The oil and gas sector is at a critical turning point. Responsible for nearly 10% of global energy-related greenhouse gas emissions, according to a McKinsey report, this industry plays a significant role in climate change. Rapid decarbonization is essential for oil and gas companies that want to stay competitive in a changing market.

The urgency is clear. Investors are increasingly tying funding decisions to environmental performance. Governments worldwide are implementing stricter regulations on emissions, and carbon pricing is raising the cost of pollution. At the same time, customers and society expect companies to act responsibly.

This creates a challenging environment but also a major opportunity. Firms that reduce emissions effectively can improve their operational efficiency, avoid penalties, access subsidies, and strengthen their market position. The International Energy Agency emphasizes that reducing methane emissions from oil and gas is the most impactful near-term measure to limit global warming.

In this article, we explore three practical ways oil and gas companies can accelerate the energy transition. These approaches not only lower carbon footprints but also protect profitability and future-proof business operations.

Establish A Reliable Emissions Baseline

Before any meaningful reduction can take place, companies must understand their current emissions profile. Without a credible emissions baseline, it is impossible to identify the largest sources of pollution or measure progress over time. Many oil and gas operators still rely on rough estimates or incomplete data, leading to missed opportunities and poor reporting.

Investor expectations and regulatory frameworks demand transparency. Accurate, asset-level emissions data build credibility with stakeholders and provide a clear starting point for effective strategies. Companies with solid baselines consistently outperform competitors in both emissions reductions and cost management.

How To Build A Baseline

Creating a reliable emissions baseline involves a structured approach with three key phases:

  • Data Collection: Gather existing data from various sources such as SCADA systems, field logs, flow meters, and maintenance records. Where direct measurements are unavailable, use emission factors published by the EPA or industry bodies to estimate emissions. Focus on major contributors like combustion equipment, venting, flaring, and fugitive methane leaks.
  • Calculation and Validation: Apply standardized calculation methods for consistency across assets. Use protocols such as those from the EPA or API. Compare results with industry benchmarks to identify outliers. Physical site verification and targeted measurement campaigns can help validate data accuracy.
  • Gap Analysis and Prioritization: Compare your emissions intensity to top performers in your sector or basin. Identify the biggest gaps and prioritize reduction opportunities based on cost-effectiveness and impact. This helps allocate resources efficiently and sets a clear roadmap.

Several free and industry-recognized tools can assist in baseline creation:

Data Required: Facility emission factors
Tool/Framework: EPA Greenhouse Gas Calculator
Purpose: Standardized emission estimates

Data Required: Industry benchmarks
Tool/Framework: IEA Methane Tracker
Purpose: Performance comparison

Data Required: Leak detection protocols
Tool/Framework: EPA LDAR Toolkit
Purpose: Fugitive emissions assessment

Data Required: Flaring and venting data
Tool/Framework: World Bank GGFR Database
Purpose: Quantifying waste gas

Establishing a baseline may seem like a lengthy process, but companies that commit to a timeline often find that working with available data, combined with progressive improvements, delivers significant value and actionable insights.

Focus On Methane Reduction And Energy Efficiency

Methane is a potent greenhouse gas, with a global warming potential approximately 84-87 times greater than carbon dioxide over 20 years. Because of this potency, reducing methane emissions offers the fastest and most effective way to cut climate impact in oil and gas operations.

Moreover, methane leaks and flaring represent a direct loss of product and revenue. Addressing these sources simultaneously improves environmental performance and profitability. With the U.S. Inflation Reduction Act introducing a methane fee starting at $900 per metric ton, controlling methane emissions also avoids substantial financial penalties.

Alongside methane reduction, optimizing energy use is critical. Closed loop AI optimization (AIO) offers a scalable, cost-effective way to improve energy efficiency across complex operations without disrupting production.

Two Complementary Approaches

  • Methane Abatement

This involves identifying and fixing leaks, minimizing flaring and venting, and automating processes to reduce unnecessary emissions. Modern leak detection and repair (LDAR) programs use advanced technologies such as optical gas imaging cameras and fixed methane sensors that provide continuous, real-time monitoring. These systems replace manual inspections and catch leaks early.

Focus areas should include wellhead connections, compressor stations, and storage tanks, which typically account for most fugitive emissions. Automating flare control reduces routine venting, while smarter compressor operation cuts emissions from start-stop cycles.

The financial benefits are immediate. Besides avoiding methane fees, captured gas can be sold, and companies may qualify for tax credits up to $1.5 million per facility under Section 45Q of the Inflation Reduction Act.

  • Energy Optimization Using AI

AI systems continuously monitor and adjust operational parameters such as heat exchanger temperatures, compressor settings, and fuel gas flows, integrating with existing control systems and maintaining operator oversight. AI technologies integrated with control systems in closed loop respond faster than human operators to changing conditions, minimizing energy waste.

Operators see energy consumption reductions in refining and processing units. Since energy costs account for a significant share of operational expenses, the savings often translate into a quick payback on AI investments.

Invest In Scalable Low-Carbon Technologies

Methane reduction and energy efficiency bring immediate improvements. However, the energy transition demands a long-term vision focused on scalable technologies that reduce carbon intensity across the value chain. These investments are essential to maintain competitiveness as carbon pricing tightens and net-zero commitments grow.

The key is balancing risk, capital requirements, and operational fit to build a diverse portfolio of low-carbon assets.

Three Promising Technology Areas

  • Carbon Capture, Utilization, and Storage (CCUS)

CCUS captures CO₂ emissions from point sources such as gas processing plants and refineries and either stores the carbon underground or repurposes it. This technology is commercially viable today, with many projects operating at technology readiness levels (TRL) 7 to 9.

Large-scale hubs demonstrate how multiple emissions sources can be aggregated to reduce costs through economies of scale. Tax credits from the Inflation Reduction Act further improve project economics.

  • Hydrogen (Blue And Green)

Blue hydrogen is produced from natural gas with carbon capture, offering a near-term decarbonization pathway using existing infrastructure. Green hydrogen, made via electrolysis powered by renewables, is less mature but improving quickly as renewable energy costs fall.

Hydrogen is valuable for industrial processes, heavy transport, and as a storage medium for renewable energy. Adoption varies by region, but subsidies and demand growth make it a strategic focus.

  • On-Site Renewables And Power Purchase Agreements (PPAs)

Solar and wind installations at oil and gas facilities can reduce Scope 2 emissions by offsetting grid electricity use. This is especially effective in remote locations or terminals with predictable power demand.

While on-site renewables require capital investment, PPAs offer a way to secure renewable energy without upfront costs.

Using a portfolio synergy scorecard helps evaluate how these technologies complement each other and your existing operations. Factors to consider include ROI, operational integration, risk mitigation, and scalability. Investments that enable future expansion or co-benefits usually provide the highest value.

Turning Commitment Into Action With Imubit

The energy transition isn’t a distant goal. It’s a present-day business imperative. Companies that act early and effectively can reduce emissions, improve margins, and position themselves as leaders in a decarbonizing economy. Establishing a credible emissions baseline, targeting methane and energy efficiency, and investing in scalable low-carbon technologies are essential to staying competitive.

This is where Imubit comes in.

Imubit’s Closed Loop AI Optimization (AIO) technology is purpose-built for the process industries. It delivers real-time, autonomous optimization of energy-intensive operations like distillation, cracking, and reforming, resulting in measurable reductions in fuel use, emissions, and operating costs. The technology integrates seamlessly with your existing control infrastructure, making it easier to optimize emissions and energy performance without disrupting operations.

The path forward is clear: Pairing domain expertise with advanced AI gives you the control and clarity needed to lead the energy transition. Imubit is here to help you turn ambition into action, sustainably and at scale. If you are ready to begin your AI transformation, start with a free AI Optimization (AIO) assessment tailored to your site.