The energy world is rapidly changing. The pressure to address climate change, ensure reliable energy supplies, and manage costs is greater than ever.
During this shift, the oil and gas industry, one of the world’s biggest emitters of greenhouse gases, has an opportunity to take the lead in transforming energy use. With its global resources and expertise, the sector could become a key player in making the energy transition sustainable and efficient.
From a wider view, a new study from the World Economic Forum found that cutting energy use by 31% could save trillions of dollars each year while significantly reducing environmental harm.
Oil and gas companies, given their scale and impact, are well-positioned to take advantage of this opportunity, but it will require innovations both big and small along with incremental changes in day‑to-day operations.
One of the most effective ways to reduce energy demand is to focus on energy efficiency. This may mean implementing energy management systems across facilities to drive significant reductions in energy use.
Chevron, for example, has saved millions of dollars by introducing energy management systems in its refineries that optimize energy consumption and reduce greenhouse gas emissions. Such systems provide real-time data that allow companies to make informed decisions that save energy and cost and could similarly be applied to a variety of upstream facilities in the field.
Technology advancements such as this one are crucial, but smaller changes can also have a big impact. For instance, reducing business travel in favor of virtual meetings can help companies reduce carbon emissions and operational costs.
Digitalization and AI: The Future of Oil and Gas
Digitalization and artificial intelligence (AI) are already found throughout the oil and gas value chain and offer new ways to optimize operations and reduce energy consumption.
AI can be used for predictive maintenance to help companies reduce downtime, extend machinery life, and eliminate unnecessary repairs.
In addition, companies such as Shell are leveraging AI to monitor equipment in real time. Adopters claim the advanced software is preventing breakdowns and reducing the need for on-site maintenance, reducing the knock-on effect of increasing energy use from inefficient operations.
Advanced monitoring and automation also allow for more tasks to be performed remotely, reducing the need for travel to isolated or offshore locations. The adoption of such solutions results in measurable energy savings, and for large-scale operations, even small operational shifts are quickly translated into meaningful gains.
The Role of Hybrid Work in Sustainability
The shift toward hybrid work is one of the most significant, yet often overlooked, incremental changes.
The COVID-19 pandemic demonstrated that many oil and gas workers could operate remotely without sacrificing productivity. Some companies, such as BP and Shell, have adopted hybrid work models where employees split time between the office and home.
This approach reduces the need for commuting and cuts the energy demands of running large office spaces at full capacity. Companies can significantly lower their energy consumption and emissions with this hybrid model, which maximizes in-office time while allowing the convenience of remote work on predetermined days.
With a staggered in-office schedule, hybrid work decreases occupancy and, by extension, reduces the cost and environmental impact of on-site heating, cooling, and lighting needs. When implemented thoughtfully, hybrid work models can contribute to a broader strategy of reducing overall corporate energy demand.
Additionally, better energy management in everyday operations—such as switching to energy-efficient lighting, reducing machinery idle times, and improving building insulation—can also lead to large energy savings.
While these might seem like small actions, the impact is profound when scaled across an entire organization. For instance, integrating hybrid HVAC systems in office spaces or transitioning fleets to electric vehicles can all contribute to reducing the sector’s overall environmental footprint.
Reducing business travel is one of the simplest, yet most effective, ways to cut energy use in the oil and gas sector. The pandemic highlighted how many meetings and collaborative efforts can be handled remotely without sacrificing productivity. As companies adopt remote work policies and use video conferencing for routine meetings, the sector can significantly lower its travel-related emissions.
Revolutionizing Chemical Processes
Oil and gas production is also tied to the chemicals industry, which consumes a large share of global energy. Incremental changes in refining and chemical processes can create substantial energy savings.
For example, optimizing steam-cracking processes or implementing catalytic methods that consume less energy can significantly reduce overall consumption. Chemical giant Dow is using such a technology which it reports has driven energy efficiency up by 20%.
In a broader sense, energy management throughout the supply chain—from production to refining—can be optimized through small adjustments, such as reducing energy waste in transport and refining steps. This holistic approach, focusing on continuous improvements rather than one-time innovations, can lead to dramatic long-term reductions in energy demand.
Collaborating Within Energy Clusters
Energy clusters, which bring together oil companies, renewable-energy firms, universities, and tech innovators, are key drivers of change.
These regional hubs allow for sharing best practices, new technologies, and incremental improvements that can scale across the industry.
Nii Ahele Nunno is a mergers and acquisitions manager with PricewaterhouseCoopers in Houston where he advises clients on all aspects of deals including acquisitions, divestitures, separations, joint ventures, financial planning and analysis, and business and operational improvements. Prior to this role he was an associate with the Energy Core Operations group at KPMG International where he developed business strategies working all along the energy value chain. Before joining KPMG, Nunno held various positions at National Oilwell Varco in the Wellbore Technology Division. He started his oilfield career in 2012, designing and qualifying electronics on projects for high-shock, high-pressure, and high-temperature downhole tool applications. Nunno’s primary focus and expertise are in downhole drilling tools for closed-loop automation. He holds a BS degree in electronic engineering from Minnesota State University and an MBA degree from Duke University with a concentration in energy finance. In his free time, Nunno organizes science fairs for middle school students in low-income areas in Houston and serves on many nonprofit boards.