A new study from the American Petroleum Institute shows that the ongoing voluntary private investment by the U.S. oil and natural gas industry is actually leading the way when it comes to reducing carbon emissions.

The study, completed by T2 and Associates, calculates the U.S. oil and gas industry has invested $90 billion on emission control technologies from 2000 to 2014, a $9 billion (10 percent) increase since the last such study was released in 2013. Add in industry’s $127.6 billion investment in shale development – a process that has provided record supplies of clean-burning natural gas, particularly to power plants – and the total investment in greenhouse gas mitigating technologies comes to $217.5 billion.

The latter figure makes the U.S. oil and gas industry the No. 1 investor in carbon emission reduction technology, more than doubling the investment of the federal government ($110.3 billion), while accounting for more than 50 percent of the total $431.6 billion investment of nationwide.

The study also highlights the fact that investment by the oil and gas industry continues to extend throughout the energy economy.  That includes billions of dollars of investment in renewable energy, once again demonstrating the underreported harmony between natural gas development and renewables. The oil and gas industry invested a total of $3.5 billion in renewable technology in 2013 and 2014, accounting for a significant chunk of both total renewable investments across all sectors and overall investments by the oil and gas industry. From the report:

“Publicly announced non-hydrocarbon investment by the U.S. based oil and gas industry in the North American market is estimated at just more than $14.9 billion over the 2000-2014 period, or about 7 percent of the oil and natural gas industry’s investments. This represents 17 percent of the total industry and Federal government investments of approximately $87.6 billion in this technology class. The oil and gas industry’s top publicly announced non-hydrocarbon investments continue to be in wind, biofuels, solar, geothermal, and landfill digester gas…” (p. 9)

This overall financial commitment has helped industry reduce carbon emissions by 55.5 million metric tons between 2013 and 2014, which is the equivalent of taking 11.8 million cars and light trucks off the road. From the report:

“From 2000 through 2014, the overall carbon dioxide intensity of the U.S. economy—measured as metric tons carbon dioxide equivalent (MTCO2e) emitted per million dollars of gross domestic product  (GDP) —  improved  by  more  than  18  percent  or  1.4  percent per  year  overall…  Oil and gas industry investments over the last decade in GHG mitigating technologies have contributed to this improving trend.”  (p. 29)

Of course, continued investment in shale development is a huge contributor to reduction of carbon emissions. Natural gas recently became the No. 1 source of U.S. electricity and, not coincidently, power sector carbon emissions have dropped to a 27-year low.

The report notes that industry’s $128.6 billion investment in shale gas – which is part of the report’s fuel substitution category – makes shale gas the top emission mitigating technology, accounting for 30 percent of total investments. The U.S.-based oil and gas industry invested approximately 86 percent of the fuel substitution category (50.8 percent of the category total without shale gas), with significant investments in liquefied natural gas in early years before dramatic shifts to shale gas in later years.

Furthermore, the report states, 41 percent of emission reductions from 2008-2014 can be attributed to fuel substitution category, which also includes projects such as installation of improved plunger lift seals and lower emission well completion technology that have cut methane emissions.

This financial commitment from industry is the reasons carbon emissions have fallen at the same time shale gas production has skyrocketed.

Though there are other factors that have contributed to recent GHS emission reductions, the report supports the opinions of several experts regarding natural gas’ significant role in carbon emissions, including:

• EPA Administrator Gina McCarthy: “Hydrofracking has certainly changed the energy dynamic considerably. You are absolutely right, it has created an opportunity for a shift…into natural gas, and that shift has been enormously beneficial from a clean air perspective, as well as from a climate perspective.” [emphasis added]
• Intergovernmental Panel on Climate Change (IPCC): “A key development since AR4 is the rapid deployment of hydraulic fracturing and horizontal drilling technologies, which has increased and diversified the gas supply… this is an important reason for a reduction of GHG emissions in the United States.”
• Secretary of Energy Ernest Moniz has said: “About half of that progress we have made [on greenhouse gas emissions] is from the natural-gas boom.”
• Energy Information Administration (EIA): “There are two basic factors that have contributed to lower carbon intensity (CO2/kilowatthour [kWh]) in the electric power sector: 1) substitution of the less-carbon-intensive natural gas…and 2) growth in non-carbon generation, especially renewables such as wind and solar.”

The EIA also estimates that, with continued improved efficiency of energy use and a shift away from the most carbon-intensive fuels, U.S. energy-related carbon dioxide (CO2) emissions will remain below the 2005 level, even through 2040.

Investments by the oil and gas industry – and the abundance of clean burning affordable energy that comes from development – has led to fewer greenhouse gas emissions; has caused air pollution to plummet; and has spurred one of the few bright spots in the economy in recent years.  That’s a win-win situation that should be celebrated.