Manufacturing - Endeavor Business Media
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Manufacturing - Endeavor Business Media

How Oil and Gas Industry Leaders Are Navigating Carbon Reduction Goals

Oil and gas companies are searching for means to close the gap between ambition and reality

In a new survey conducted by Endeavor Business Intelligence on behalf of NextEra Energy Resources, 76% of leaders at oil and gas companies with operations in the United States say their organization is on track or ahead of its zero-carbon energy use goal. However, the devil is in the details. The survey data reveals significant challenges facing industry efforts to reduce carbon emissions and that companies are still experimenting with a wide range of means to chart a successful journey.
Learn the biggest challenges oil and gas companies face to continue progress toward emissions-reduction goals and how leaders are working to solve them.

Emissions reduction industry progress report

Goals and implementation
Emissions and reduction to date
Coals energy goals and use
Goals and implementation
More than 90% of oil and gas leaders surveyed said their organization has set a goal to reduce emissions and started implementation.
Has your organization set a corporate goal to reduce its greenhouse gas (GHG) emissions?
91% Yes; 9% Not yet, but planning to in the next 1-3 years
Which of the following best describes the current stage of your organization’s emissions-reduction journey?
10%
Planning stage
24%
Early implementation stage
33%
Mid-implementation stage
33%
Advanced implementation stage
Base: All respondents (n=175).
Goals and implementation
Emissions and reduction to date
Coals energy goals and use
Emissions and reduction to date
54% of survey respondents said their organizations have cut emissions by at least 11% from baseline.
Which of the following best describes the current stage of your organization’s emissions-reduction journey?
7%
The same or higher relative to the baseline used for our goal
33%
Down 1% to 10% from our baseline
38%
Down 11% to 25% from our baseline
6%
Down 26% to 50% from our baseline
5%
Down more than 50% from our baseline
3%
My organization has achieved net-zero emissions
Base: All respondents (n=175).
Goals and implementation
Emissions and reduction to date
Coals energy goals and use
Coals energy goals and use
Three-quarters of oil and gas leaders said their organization was on track or ahead of its goal for zero-carbon energy use, while 83% said more than a quarter of their organization’s energy use from operations came from zero-carbon energy sources.
What percentage of energy use by operations comes from zero-carbon energy sources?
18%
0 to 25%
58%
26 to 50%
20%
51 to 75%
5%
76 to 100%
How would you describe the percentage of energy use from zero-carbon energy sources at your organization?
25%
Behind our goal for zero-carbon enrgy use
62%
On track with our goal for zero-carbon energy use
14%
Ahead of our goal for zero-carbon energy use
Base: All respondents (n=175).

Macroeconomic environment creates carbon reduction headwinds

Macroeconomic growth trends are impacting U.S. oil and gas industry efforts to continue progress toward emissions-reduction goals.
Oil Rig icon
U.S. oil consumption
U.S. oil consumption
U.S. oil consumption was the most by any country ever in 20231
1www.eia.gov/todayinenergy/detail.php?id=61545
Fuel pump icon
U.S. gas consumption
U.S. gas consumption
U.S. natural gas consumption set an all-time record in 20232
2www.eia.gov/todayinenergy/detail.php?id=61923
Growth chart icon
Growth tensions
Growth tensions
33% said the tension between business growth and emissions reduction was one of the “biggest hurdles” to reducing emissions

Oil and gas industry emissions-reduction challenges

Internal uncertainty
Stakeholder pressures
Technical and operational limitations
About two-thirds of leaders surveyed strongly or somewhat agreed that it’s simply too expensive for their company to ever achieve net-zero emissions.
How strongly do you agree or disagree with the following statement?
It is too costly to achieve net-zero emissions at my company.
Base: All respondents (n=175).
33%
Strongly Agree
32%
Somewhat Agree
15%
Neutral
9%
Somewhat Disagree
11%
Strongly Disagree
How strongly do you agree or disagree with the following statement?
Clean energy and other emissions-reduction technologies are still maturing, so my organization wants to wait before investing in more projects.
Base: All respondents (n=175).
20%
Strongly Agree
43%
Somewhat Agree
22%
Neutral
8%
Somewhat Disagree
7%
Strongly Disagree
How strongly do you agree or disagree with the following statement?
My organization is waiting for a technology that is still not widely available (e.g., green hydrogen or small modular nuclear reactors) to make a major investment in reducing emissions.
Base: All respondents (n=175).
19%
Strongly Agree
35%
Somewhat Agree
25%
Neutral
11%
Somewhat Disagree
9%
Strongly Disagree
How strongly do you agree or disagree with the following statement?
There’s too much pricing uncertainty around clean energy and emissions-reduction technologies for my organization to make decisions.
Base: All respondents (n=175).
18%
Strongly Agree
34%
Somewhat Agree
23%
Neutral
15%
Somewhat Disagree
10%
Strongly Disagree
How strongly do you agree or disagree with the following statement?
It’s impossible to electrify or use zero-carbon fuels to conduct my organization’s operations.
Base: All respondents (n=175).
23%
Strongly Agree
25%
Somewhat Agree
21%
Neutral
16%
Somewhat Disagree
15%
Strongly Disagree
Internal uncertainty
Stakeholder pressures
Technical and operational limitations
Oil and gas leaders receive mixed messages from stakeholders. Companies often have many senior leaders and operate across many jurisdictions, meaning they must listen to and account for many differing voices.
How strongly do you agree or disagree with the following statement?
Investors are pressuring my organization to reduce emissions.
Base: All respondents (n=175).
39%
Strongly Agree
41%
Somewhat Agree
13%
Neutral
6%
Somewhat Disagree
1%
Strongly Disagree
How strongly do you agree or disagree with the following statement?
Senior leaders at my organization are creating pressure to accelerate emissions-reduction goals.
Base: All respondents (n=175).
19%
Strongly Agree
57%
Somewhat Agree
15%
Neutral
5%
Somewhat Disagree
5%
Strongly Disagree
How strongly do you agree or disagree with the following statement?
My organization is facing federal/state political pressure to accelerate emissions-reduction goals.
Base: All respondents (n=175).
31%
Strongly Agree
41%
Somewhat Agree
19%
Neutral
5%
Somewhat Disagree
3%
Strongly Disagree
How strongly do you agree or disagree with the following statement?
Customers are pressuring my organization to reduce emissions.
Base: All respondents (n=175).
21%
Strongly Agree
50%
Somewhat Agree
22%
Neutral
5%
Somewhat Disagree
2%
Strongly Disagree
How strongly do you agree or disagree with the following statement?
My organization is facing federal/state political pressure to roll back or cancel emissions-reduction goals.
Base: All respondents (n=175).
18%
Strongly Agree
41%
Somewhat Agree
18%
Neutral
13%
Somewhat Disagree
11%
Strongly Disagree
How strongly do you agree or disagree with the following statement?
Senior leaders at my organization are creating pressure to roll back or cancel emissions-reduction goals.
Base: All respondents (n=175).
18%
Strongly Agree
35%
Somewhat Agree
20%
Neutral
17%
Somewhat Disagree
10%
Strongly Disagree
Internal uncertainty
Stakeholder pressures
Technical and operational limitations
Technical and operational limitations
Six different emissions-reduction hurdles facing organizations were named by at least 25% of survey respondents.
What are the biggest hurdles to reducing emissions your organization faces, if any? (Multiple answers allowed)
Base: All respondents (n=175).
35%
Innovating and commercializing new low-carbon products
33%
Tension between business growth and emissions reduction
29%
Lack of data needed to make decisions
27%
Lack of clean energy supply to power our operations
27%
Legal or regulatory uncertainty

Top tactics to reduce emissions

Oil and gas organizations are searching far and wide for ways to reach their emissions-reduction goals. Surveyed leaders say their companies use or are evaluating the following measures:
96%
Software and analytics to optimize energy needs, usage, and trading
95%
Equipment management software or solutions
92%
Reduce methane or other GHG leaks in the supply chain
92%
PPAs or VPPAs for clean energy
91%
Partner with another organization to develop a low- and no-carbon fuels-focused business
89%
Develop a low- and no-carbon fuels transportation, storage, or distribution operation
88%
Electrify a greater portion of our operations
88%
Start or grow a standalone clean energy business unit
87%
Energy and energy efficiency consulting

How economic are clean energy supply alternatives?

Contracts for low-carbon fuels

0%

of oil and gas leaders surveyed say contracts for low-carbon fuels are usually economic.

Contracts for low-carbon fuels
Developing on-site renewable DERs.
Developing on-site fossil generation
Contracts for zero-carbon electricity
Developing on-site renewable DERs

0%

of oil and gas leaders surveyed say developing on-site renewable DERs, such as solar or battery energy storage, is usually economic.

Contracts for low-carbon fuels
Developing on-site renewable DERs.
Developing on-site fossil generation
Contracts for zero-carbon electricity
Developing on-site fossil generation

0%

of oil and gas leaders surveyed say developing on-site fossil generation is usually economic.

Contracts for low-carbon fuels
Developing on-site renewable DERs.
Developing on-site fossil generation
Contracts for zero-carbon electricity
Contracts for zero-carbon electricity

0%

of oil and gas leaders surveyed say contracts for zero-carbon electricity are usually economic.

Contracts for low-carbon fuels
Developing on-site renewable DERs.
Developing on-site fossil generation
Contracts for zero-carbon electricity
Reducing emissions is a complex challenge for any industry, particularly oil and gas. Assessing and implementing the most effective solutions requires expertise that is often out of the wheelhouse of oil and gas organizations. That could be why 83% of leaders said their company currently has or is evaluating a large-scale relationship with a clean-energy provider across multiple locations.

Additional Resources

How Are Oil and Gas Companies Getting the Clean Energy They Need?
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Many oil and gas operators have sought to electrify a greater portion of their operations in recent years. They now find themselves in intense competition for the electricity they need to power new projects.
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Most Oil and Gas Companies Say Emissions Reduction Efforts Are on Track
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This white paper explores survey data to reveal oil and gas companies’ goals for reducing emissions, the challenges they face and the measures they are pursuing to meet their goals.
 
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Planning a Strategic Energy Transition Looks Different for Every Company
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No two clean energy solutions are the same. Explore industry-leading insights, success stories, and white papers that have helped companies like yours meet their energy transition goals.

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