Presented by:

E&P logo

Editor's note: This column appears in the new E&P newsletter. Subscribe to the E&P newsletter here.

The world can address greenhouse gas (GHG) in different ways. The direct way is by reducing fossil fuel production—the main source at 73% of global GHG. Europe is following this approach, perhaps because their companies don't have the enormous success of a shale revolution to maintain.  

In Europe, companies and countries are diversifying into renewables:

  • Denmark, leading the world in wind power, recently stopped exploration for oil and gas, and it plans to close its oil production by 2050. 
  • Norway has a vibrant oil and gas industry, most of it exported along with a high carbon footprint. But Equinor is developing offshore wind systems, even partnering with the U.K.’s bp to supply electricity to New York City. They also lead the world in uptake of electric vehicles (EVs), now at 60% of new sales, due to national policy incentives like VAT and carbon tax reductions for EVs. 
  • bp has committed to be 40% invested in renewables by 2030, and it is studying plans for a large blue hydrogen plant at Teesside in the U.K. 
  • In France, Total has invested $8 billion in renewables since 2016, including $2.5 billion in Adani Green Energy, where it shares a 50% partnership in the company's solar power systems. 
  • In Germany, Shell will provide 10 MW of green hydrogen by year-end 2021. In Ireland, they will be a 51% stakeholder in a 300-MW wind farm. 

It’s clear the European continent is teeming with examples of integrating renewables into their future. But in the U.S., companies have adopted different approaches.

One indirect way for reducing GHG is by companies greening their own operations—using wind or solar electricity to pump frac jobs, for instance. But this is only a very minor contribution to reducing the 73%. 

A less direct way to reduce GHG is by cleaning up methane leaks from wells, pipelines and processing facilities. To repeal rules installed last September, the U.S. Senate passed a new bill at end of June to remove methane leaks as a cause of air pollution in oil and gas operations and allow the EPA to enact stricter methane regulations. However, methane emissions are only 10% of all GHG emissions in the U.S., and less than half are due to methane leaks. So if the cleanup gets it down to zero, this is a drop of only 5% of the total 73% fossil fuel contribution.

Carbon capture and storage 

Exxon Mobil is storing 9 million metric tons of CO2 each year, equal to 11 million car exhausts each year. The company plans to invest $3 billion for 20 new carbon capture and storage (CCS) facilities. The company envisages a $100 billion consortium of oil and gas entities and government to capture then bury GHG under the Gulf of Mexico. Bury in CCS means to inject CO2 deep underground where it is contained by non-leaking rock layers, and eventually merges chemically with the rock. 

However, CCS is a non-direct approach because it doesn’t stop the emission of GHG from fossil fuels. It just captures and buries the resulting GHG. But CCS will be important for the net-zero concept because it’s an escape hatch to get rid of any leftover fossil GHG. 


It’s clear that companies in the U.S. seem to be avoiding the direct approach of cutting oil and gas production by diversifying into renewables, while the EU is clearly leading in this.

The appetite of legacy U.S. energy companies has largely stayed focused on what has always been their main meal: oil and gas production, including the shale revolution. 

In the U.S., what may change this is the demand for oil and gas will fall if the Biden administration achieves its goals of greening electricity and changing to EVs. If supply follows demand, oil and gas could fall by 30% from 2020 to 2035-2040.  

Any of dozens of oil and gas companies thriving in the Delaware Basin of southeast New Mexico could stop drilling new wells and instead invest in wind/solar systems right in the windy Chihuahuan desert. There is money to do it; the basin made roughly $24 billion/year at the wellhead in 2019 and makes even more now in 2021. The January 2021 federal moratorium on new oil and gas well leases on federal lands provides an opportunity and motivation to do it. 

Ian Palmer
Ian Palmer

About the author:

A petroleum engineer and consultant, Ian Palmer PhD has worked at Los Alamos, The Department of Energy, bp and Higgs-Palmer Technologies. He is a contributor at and the author of The Shale Controversy.