Despite the misrepresentation in the media and among the general public, the oil and gas industry invests billions of dollars toward developing new technology to reduce its environmental impacts and reduce greenhouse gas emissions. The industry straddles a precarious balance of meeting current energy demand through fossil fuels, while investing in the development of unconventional sources of energy that may provide a lower-impact fuel supply for future generations. The graph below demonstrates the oil and gas industry investing more resources than all other private industry combined, and over twice the amount of R&D spent by the U.S. Federal government on carbon mitigation technology. Part of this spend is mandated by regulatory requirements, however, a large portion of this investment is allocated by the industry as part of its mandate of being a responsible corporate citizen and mitigating the negative externalities of the industry.
While major incidents such as the Macondo spill garner considerable attention and necessary regulatory and public scrutiny, these incidents are increasingly rare, and the oil and gas industry in North America and Europe is subject to stringent environmental regulations that ensure that development takes into account the long term impacts of resource extraction. New projects, even in developing countries, are usually subject to a thorough and independently audited environmental impact assessment, which incorporates public stakeholder and non-government organization input into the planning and development process. Not only is reducing the environmental impact of operations good for corporate reputation and social responsibility, it is also motivated by its effects on the bottom line.
Several oil sands operators using SAGD in-situ drilling, which requires considerable inputs of natural gas in order to produce the steam to heat the underground bitumen, have invested billions of dollars to create technology which re-uses previously discarded asphaltenes from the refining process to provide energy for the steam process, reducing the need for natural gas inputs, lowering the overall energy impact of the operations and minimizing costs. Many cutting edge technological developments, such as carbon capture and storage, which aims to reduce CO2 emissions by storing them in underground reservoirs, are led by researchers and capital in private industry and oil and gas producers are currently working with governments to create a regulatory and legal framework for the technology.
The oil and gas industry is also one of the leading investors in end-use technology to reduce the overall environmental impacts of the industry. In a “well-to-wheels” life cycle analysis, which measures the greenhouse gas (GHG) emissions produced starting from initial oil extraction (“well”) to the combustion in a car engine (“wheels”), 70-80% of the GHG emissions occur at the combustion stage. By assisting in developing end-use technology, such as efficiency improvements, combustion additives, gas flare reduction technology and carbon capture and storage sequestration, the industry has taken an additional step in helping reduce the environmental impacts of its products. Unbeknownst to many, the oil and natural gas industry accounts for 22% of all investments made in North America in non-hydrocarbon fuels since 2000, such as wind and solar. The industry has also spent $21 billion dollars, larger than all other private industry and government investment combined, into fuel substitution technologies. Investments include substitution for less carbon intensive fuels such as liquefied natural gas and coal-to-liquids technology and the reduction of fugitive methane emissions.
