) assets that generate the highest GHG emissions.⁷⁰ If migration, rising sea levels, hunger, and political unrest mount due to global warming, Saudi Arabia and others could get more serious about combating climate change. They would then have the market power to orchestrate a race to the top that favors producers and refiners, like themselves, that offer products with the lowest GHG emissions.

Commit to Zero-Routine Flaring, Fugitives, and Venting

With methane emissions at an all-time high, efforts are getting underway to stop routine gas flaring and venting and plug fugitive emissions from well completions, workovers, liquids unloading, corroded pipelines systemwide, and many other aspects of oil and gas operations.⁷¹ In 2018, for example, the Nigerian National Petroleum Corporation announced a new strategy by which it would utilize all of its gas and prohibit routine flaring by 2020.⁷² But ample progress has not been made. In 2021, Nigeria was named as one of seven countries with the most continuous flaring worldwide.⁷³

Likewise, in 2019, several big oil and gas companies withheld support for the rollback of US methane emissions standards over concerns that noncompliant operators could provoke even tighter, more prescriptive regulations down the line.⁷⁴ At least eleven companies signed on to new guiding principles for methane that improve the accuracy of methane emissions data, advocate sound methane regulations, and increase corporate transparency.⁷⁵ Recent efforts underway through industry collaboratives, such as the Methane Guiding Principles, are geared toward mitigating methane in the oil and gas sector.⁷⁶ However, there is a limit to voluntary oversight, according to Shell’s former CEO.⁷⁷ Although methane is money and leak-free systems make business sense, the industry still requires clear guidelines to level the playing field between industry actors worldwide, large and small, operating in different geographic settings.

Plan to Decommission Targeted Oil and Gas Assets

Petroleum systems are not designed to operate forever. Over time, the GHG emissions generated by a given oil field or gas field tend to rise as their hydrocarbon assets age and are depleted. The lifetimes of these petroleum assets can be cut short by accidents (such as fires) and incidents (such as storms and rising sea levels) that can cause irreparable damage. Detailed plans to decommission damaged, depleted, and old fields and facilities rather than sell them to another company can prevent high-GHG operations from merely trading corporate hands after their usefulness and profitability erode or end.

This insight applies to wells, production sites, tank batteries, processing plants, refineries, shipping terminals, pipelines, and other petroleum facilities. For example, successful efforts include the United Kingdom’s Brent production platforms (the highest-GHG asset currently modeled using the OCI+), which are in the process of being decommissioned after some forty years in operation. But the climate would have benefitted if Brent had been decommissioned a decade earlier than it actually was. Likewise, a bankruptcy judge moved to decommission (rather than rebuild) an old Philadelphia refinery that was damaged in a 2019 fire.⁷⁸ Periodic economic downturns, pandemics, and other exogenous forces shine a spotlight on oil and gas assets whose climate costs have come to outweigh their energy benefits. Planning ahead to safely decommission and decarbonize these legacy assets is consistent with climate pledges and low-GHG energy strategies.

Submit and Update Corporate Climate Plans

Corporate climate pledges have become the norm since the 2015 Paris Agreement was signed. Take, for example, BP’s pledge to offset its CO₂ emissions by 2050 or Shell’s ambition to become a net-zero energy business by that same year.⁷⁹ Without transparent, standardized, routinely updated climate plans, however, these pledges are just fleeting words that governments, NGOs, and investors struggle to assess and compare.

A credible climate plan contains certain steps that, if missing, courts may weigh in and order.⁸⁰ First, each company formalizes its public climate commitment to reduce its GHG emissions. Next, operational and equity emissions are inventoried, mitigation measures are developed, and reduction targets are set to maintain compliance with the Paris Agreement. Going forward, on an annual basis, inventories are adjusted, targets are updated, and future GHG levels are forecast. Financial disclosures are provided to detail capital investments in oil, gas, nonfossil fuels, and other projects and report on spending on low-carbon R&D. Finally, companies can engage with low-GHG suppliers, remain active in low-carbon joint ventures with private and public actors, and adopt industry best practices. Armed with credible corporate climate plans, NGOs can track companies’ actions to assess whether a given petroleum company is positioned to meet the targets under the Paris Agreement.⁸¹

Stop Financing High-GHG Oil and Gas Projects

Companies have historically received funds from numerous investors to finance their projects. Investors are increasingly shying away from funding oil and gas capital expenditures. For example, Lloyd’s Banking Group⁸² and JP Morgan Chase (reportedly the oil industry’s bank of choice) announced they would no longer finance Arctic oil and gas projects.⁸³ And BlackRock is planning to broadly steer its funds away from fossil fuels and into sustainable investments.⁸⁴

These are wise moves on climate grounds. But investors, reinsurance companies, and risk firms can do even more to strategically defund future oil and gas projects with the highest GHG emissions. The data needed to make such climate determinations exists. Larger oil and gas companies use shadow prices to account for climate policies and determine if a given project will be economically viable under a GHG price regime. Investors should obtain shadow pricing data to inform their decision-making, and if these data are not available, investors can use the OCI+ to estimate the climate impacts of certain oil and gas projects. Such a targeted exit by investors from oil and gas funding can lead to greater climate benefits in the short term than a broad-based approach that selects only a few assets to strand.

Incentivize Top-Down Corporate Climate Mitigation

The oil and gas industry is a top-down business with many ancillary divisions and byzantine financial considerations. Managing climate change has historically not been a priority in companies’ centralized plans, which use financial incentives to change the industry’s mindset and culture. New incentives for climate mitigation are coming to light, however. For example, in 2016, Shell announced plans to link executive pay to short-term carbon emissions targets, and in 2019, BP announced it would link the bonuses of its employees to reduction targets for GHG emissions.⁸⁵

Other companies are focusing corporate incentives on specific operations, such as Chevron’s move to create a scorecard for reducing methane emissions and flaring intensity, a move that would determine new ways to gauge incentive pay for its thousands of employees. Since a significant share of GHG emissions are the direct responsibility of oil and gas operators yet indirectly under the watchful eye of such companies’ CEOs, companies can use top-down corporate incentives to more reliably reduce their GHG emissions.

What Civil Society Can Do

Social movements are designed to change people’s views, press for government action, and compel industry decisions. Civil society actors have many ways to bring about desired change. Reforming the global oil and gas sector via such societal pressure requires technical and economic knowledge, systems-level thinking, and long-term time horizons. Table 8.4 identifies several top strategies for civil society to consider, especially ones that maximize the number of guiding principles that they satisfy.

Table 8.4 Civil Society Strategies for Reducing Supply-Side GHG Emissions

Civil Society Supply-Side GHG Strategies	Principle #1: The Public Has a Right to Know	Principle #2: Prices Reflect Social Costs	Principle #3: Hold Industry Responsible	Principle #4: Position Sector on Safe Climate Path
Advocate for Know Your Oil regulations	x	x	x	x
Establish low-GHG certification for oil and gas	x	x	x	x
Demand near real-time MRV for oil and gas GHGs	x		x	x
Tap the expertise of retirees from industry and government	x		x	x
Tailor divestment decisions to lifecycle GHG emissions	x		x	x
Urge endowments to adopt GHG investment criteria	x			x
Incorporate supply-side oil and gas emissions in updated NDCs			x	x
Promote incentives to safely decommission and redevelop oil and gas properties			x	x
Conduct R&D on refining for a clean energy transition			x	x
Facilitate tech transfer of open-source GHG tools and remote detection systems	x		x

GHG, greenhouse gas; MRV, monitoring, reporting, and verifying; NDCs, nationally determined contributions; R&D, research and development.

Source: Author’s assumptions.

Advocate for “Know Your Oil and Gas” Regulations

More oil and gas data will likely result in more petroleum studies performed and climate intelligence acquired by civil society actors in academia and the NGO community. The assumptions that underpin these actors’ respective research and advocacy activities must be updated to keep pace with new knowledge about the highly heterogeneous nature of hydrocarbon resources worldwide.

The ability to differentiate these resources’ diverse GHG emissions can lead to more nuanced policy analysis and public campaigns. For example, legislation to promote oil and gas transparency advanced by RMI (formerly Rocky Mountain Institute), the Natural Resources Defense Counsel and Communities for a Better Environment can have impactful multiplier effects. Using an oil with half as many GHG emissions per barrel in a car that is twice as fuel efficient would result in reduced emissions by a factor of four for each mile driven. Whether civil society is developing emissions offsets for future petroleum projects or lobbying to prevent oil and gas development in the Arctic, civic actors can quantify oil- and gas-specific climate benefits with the OCI+, leveraging these insights to develop more persuasive policymaking arguments and put the onus on industry to provide greater data transparency in the future.

Establish Low-GHG Certification for Oil and Gas

Another workaround civil society can use to buttress policymaking is through certification programs that differentiate whether or not ESG elements apply to a given commodity, as has been done for fair-trade coffee and sustainable palm oil.⁸⁶ Such a program for low-methane oil and gas could certify that operators in the supply chain tightly manage and do not inadvertently or purposefully leak methane. NGOs like RMI and Resources for the Future are working to certify and shift the market to low-emissions gas.⁸⁷

The OCI+ can support certification by modeling global gas assets and creating a rubric that quantitatively estimates any operation’s methane leakage, flaring, venting, and combustion emissions.⁸⁸ Factoring a fair emissions premium into natural gas market prices could extend beyond civil society actors and require a commitment to a universally accepted methodology and implementation scheme by buyers, sellers, certifiers, regulators, and industry organizations.⁸⁹

Demand Near Real-Time Monitoring, Reporting, and Verifying for Oil and Gas GHGs

It is not enough to have decent laws on the books if industry actors do not abide by them and instead opt to pay fines or if rules are not duly enforced. In such cases, civil society needs to invoke other tools. One option is for civic actors to establish their own monitoring, reporting, and verifying (MRV) programs operating alongside government programs. For example, Climate TRACE,⁹⁰ an alliance of civil society actors supported by Google, uses artificial intelligence to rapidly and simultaneously analyze various GHG monitoring data, a multi-NGO initiative aimed tracking emissions from all sectors in all countries, with RMI using the OCI+ to provide oil and gas emissions.⁹¹

Extending rapid monitoring to the oil and gas sector will present new data challenges owing to the industry’s constellation of resources, various actors, global reach, market power, and geopolitical sway. These complications can be remedied through close coordination between these NGO efforts, government scientists (such as NASA’s Carbon Monitoring System [CMS] network), Carbon Mapper, Methane SAT, and other remote sensing instruments. Such multi-dimensional, multi-stakeholder GHG tracking system can help resolve monitoring disagreements and reduce market confusion and industry meddling.

Tap the Expertise of Retirees from Industry and Government

A retirement wave has hit the oil and gas sector in recent years, and another one is coming.⁹² The share of baby boomers, who accounted for 19 percent of the oil and gas workforce in 2015, is projected to plummet to 7 percent by 2025.⁹³ Given record-low oil prices in 2020, slated retirements could be compounded by a flood of layoffs.⁹⁴ This is good news for civil society organizations that desire to enlist technical professionals with experience in the petroleum industry to join the cause of combating climate change.⁹⁵ Similarly, scientists retiring from national laboratories can share their expertise with civil society.⁹⁶ Technical projects like Climate TRACE and science policy NGOs could benefit greatly from the involvement of retiring scientists from the oil and gas industry and government laboratories, experts whose main goal is to hand down a positive legacy.

Tailor Divestment Decisions to Lifecycle GHG Emissions

Even the most ardent advocates prodding investors to divest from the oil and gas industry will have a hard time maintaining an investment portfolio with absolutely no oil and gas assets baked into it. Removing IOCs from portfolios may seem like an obvious, straightforward play, but what if one company’s assets have a lower GHG footprint than another? And what about natural gas suppliers? Then there is the question of airlines, big-box stores, food companies, and pharmaceutical firms that all require petroleum products in one form or another to serve their customers’ needs.

Rather than write off entire swaths of the economy, divestment campaigns can parse oil and gas assets held by different companies and pressure them to shift their portfolios to truly low-GHG resources and operations. For example, certain oil and gas assets, such as LNG projects, remain favorable with investors, while others (including deepwater oil) have not regardless of their actual respective GHG footprints.⁹⁷ Civil society investor initiatives like Climate Action 100+ can work with companies to move beyond disclosing corporate climate risks to dissecting and differentiating them.⁹⁸ Efforts are underway to bring financial institutions’ investment activities into alignment with climate goals.⁹⁹ The ability to quantify lifecycle GHG emissions at the asset level using the OCI+ provides civil society actors with the technical details they need to target pressure points, assess trade-offs, and prevent unintended consequences.

Urge Endowments to Adopt GHG Investment Criteria

Those who manage public and private endowments seek to maximize returns. They also tend to be underresourced when it comes to their climate initiatives.¹⁰⁰ They tend not to have clear-cut criteria for cutting their given portfolio’s GHG emissions. Minimum standards could help rationalize investors’ decision-making, replace blunt determinations, and direct divestment decisions.

Minimum standards like those for food or medicine could be set for GHG investments. For example, it is not uncommon for civic actors to call out a particular resource type, like oil sands, and simply demand that investors divest from any company that manages such assets, regardless of whether a particular firm’s GHG emissions are or are not lower than those of other oil and gas assets.¹⁰¹ The New York State Common Retirement Fund has set out numerous criteria for making such evaluations, such as investing in companies that have a track record of reducing their GHG emissions rates year on year and divesting from companies that have no climate policy in place.¹⁰² Endowment managers could benefit from a structured approach, one that both educates them and employs incentives to encourage them to develop and implement low-carbon investment plans.

Incorporate Supply-Side Oil and Gas Emissions in Updated NDCs

Given that the United Nations is in charge of collecting countries’ updated NDCs under the Paris Agreement, civil society has an opportunity to engage countries on their supply-side oil and gas GHG emissions. The first round of NDCs submitted after the 2015 UN Climate Change Conference in Paris largely missed the potential to drastically reduce emissions.

In addition to stressing demand-side reductions of transportation fuels and increased renewable energy supplies, there is a parallel conversation that civil society actors can foster about countries’ oil and gas production, refining, and shipping activities to make sure that they are covered in GHG inventories and slated for climate mitigation measures.¹⁰³ One way to accomplish this is for civil society actors to appeal to nations with the lowest supply-side oil and gas GHGs—including Norway, Saudi Arabia, and Qatar—and engage them in a conversation at future follow-on summits.

Promote Incentives to Safely Decommission and Redevelop Oil and Gas Properties

Decommissioning and removing oil and gas assets offers companies little to no return on their investment. But permanent shutdowns and abandonments can have major public benefits for civil society, including significant reductions in GHG emissions. For example, once the United Kingdom’s Brent oil field is entirely decommissioned, it is estimated that over one tonne of CO₂e will be curbed for each BOE produced by a low-GHG gas asset.¹⁰⁴ This assumes that high-GHG volumes would be replaced by another field somewhere else that can produce oil and gas with a smaller carbon footprint. But if petroleum demand is also cut, even more GHGs can be reduced.

Beyond GHG savings, the environmental impacts and future uses of decommissioned properties are hotly debated topics, and civil society actors are best suited to influence procedures and redevelopment decisions.¹⁰⁵ In the case of Brent, Greenpeace activists are calling for zero oil waste to be dumped into the sea, which is a possible risk because even abandoned oil and gas wells can leak methane and other emissions in the future. Oil and gas decommissioning plans should include financial incentives for companies to set aside part of their proceeds to entirely eliminate future climate and other environmental risks—and in some cases they could even redevelop properties for public benefit—when outdated projects reach the end of their useful lives.

Conduct R&D on Refining for a Clean Energy Transition

The future is highly uncertain for global oil refiners that have tight profit margins and limited technical flexibility to shift their operations. Regardless, experts typically associate oil with only gasoline when, in reality, crude comprises thousands of other commodities too.¹⁰⁶ The 2020 coronavirus pandemic dealt an uneven hand to refining operations, slashing demand for jet fuel and gasoline, barely affecting diesel fuel, and radically shifting petrochemical feedstocks from car seats and pipes to personal protective gear and food containers.¹⁰⁷ While not all oil companies plan to abandon refining, pessimistic oil demand projections along with calls to decarbonize have Shell and BP shedding their petroleum assets.

Over the long term, however, demand for petroleum products like lubricants, solvents, asphalt, fertilizer, and medicines will persist. The prospects of refining in a low-carbon future are understudied but crucially important.¹⁰⁸ This calls for academics (along with national academies of engineering and other disciplines) to ramp up R&D on refining innovations that drastically reduce GHG emissions while pursuing benefits from petroleum products that do not have non–fossil fuel substitutes.

Facilitate Technology Transfer of Open-Source GHG Tools and Remote Detection Systems

Amid the ongoing quest to invest in R&D for mitigating climate change, part of the puzzle is expanding the OCI+ model by adding global gas assets, expanding fugitive emissions modules, and updating refinery process calculations. Other academic efforts complement the OCI+. For example, Harvard, CalTech, the University of Arizona, and the Colorado School of Mines are each involved in exploring the potential of remote GHG detection and developing open-source tools to input data they generate into models like the OCI+.

Academics are also working with various NGOs including the World Bank, Environmental Defense Fund (EDF), and RMI to scrutinize GHG emissions in the oil and gas sector.¹⁰⁹ And civil society actors like the United Nations–led Climate and Clean Air Coalition (CCAC) have voluntarily come together around the shared goal of reducing SLCPs to protect the climate and improve air quality. Philanthropic foundations and governments facilitate civil society research through grantmaking and other funding sources. Given how little funding the industry devotes to climate and air quality R&D, GHG mitigation is one area where civil society can lead as long as ample funds are available.

The Endgame

Where will all these noble efforts ultimately lead? The world has been wedded to oil and gas for nearing 150 years. Petroleum supplies sprung forth in the late 1800s. Over the course of the twentieth century, the industry took off owing to a series of technological advances, which most recently included the newest marginal barrel of oil and gas obtained through hydraulic fracturing and horizontal drilling.

Oil and gas have undeniably helped give rise to the modern trappings, innovations, and conveniences that characterize life in the twenty-first century and fueled globalization. Every economic sector, from transportation to power and agriculture to industry, has been advanced by hydrocarbons. The public surely benefited from the petroleum age in a multitude of ways. And the oil and gas industry and their host governments have also profited handsomely supplying these resources worldwide. But as oil and gas volumes have risen, so too have the societal disruptions they unleash. The world desperately needs an endgame for the gravest fallout of petroleum’s heyday: climate change.

A pervasive sense of desperation has the world clinging to simple solutions: we must stop producing and forgo using oil and gas, the conventional thinking goes. As desirable as such outcomes may be, they are difficult to deliver due to powerful and dynamic market forces that create new states of equilibrium in response to constant fluctuations in supply and demand. Absent other, far-reaching changes, for some individuals to use less petroleum would merely lower prices and cause someone else to use more (sometimes far afield), a trend that then tightens the petroleum supply and causes prices to rise back up, spurring more production.

Breaking this cycle is only made harder by the way that major world powers like the United States, Russia, and Saudi Arabia peddle oil and gas for financial and political gain. For their part, consumers are not sovereign actors that can turn off oil and gas spigots, especially since petroleum products feed all manufacturing and make up nearly everything ordinary consumers use every day. Lastly, GHGs pollute the climate regardless of where they are emitted, so reshuffling the petroleum deck into different byproducts sold in other places merely perpetuates global warming without tangibly addressing the underlying problem.

Rather than striving to eliminate oil and gas altogether, governments, companies, and civil society actors alike should embrace tailored strategies to minimize supply-side oil and gas GHG emissions. This task entails shifting our mindset and acknowledging three key facts: oil and gas are here to stay, they are becoming more heterogeneous, and the operations employed to extract, convert, and deliver these resources require greater attending to.

Although demand for petroleum products remains highly uncertain due to automation, pandemics, or economic volatility, it is highly unlikely that the world will transition to a 100 percent oil- and gas-free economy over the next thirty years, the period in which climate change is projected to impose high costs and carry dire consequences. The GHG footprints of existing supplies of oil and gas must shrink in the near term. Such actions can bridge the gap to a clean energy future, one that is carbon-free and more equitable, flexible, and resilient.

This is a tall order. The endgame for oil and gas in a warming world involves numerous pathways taken by different actors in different nations over many years. It requires shifting petroleum demand increasingly to green hydrogen and renewable electricity while figuring out how to make the oil and gas supplies remaining in the global economy generate net-zero emissions.

Now is the time to redress the prevailing opacity that has plagued the oil and gas sector with greater transparency about diverse hydrocarbons and their varying climate trade-offs. To this end, the OCI+ can provide ongoing climate insights to guide all actors as they use all available tools to develop the necessary short-term and long-term strategies. Using such tools will help the world make measurable gains now rather than postpone progress as the industry’s large GHG footprint grows even larger. As daunting as the task is, there is clearly room for well-tempered optimism and gradual progress if the petroleum industry, government regulators, and civil society work in tandem and decisively act on the creative supply-side solutions this book has sought to offer.