How can the oil and gas industry accelerate efforts to curb fugitive emissions at source?

However, identifying measurable ways to meet their sustainability commitments has often proven challenging. In an era where investors, regulators, customers and employees expect businesses to minimise their contribution to global warming and maximise their corporate and social responsibility, hydrocarbon producers face one of the toughest tasks. While the transition to green-energy based economies will take time, our current dependency on fossil fuel energy and feedstock (and the associated environmental harm from production and usage) means the industry has a huge responsibility to minimise its environmental impact. Addressing fugitive emissions offers a practical, achievable step toward fulfilling this duty of care. Fugitive emissions are the unintentional escape of gases and hydrocarbons, particularly volatile organic compounds (VOCs), during the extraction and processing of oil and gas products. These leaks, which commonly occur at valve and pipe flange seals, pose multiple risks to the environment. Many of these emissions have high global warming potential (GWP), while others are toxic, posing a threat to employees and local communities, and risking company reputations and investor valuations.

Most oil and gas-related CO2 emissions fall under Scope 3¹ – the indirect emissions resulting from fossil fuel consumption. Downstream, efforts to mitigate these emissions have largely focused on improving the efficiency of fuel usage. But is this enough?

Global economies will continue to be reliant on affordable hydrocarbons for energy and industrial production for decades to come². So, while operators are switching to more sustainable solutions, they must take whatever actions they can to minimise their environmental impact now.

Delaying action risks accelerating climate change and environmental degradation. It also risks regulatory penalties and reputational damage as public and investor scrutiny intensifies.

Reducing emissions at the source presents a real opportunity for operators to improve their sustainability credentials and their commitment to responsible corporate behaviour.

For years, fugitive emissions have been an underappreciated and potentially under-reported aspect of the oil and gas sector’s environmental impact. While producers were aware they existed, accurately quantifying their impact was challenging. The percentage of lost product was often seen as negligible compared to overall plant throughput.

However, recent studies suggest that the extent of these emissions is far greater than previously recognised – and by focusing on the components most prone to leakage, the issue becomes more manageable. Data from a field study of four refinery sites and six processing units in China found that nonflanged connectors, flanges, valves and open-ended lines accounted for over 99% of fugitive emissions.

Crucially, the research revealed that the leakage from just 0.2–0.4% of these components were responsible for 91.8% of all fugitive VOCs emitted, with valves, flanges and open-ended lines responsible for the largest share of leakages. Despite comprising a comparatively low proportion of total components, valves alone accounted for 43% of leaked VOCs in the study. In contrast, non-flanged connectors represented a higher proportion of total components, but emitted far fewer VOCs.

This data highlights a significant opportunity to reduce leaking emissions through better maintenance and repair practices, notably on valves. In fact, addressing just the most problematic components could reduce VOC emissions by up to 57%.³

The aforementioned Chinese study also found that over 70% of “repaired” leaking valves and flanges subsequently required secondary repair due to failure. This was typically due to either an inadequacy of the initial repair or a more fundamental root cause.

This points to the need for a more holistic approach to leakage management and prevention – one that includes adjustments to operating procedures, repairs, replacement of components with highsealing alternatives and effective fugitive emission certified packing. The latest generation of fugitive emission packing designs are maintenance free and provide greater reliability and control of leaks.

Beyond the environmental benefits, reducing fugitive emissions makes good business sense. While profitability plays a role, the real value lies in the reputational gains for companies willing to act responsibly. Fortunately, frameworks exist to guide such efforts. The United States Environmental Protection Agency (EPA) have established best practices for detecting and addressing leaks though their Leak Detection and Repair (LDAR) programs. International standards such as ISO 15848:2015 (parts one and two) also provide regulations for fugitive emission testing of industrial stem valves.⁴ However, there is no obligation to adhere to these environmental protocols. It is easy to see why many oil and gas operators view the initial costs of implementing these as a barrier.

Reducing fugitive emissions is at best, break-even over a 10-year period. For example, in the Chinese study, a refinery processing 5 million tons of crude oil annually invested around $800,000 to implement a LDAR programe, resulting in a reduction of 92.53 tons of VOC emissions and savings of approximately $55,000 in the first year. Additional investments in the following years continued to yield environmental and financial benefits, highlighting the long-term economic viability of such initiatives.

But it is important to remember that the true value of these efforts extends beyond the balance sheet. Many of the fugitive emissions from oil and gas extraction, processing and transportation are highly toxic. By cutting these emissions, companies can reduce the health and safety risks to employees and local communities, not to mention their impact on the environment.

Being recognised as a responsible corporate citizen delivers much greater value, through increased stock valuation, reduced risk of future liabilities and increased brand equity. These sustainability initiatives – delivered through tangible corporate social responsibility programmes – offer far greater value and long-term returns on investment.

Methane has a GWP up to 30 times greater than CO26, making it a critical target for emission reduction efforts. While its atmospheric lifetime is shorter than that of CO2, methane’s ability to trap heat in the atmosphere makes it a key contributor to near-term climate change.

In addition to VOCs, methane is one of the most concerning fugitive emissions from oil and gas operations. Research from the Royal Society of Chemistry on UK offshore oil and gas facilities found that 26.2% (76 Gg out of 289 Gg total emissions per year) of fugitive methane escaped from leaking valves. In comparison, 38.7% emissions were from venting, 25.6% from flaring, 0.3% from offshore oil (diffuse emissions) and 8.9% from pipeline losses.⁵

A study by the United Nations Environment Programme suggests that cutting methane emissions by 45% this decade could prevent 0.3 °C of global warming by 2040.⁶ Given methane’s prevalence in oil extraction and its high GWP, the industry has a unique opportunity to make a significant impact on global climate efforts through LDAR and other emission-reduction strategies.

The oil and gas industry will continue to play a pivotal role in global energy production for decades to come, but there is an urgent need for producers to curb emissions. Fugitive emissions represent a quantifiable and manageable aspect of this responsibility. By focusing on addressing leaking valves, flanges and other components prone to continuous low-level leakage, operators can proactively reduce environmental harm, improve health and safety, and enhance their corporate reputation.

The evidence is clear – investing in the prevention and reduction of fugitive emissions is environmentally, ethically and economically sound. As we head towards net zero, the oil and gas industry should prioritize this opportunity to act responsibly, showing that it is focused not just on short-term profits, but on the long-term dividends that come from reducing its impact on the planet and its people.

¹ McKinsey & Company (2024). What are Scope 1, 2, and 3 emissions?

² International Energy Agency (2023). World Energy Outlook 2023

³ Ke, J., Li, S. and Zhao, D. (2020). The application of leak detection and repair program in VOCs control in China’s petroleum refineries. Journal of the Air & Waste Management Association, 70(9): 862–875.

⁴ Environment Agency (2024). Fugitive Emission Strategy 2022: Regulated Industry.

⁵ Riddick, S. and Mauzerall. D. (2023). Royal Society of Chemistry. Likely substantial underestimation of reported methane emissions from United Kingdom upstream oil and gas activities. Energy & Environmental Science, 16: 295–304.

⁶ United Nations Environment Programme (2021). Global Methane Assessment: Benefits and Costs of Mitigating Methane Emissions.