Environmental Report 2023

6. Greenhouse gas emissions and other emissions to the air

Emissions to the air from the oil and gas industry consist primarily of CO₂, NO_x, SO_x, CH₄ and nmVOC mainly from various types of combustion equipment. Emissions to the air are usually calculated according to the quantities of fuel gas and diesel oil used on the installations. The emission factors are based on measurements from suppliers, standard factors produced by industry or field-specific measurements and calculations.

Reducing emissions to the air to a minimum has been a key objective for both the industry and the government since the oil and gas industry first began in Norway over fifty years ago. This is significant from both an environmental and a financial perspective. It has also been a pillar of Norwegian petroleum management ever since “the ten oil commandments” were established in 1971. Several of the gases emitted are defined as greenhouse gases (GHG), and it is the reduction of these gases specifically in order to protect the climate which now dominates the debate.

6.1.1 The climate road map for the NCS

The Norwegian oil and gas industry launched ambitious climate objectives in January 2020, pledging to reduce emissions to almost zero by 2050 along with its KonKraft partners. KonKraft has adopted the goal of 50% absolute emissions reduction in 2030 with reference to the Norwegian Parliament resolution to make temporary changes to the petroleum tax law in 2020. The climate strategy of Konkraft also includes ambitious goals to build up new value chains for low and zero-emission technologies such as offshore wind, blue hydrogen, and CO₂ capture and storage on the NCS. In addition, the Norwegian oil and gas industry will collaborate with shipping companies and rig owners to ensure that the vessels used for offshore maritime operations contribute actively towards the government´s goal for a 50% emissions reduction by 2030 in domestic sea transport and fishing. KonKraft prepares annual status reports measuring progression towards the climate targets. This year´s status report was available in June 2023.

The primary sources of emissions to the air from the oil and gas industry are:

Combustion of fuel gas in turbines, engines and boilers
Combustion of diesel in turbines, engines and boilers
Gas flaring
Combustion of oil and gas for well testing and well maintenance

Other sources of emissions to the air are:

Gas venting, minor leaks, and fugitive emissions
Evaporation from storage and loading of crude oil offshore

Power generation using natural gas and diesel oil as fuel is the main source of CO₂ and NO_X emissions. Their level is primarily determined by the energy consumption on the installations and by the energy efficiency of the power generation. The second-largest source of these emission types is gas flaring. The use of flaring is limited on the NCS pursuant to the provisions of the Petroleum Act but is permitted during operations for safety reasons and in connection with certain operational problems.

Fifty per cent of methane emissions (CH₄) from offshore oil and gas installations come directly from production processes, such as from compressors and from the handling of produced water. For volatile organic compounds not containing methane (nmVOC), the primary offshore sources are crude oil loading and storage. Emissions of nmVOC occur, for instance, when gaseous air is displaced by crude oil during the loading of crude tankers.

Emissions of SO_x are derived primarily from the combustion of sulphur-containing natural gas and diesel. As Norwegian gas contains little sulphur, diesel oil is the primary source of SO_x emissions. Low-sulphur diesel is used to minimize these emissions.

Fig. 19 illustrates emissions to the air on the NCS compared with the international average per barrel of produced oil equivalent. All figures are from 2021, since the international figures for 2022 are not available as per June 2023.

Fig. 19: Emissions to the air on the NCS compared with the international average

6.2 Greenhouse gas emissions

Global warming is one of the greatest challenges of our time and extensive reductions in anthropogenic GHG emissions are critical. Through the Paris Agreement, the member countries have committed to reducing GHG emissions by ensuring that the average rise in global temperatures is kept to well below 2°C compared to pre-industrial levels and to further strive to contain this increase to 1.5°C.

As a part of the Paris Agreement, Norway has committed to reducing its GHG emissions by 55% by 2030, compared with 1990 levels. This will be achieved in collaboration with the EU through already signed bilateral agreements for sectors both inside and outside of the EU´s ETS (Emissions Trading System). For the sector inside of the ETS, of which the petroleum industry is a part, the EU ETS is the most important measure.

The Norwegian government intensified climate goals as defined by the Hurdal governmental platform, calling for a 55% reduction in GHG gases by 2030, compared to 1990. This commitment applies to the entire economy, including the sector subject to the EU ETS. In June 2021, the Solberg government presented the White Paper “Energi til Arbeid” (“Energy to Work”), relating to long-term value creation from Norwegian energy resources. The Norwegian Parliament has requested that the petroleum industry reduces its GHG emissions on the NCS by at least 50% before 2030. This is supported by the temporary changes to the petroleum tax system.

In order to encourage further reductions of GHG emissions in the petroleum sector, the Norwegian Parliament passed a “Climate Plan” in Spring 2021, proposing inter alia a CO₂ tax increase on emissions from oil and gas operations subject to the ETS in line with the tax increase on those emissions outside of the ETS, meaning that the total carbon cost (CO₂ tax + quota cost) in 2030 equates to roughly NOK 2,000 per ton of CO₂ (estimated in 2020 currency). The Climate Plan further stipulates that the total carbon cost should not exceed NOK 2,000 from 2021 to 2030.

GREENHOUSE GAS EMISSIONS FROM THE NCS

Emissions to air from Norwegian oil and gas production are reported by several sources. However, both the numbers reported and the development trends from year to year can vary significantly depending on the source. There are several reasons for this, the main one being differing definitions of which activities are included in the Norwegian oil and gas industry.
The Offshore Norge Environmental Report is published annually at the beginning of June and contains all emissions data from the industry. Which emissions to include are based on the definitions in the Petroleum Tax Act. These cover all exploration and production activities on the NCS, including emissions associated with pipeline transport of oil and gas, even if these may occur at land-based plants such as Kårstø and Kollnes. All activities at Melkøya are also included. The data is collected from the Collabor8 Footprint database, which has been developed to simplify both the reporting of emissions figures and the submission of annual emissions reports from the operators to the government.
Statistics Norway (SSB) publishes preliminary figures for the entire industry in May, followed by emissions broken down by various sources in oil and gas production in December. The figures are reported to the UN under the United Nations Framework Convention on Climate Change (UNFCCC) and the Convention on Long-Range Transboundary Air Pollution (CLRTAP). The emissions figures differ from those reported via Footprint to the NEA by including more land-based activities. The inclusion of the Kårstø plant is an example of this. The emissions figures from the SSB will consequently normally be higher than the corresponding Footprint figures, whilst the figures from the majority of sources will generally be comparable. The SSB figures also form the basis for the Miljøstatus.no website.
The NEA has its own database for Norwegian emissions, (norskeutslipp.no), which is accessible to the public and contains emissions data from all Norwegian sources, including oil and gas production. These are generally the same data as those found in Footprint. The top-level category, “Offshore Petroleum Operations”, does not, however, include land-based installations nor exploration activities. Totals for the industry will therefore be lower than the corresponding figures reported in the Environmental Report and by the SSB.
In addition, emissions figures come from those operations on the NCS subject to the ETS and from the portion of oil and gas production liable to CO₂ taxes. These categories are defined differently both from each other and in relation to the three sources described above, and their figures will therefore vary not only in total but also from different sources.

Through the European Green Deal, the EU has committed to an emissions reduction of at least 55% by 2030, as well as to being climate-neutral by 2050. The EU´s Green Deal and “Fit-for-55” package will lead to changes in laws and regulations enabling these climate goals to be reached. In addition, the EU launched several measures through RePowerEU in March 2022 to become independent of Russian gas due to the war in Ukraine. These measures are designed to reduce Russian gas imports whilst safeguarding the current climate objectives.

Greenhouse gas emissions from petroleum operations

Fig. 20 illustrates that total GHG emissions from the NCS and land-based installations subject to the Petroleum Tax Act stood at 11.6 million tons of CO₂ equivalent in 2022, which is the same as the 2021 figure. Emissions remained stable in spite of the 2022 Melkøya re-start. Many fields reduced their emissions associated with energy production and flaring in 2022, whilst emissions due to flaring from existing fields on the NCS showed a slight increase in 2022 due to the re-start of Melkøya. Methane emissions also showed a slight decrease from 2021 to 2022.

In Norway, all oil and gas companies are required to report their emissions in accordance with stringent and detailed regulatory requirements. This is not the case in many other oil-producing countries.

The data in Fig. 21 has been collated from the annual report published by the International Organization for Oil and Gas Producers (IOGP). The international figures for 2022 are not available as per June 2023. This report presents its figures on a regional, not national, level. Other studies including those carried out by Rystad Energy confirm this picture.

Fig. 20: Emissions of CO₂ equivalent on the NCS

Fig. 21: GHG emissions per unit produced in various petroleum provinces, 2003 – 2021

(Source: IOGP)

CO₂ emissions

In 2022, direct CO₂ emissions from operations on the NCS and onshore installations subject to the Petroleum Tax Law stood at 11.2 million tons, which equates to the 2021 level.

Fig. 22: Historical development of direct CO₂ emissions (millions of tons and distribution according to source)

Fig. 23: Volumes of flared gas per produced ton o. e. on the NCS compared to international average

Fig. 23 illustrates the historical development of flared gas volumes per produced unit of oil equivalent in Norway compared to the international average (IOGP) from 2006 to 2021. International figures for 2022 are not available as per June 2023. Low emissions from flaring are a primary reason for significantly lower CO₂emissions from the NCS than from other countries. In 2021 volumes of flare gas were ten times higher globally than in Norway. Whilst it may appear from Fig. 23 that no developments took place between 2006 and 2022, flare gas volumes in Norway during this period dropped by 58%. During the same period, the reported volumes of global flare gas dropped by 60%.

Fig. 24 shows the historical development of direct CO₂ emissions from the three primary sources, where flaring has been the smallest of the three since 2019.

Total Norwegian GHG emissions in 2022 stood at 48.9 million tons CO₂e, according to SSB, with petroleum industry operations accounting for approximately 25% of the total.

Fig. 24: Historical development of direct CO₂ emissions (in tons) from the three primary sources

Fig. 25: Specific CO₂ emissions

Norwegian oil production has been world-leading for many years in terms of low GHG emissions. The average emission per produced unit is less than half of the global average. The sector is subject to several measures such as CO₂ tax, EU ETS, NOx tax/fund, flaring restrictions in production licenses, emissions permits with conditions covering energy management, and the use of best available technology (BAT). There is also a requirement to consider onshore power in new developments. Along with a robust resource and recovery policy, these regulatory measures have triggered and will continue to trigger reduced emissions on the NCS.

Prolonged and increased production on existing fields will normally lead to increased energy consumption per produced unit. It is therefore particularly noteworthy that the NCS has succeeded in maintaining low emissions per produced unit whilst significantly increasing oil production.

The result is a Norwegian offshore industry at the top of the international ladder in terms of low CO₂ emissions per produced unit (see Fig. 24). At the same time, we note that certain other countries are beginning to show improvements in emissions by implementing practices like those on the NCS, such as reduced flaring. This is an extremely positive development. Reduced flaring not only lowers CO₂ emissions but also boosts energy supplies for the market, since the gas can be consumed rather than flared.

Short-lived climate forcers

Short-lived climate forcers are comprised of gases and particles which have a short lifespan in the atmosphere, and which are characterized by their negative effects on climate and health. Reducing these emissions will therefore provide both climate and health benefits. In the offshore oil industry, methane (CH₄) and nmVOC emissions from cold venting and diffuse emissions are the primary short-lived climate forcers. Due to the increased focus on these emissions, it has been necessary to update and acquire further knowledge on the various sources of direct methane and nmVOC emissions.

Short-lived climate forcer emissions released from production on the NCS are already low by international standards. Results from a joint project with the NEA showed that the emissions factors applied to date on the NCS have been conservative, and that the actual emissions are lower than previously estimated.

Methane emissions

The primary sources of methane emissions from offshore oil and gas production are 1) planned or unplanned emissions to direct air, 2) incomplete combustion in flares and turbines, and 3) emissions associated with the storage and loading of crude oil. Annual methane emissions are reported pursuant to the methods and emissions factors determined jointly by the NEA and the industry. The oil industry works continuously to improve the methods and emissions factors used for methane and nmVOC. The use of equipment for the direct measurement of methane emissions plays an important role in improving the quality of the reporting methods. A separate leak detection program (Leak Detection and Repair, LDAR), is used to detect leaks from process equipment, involving the use of hand-held infrared cameras. The use of cameras (Optical Gas Imaging) enables measures to be implemented swiftly to reduce/eliminate any emissions associated with minor leaks.

Fig. 26 illustrates methane emissions (CH₄) from activities on the NCS in 2022, broken down by source. Total methane emissions in 2022 stood at 13, 152 tons, compared to 14, 682 tons in 2021. This reduction has been achieved in spite of increased gas production. Compared to 2014, this is a reduction of over 50%. The significant reduction from 2014/2015 to 2016 is mainly due to a far more detailed follow-up of the individual sources and a revision of the emissions factors.

Methane emissions associated with gas exports to Europe

Natural gas produced on the NCS is exported primarily to Europe for domestic consumption, for industrial use and for gas-fired power stations. Natural gas is composed mainly of methane, which is an extremely potent greenhouse gas.

Since CO₂ emissions from gas-fired power stations are approximately 50% lower than those from coal-fired power stations per produced power unit, a switch from coal-fired to gas-fired electricity generation would be a sound climate measure. To do this, the industry first needs to ensure that methane emissions from production and from the gas pipeline system out to the consumer are not so high that they outweigh the advantages. Methane concentration on the NCS in 2022 measured 0.02% (emissions per unit of gas sold), which is approximately 1/10 of the global average for upstream oil and gas production. This shows that Norwegian natural gas has a clear advantage over coal from a climate perspective.

The reasons for the low methane concentration in Norwegian natural gas are, inter alia, subsea gas pipelines, a ban on routine flaring, and high tax levels, as well as a keen focus in minimizing gas leaks for climate and safety reasons.

Fig. 26: Historical development of total emissions of CH₄ (in tons) and distribution by source

Fig. 27: Historical development of total nmVOC emissions (in tons) and distribution by source

6.3 Emissions of nmVOC

In 2022, total nmVOC emissions from the NCS stood at 26, 543 tons. This is a decrease compared to 2021, when they totalled 28, 233 tons, as illustrated in Fig. 27.

Since 2001, total nmVOC emissions have been reduced by almost 90%. This has been achieved by investing in new facilities for the removal and recovery of oil vapor on storage ships and shuttle tankers. In recent years, the collaboration between the NEA and the industry on methane and nmVOC emissions has also resulted in significant reductions.

6.4 Emissions of NOx

The primary source of NOx emissions on the NCS is from the burning of natural gas and diesel for energy generation on the installations. The diesel-fueled engines on mobile rigs are also a significant source. The mobile rigs are used for both exploration drilling and production drilling.

The environmental agreement on NOx regulates the commitments made to the government by Norway´s industry associations on reducing their overall NOx emissions. Norway met its NOx obligations in the Gothenburg Protocol well before 2020. Efforts to reduce NOx emissions through the NOx fund have been crucial in terms of reaching this goal. The NOx fund gives investment grants to those companies which implement measures to reduce their NOx emissions. The money from the fund is paid out once the measure has been implemented and documented.

NOx emissions have been significantly reduced thanks to the NOx fund initiative. The NOx agreement for 2018 – 2025 was approved by the ESA in 2018, and has now been extended until 2027.

Total NOx emissions from the petroleum industry in 2022 stood at 37, 311 tons, down from 39, 872 tons in 2021. The decrease is due to a general reduction in combustion.

Fig. 28 illustrates NOx emissions from NCS operations and breakdown by source in 2022, whilst Fig. 29 illustrates specific NOx emissions.

Fig 28: Historical development of total NOx emissions (in tons) and breakdown by source

Fig. 29: Specific NOx emissions

6.5 SOx emissions

Fig. 30 shows SOx emissions from operations on the NCS and the break-down of the emissions in 2022 according to source. Total SOx emissions for 2022 stood at 513 tons, down from 522 tons in 2021.

Fig. 30: Historical SOx emissions from the NCS, broken down according to source