Historical CO 2 Emission Benchmarking on Country Level

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Historical CO 2 Emission Benchmarking on Country Level

The Norwegian Oil and Gas Association engaged Rystad Energy in Autumn 2016 to quantify and benchmark direct carbon dioxide (CO 2) emissions from the oil and gas industry, meaning all the CO 2 emitted during the extraction, processing and combustion of oil and gas products. Most producing countries do not have mandatory emission reporting schemes while some governments and companies publish detailed assessments either for the whole country, the whole company or in a few instances for specific fields. But there is no consistent method across the various sources and sometimes even within the same source. Additionally, independent organizations that track emissions from the oil and gas industry use different methodologies and metrics for quantifying emissions. While these reports are useful for understanding emissions in the covered areas, they do not enable fair comparisons between companies and countries. The aim of this study was to combine the existing emission data from available sources to develop and apply field-specific emission models to establish comparable estimates for all oil and gas fields globally. While any global approach like this comes with constraints, this is a strong starting point for quantifying CO 2 emissions from the oil and gas industry in a consistent manner and provides a useful tool for identifying areas where emissions can be reduced. After collecting all field-, country- and company-level emission data we could get our hands on, we used this to identify drivers for emission rates. This was used to create a dynamic model, predicting field-level emissions where not known. All this was made possible due to our comprehensive field-by-field database, Ucube. This gave us a global picture of emissions from the oil and gas industry per barrel of oil equivalent (boe) produced in 2015 on a field-by-field basis. We split the results by country focusing on the top 20 global producers and ranked them from most CO 2-intensive producers to the least by measuring how many kilograms of CO 2 were emitted per barrel of oil equivalent (kgco 2/boe). We broke this down further by examining the supply chain of resources originating from specific countries. At the end, this allows us to analyze the data to understand why the rankings turned out the way they did. 2 RYSTAD ENERGY AS FJORDALLÉEN 16 0250 OSLO, NORWAY WWW.RYSTADENERGY.COM

Total global greenhouse gas emissions in 2015 were 53 Gt CO 2 whereof 41 Gt CO 2 was related to global CO 2 emissions. The global CO 2 emissions from production and flaring (Upstream), processing (Midstream) and other end use combustion (Downstream) of oil and gas were 19.3 GtCO2 in 2015 which is 47% of total global CO2 emissions for that year. Upstream emissions from oil and gas extraction including flaring accounted for 870 MtCO2 or 5%, midstream emission from refining and processing accounted for 1300 MtCO2 or 6% while downstream and other end use accounted for the main part of 89%, all referring to 2015. Overview of estimated greenhouse gas emissions and sources in 2015 We identified large field-specific variations in emission intensities along the supply chain, implying that the whole supply chain is important to accurately understand the total carbon footprint of specific oil and gas fields. Among the top 20 oil and gas producing countries, Norway and the United States are the two countries with the lowest CO 2 emissions per boe produced, both with low flaring and large shares of gas in their production mixes. Total CO 2 emissions across the supply chain for top 20 oil and gas producers [kg CO 2/boe] Global average upstream emissions amounted to 16 kgco 2/boe, including direct emissions from extraction and flaring. Of this 16 kgco 2/boe, 5 kgco 2/boe on average was due to upstream flaring. Among the top 20 oil and gas producing countries, upstream intensity varied between 7-38 kgco 2/boe, high emitters had higher flaring intensities and/or production dominated by oil sands or heavy oil. Average midstream emissions amounted to 25 kgco 2/boe, including refining and processing. Among the top 20 producers, midstream intensity varied between 14-47 kgco 2/boe, high emitters had large shares of oil sands, heavy oil or LNG exports as part of their supply chain. Average downstream emissions amounted to 355 kgco 2/boe, accounting for emissions from the combustion of end products. Among the top 20 producers, downstream emission intensity varied between 326-399 kgco 2/boe, driven by the share of oil vs. gas production, as well as the quality of crude oil produced. 3 RYSTAD ENERGY AS FJORDALLÉEN 16 0250 OSLO, NORWAY WWW.RYSTADENERGY.COM

The cumulative emissions along all steps of the supply chain for a single barrel of oil equivalent from Norway came to 355 kgco 2. This is the lowest in the world, but by a small margin. The United States in second emitted just two more kgco 2/boe. To note, Norway had the eleventh-highest combined oil and gas production in 2015 while the United States had the highest. To get the barrel of oil out of the ground, Norway emitted 7.9 kg of CO 2. Among its peers, Norway had the third-smallest footprint and outperformed the average (16 kgco 2/boe) by 51%. This is due to a variety of factors, but is helped explicitly by low flaring volumes among producers in Norway. Of the global average of 16 kgco 2/boe, 5 kgco 2/boe comes from flaring. The margins in this segment were quite small with all of the top five producers falling within a two kilogram range of each other. To process and refine end products out of the barrel of oil equivalent, 13.8 kg of CO 2 was released. Among its peers, Norway had the smallest footprint in this segment and outperformed the average (25 kgco 2/boe) by 45%. This is again due to large shares of mid-grade oil and gas, but also because Norway converts little of its gas to liquid natural gas (LNG), a very energy-intensive process. The combustion of the barrel of oil equivalent as end products like gasoline or diesel emitted 334 kgco 2. Among its peers, Norway had the fourth-smallest footprint in this segment due to large shares of mid-grade oil and gas, both of which yield cleaner-burning products than low-grade oil. These results are in part due to factors beyond Norway s control like resource characteristics, but also due to specific regulations by the Norwegian government and by decisions by operators in the country like introducing a carbon price, prohibiting flaring, offshore electrification, focus on energy efficiency and more. These findings and the underlying data is relevant to understand current emissions, but also important when assessing the future of oil and gas in a carbon constrained environment. CO 2 emission intensity is an indicator for how competitive resources are from a carbon perspective, including exposure to any future carbon pricing. 4 RYSTAD ENERGY AS FJORDALLÉEN 16 0250 OSLO, NORWAY WWW.RYSTADENERGY.COM

At Rystad Energy, we have developed a database (UCube) of all oil and gas fields globally. Each field is detailed by our analysts with static parameters like development solution, reservoir parameters (API, sulfur content, reservoir pressure, etc.), location, reservoir depth, etc. and dynamic parameters like what stage of development the field is in, its production over time, how much of its resource reservoir has been extracted, field economics and more. Having this information allows us to make a nuanced analysis of the carbon footprint for individual oil and gas fields all across the world as these factors play a deciding role in how much CO 2 will be emitted from a field. In order to look at our data with an eye for CO 2 emissions, we collected information and data from emissions-tracking sources focusing explicitly on oil and gas to create models that estimate global CO 2 on a field-by-field basis. We focused on the amount of CO 2 emitted directly when extracting and refining a barrel of oil and then how much CO 2 is emitted when that barrel of oil is combusted. It was beyond the scope of the project to pin each step of the process to the country where it occurred (as this information is not readily available). We used the location of extraction to determine the country that CO 2 emissions are allocated to along the entire supply chain. While we provide a metric for downstream emission intensity of the oil and gas industry it is not representative of the emissions from Norway s consumption of oil and gas products. Rather it is a metric for how much CO 2 is emitted when the oil and gas produced in Norway is consumed. This could be as gasoline in a car, fuel for a stove, feedstock for electricity generation, etc., and in our model, can take place anywhere. The same principle applies to our estimates for midstream. Resources could be refined in China, India, the United States or elsewhere. Our aim was to quantify how the oil and gas produced in a specific country contributes to global emissions, and with this perspective it is irrelevant whether a liter of gas is combusted in Norway or in the United States as the effective CO 2 emissions would be the same. In some cases, like facilities with carbon captures systems (CCS) and or NGL consumption as a petrochemical feedstock, the specific location does make a difference to emissions. These instances are reflected in our models. To build up and calibrate our models, we also collected data from a range of sources that focus explicitly on CO 2 emissions. We synthesized this data with the information from UCube so results can be reliably compared to other parts of the world. While dynamic, this also means our estimates use some generalizations. While our models allow us to see detailed pictures like with flaring volumes, it is constrained in some ways. For this project, we focused only on CO 2 emissions. We do not yet include other greenhouse gases, most notably methane. We look at direct emissions along the supply chain, i.e. how much CO 2 was emitted at the place where the activity occurred. This means we do not include the emissions to produce the products consumed or to create the necessary infrastructure along the supply chain. So, we do not include CO 2 footprint of the steel used to create an offshore platform or the cement to create a well. Notably, this also applies to third-party power generation. We do not include emissions from the exploration segment of the upstream industry. We do not include any midstream flaring. We do not include emissions related to the transportation of hydrocarbons from upstream locations to refineries/processing or from refineries/processing to end users because trade flows are fluid and constantly shifting. Without knowing where resources end up and how they get there (boat, pipeline, truck, etc.) we can only create a highly uncertain estimate. We based our estimates on data from 2015. This should be considered a snapshot of a field or country s emission intensity since emission intensity increases as a field enters later stages of development. 5 RYSTAD ENERGY AS FJORDALLÉEN 16 0250 OSLO, NORWAY WWW.RYSTADENERGY.COM

One of the key benefits of our synthesis of data is our ability to pin flaring volumes to individual fields all across the world. Flaring is one key differentiator for how large a country s upstream emissions footprint is. The National Oceanic and Atmospheric Association (NOAA) uses satellites to track flaring globally and maps each flare with GPS coordinates. We matched the coordinates of the flares with the coordinates we have for fields in UCube. This gave us a detailed image of flaring volumes and allowed us to build this information up to compare flaring volumes per field, per company, and ultimately per country. In addition to the NOAA data, we extracted reported data from governments like Norway which report flaring volumes on a field level and from companies that report volumes flared. This enables us to allocate 72% of global flaring to a specific oil and gas fields, while remaining flaring emissions are allocated to fields based on average flaring intensity within each specific basin. There are four main sources that estimate the global CO 2 footprint from the combustion of oil and gas. The figure below illustrates how our results compare to these organization s estimates. CO 2 emissions from combustion of liquids and gas in the period 2000-2014 Gt CO 2 25 20 15 10 5 Global Carbon Project (GCP) IEA Rystad Energy (RE) BP 0 Source: Rystad Energy research and analysis; IEA «CO2 emission from fuel combustion 2016»; BP Statistical Review 2015; Global Carbon Project Our results match fairly well with the Global Carbon Project. The deviation between the IEA s estimate, while significant, is consistent across recorded instances and can in part be understood because the organization subtracts the consumption of fuel not used for combustion from CO 2 totals, e.g. asphalt. We and the Global Carbon Project include these volumes into our calculations. BP s model is based on two conversion factors applied to oil and gas consumption and thus yields a rough estimate of emissions. Among organizations that look at emissions on a more detailed level like the International Association of Oil & Gas Producers (IOGP) and United Nations Framework Convention on Climate Change (UNFCC), there is variation among the various regions and countries. There are discrepancies between our results and these organizations data due to differences in modeling approach, scope and varying coverage of fields worldwide. 6 RYSTAD ENERGY AS FJORDALLÉEN 16 0250 OSLO, NORWAY WWW.RYSTADENERGY.COM

Emissions from the extraction of oil and gas globally amounted to 870 megatons of CO 2 or 5% of CO 2 emission from oil and gas combustion. Upstream CO 2 emission intensity* (kg CO 2/boe) Global average upstream emissions amounted to 16 kgco 2/boe, including direct CO 2 emissions from extraction and flaring. Of this 16 kgco 2/boe, 5 kgco 2/boe on average is due to upstream flaring. Among the top 20 oil and gas producing countries, upstream intensity varied between 7-38 kgco 2/boe, high emitters flared more and/or had production dominated by oil sands or heavy oil. Upstream emission intensity for the top six countries was between 7-9 kgco 2/boe, Saudi Arabia had the lowest emissions, followed by UEA, and Norway in third place with 8 kgco 2/boe. This can be split out by the emissions intensity per resource type. For Norway, upstream emissions from oil fields was 13.5 kgco 2/boe making it fifth in our ranking of top 20 countries. Emissions from gas fields was 2.1 kgco 2/boe, placing it first in our ranking of top 20 countries. *Including flaring Source: Rystad Energy research and analysis Upstream emission intensity of oil and gas fields vary, driven by both natural factors and decision-driven factors. Flaring is the most evident decision-driven factor with large differences among top producers. The grade of the resource is the deciding factor for how much CO 2 a barrel of oil (or gas equivalent) emits as it moves along the supply chain. Lower grade resources take more energy to produce, more energy to refine, and emit more when combusted. Thus the grade of the resource base at each field sets a ceiling on how efficient the process can be. Intertwined with this is the supply source. Some sources of supply have significantly higher emission footprints than others as they exclusively access low-grade resources. A few case examples to illustrate this: Saudi Arabia has the smallest footprint for the upstream segment. They are also the world s third-largest producer, which makes them an interesting case example. The Saudi resource mix is mostly medium-grade crude with some light crude, natural gas and other liquids. Most of the country s production is conventional onshore or in the shelf waters of the Persian Gulf with low emission intensity. Saudi Arabia s resources also have little associated gas (thus little to flare), but perhaps the largest benefit is that they have a huge resource base accessible from single fields. This means they can produce huge amounts from comparatively simple extraction set ups. Thus the country s footprint is small, but production is high. The best contrast here is Canada, which is the fifth-largest producer, but emits five times the CO 2/boe as Saudi Arabia. Flaring volumes are almost the same, but the resource bases are completely different. Just under 30% of Canada s output comes from oil sands which emit the most CO 2 of all extraction 7 RYSTAD ENERGY AS FJORDALLÉEN 16 0250 OSLO, NORWAY WWW.RYSTADENERGY.COM

processes by a large margin. A barrel of crude oil from oil sands in Canada can have an emission footprint from 100 kgco 2/boe to as much as 160 kgco 2/boe. For contrast, the average emissions to extract a barrel of crude oil is 16 kgco 2/boe. These factors are the reason Canada came third from last in our ranking of the top 20 oil and gas producing countries. The point is that factors outside of human control play a major role in deciding how much CO 2 is emitted from oil and gas resources from a country. Upstream emission intensity is also dependent on the maturity of fields. For conventional fields, we observe that upstream CO 2 emissions are relatively stable over time, despite declining production as fields mature. This is driven by greater effort required to extract late-phase barrels, typically resulting in increased need for separation due to high water cut and increased injection activity to maintain reservoir pressure. Hence, as oil and gas fields and basins mature, their upstream emission intensity is expected to increase due to more efforts required per barrel produced. The United Kingdom is a mature offshore oil and gas province with first production in 1968 and declining production since 1999. Other mature offshore provinces include Mexico, Algeria and Indonesia. Upstream CO 2 emissions per barrel for selected fields on the NCS Source: Rystad Energy research and analysis, Norwegian Oil and Gas Association The final natural advantage to note is the pressurization of fields. This mainly applies to gas fields and, relative to resource quality and structure, is not a significant determiner of the emissions from the extraction of oil and gas. However, it is an important item to include as it can make significant differences in the emissions between fields of the same quality and structure. For Norway s part, just 5% of the crude oil produced is low-grade. The rest is midto light-grade. However, all of Norway s fields are offshore and both the basin structure and government policy encourage larger developments. Larger developments emit less CO 2 as power generation can be centralized, which allows for more efficient generators to be used, as well as utilization of associated heat. 8 RYSTAD ENERGY AS FJORDALLÉEN 16 0250 OSLO, NORWAY WWW.RYSTADENERGY.COM

As we ve seen, the resource quality and structure determines a range for possible CO 2 emissions for the upstream industry in a country. Where the number actually falls is determined by independent decisions by governments or companies to establish (or not establish) policies that push extraction activity to be more efficient. The most important is flaring. We discussed earlier how upstream and midstream emissions can be seen as just one part of global emissions from consuming oil and gas products, however flaring is outside of this and represents one instance where the upstream industry contributes directly to global emissions (rather than indirectly by consuming some of the products it helps produce in order to get the oil and gas out of the ground). After resource quality and structure, this is the main factor that determines how much CO 2 the upstream industry in a country will emit. It holds a unique place however as it is also something that companies and countries have direct control over. We benchmarked the top 20 peer group by comparing their flared volumes to their total production. This gives us an emission intensity metric which we can use to compare countries flaring. CO 2 emission intensity from flaring in 2015 Source: Rystad Energy research and analysis, NOAA Norway is among the best in class with one kilogram of CO 2 emitted from flaring per barrel of oil produced in 2015. This is in large part due to tight governmental restrictions on flaring and also supported by well-developed infrastructure for natural gas. This second point is an essential piece to understanding why some countries flare more than others. Nigeria and Angola, for example, come in at the bottom of the list as they have little infrastructure to transport gas from domestic oil fields. Here it is important to note that natural gas is often produced as a byproduct with crude oil. So, even if a company only wants to extract crude oil, they will inevitably receive some gas along with it. It s possible to reinject these volumes back into the ground, but this is expensive. Developing infrastructure to transport and process gas can be even more expensive. 9 RYSTAD ENERGY AS FJORDALLÉEN 16 0250 OSLO, NORWAY WWW.RYSTADENERGY.COM

In countries like Angola and Nigeria companies have three options: pay to reinject the gas or to develop gas infrastructure, flare the excess gas, or don t produce the crude at all. Global upstream flare sites in 2015 Source: National Oceanic and Atmospheric Administration Restrictions on flaring are common among governments to control CO 2 emissions from the oil and gas industry, so Norway is not alone in its focus on reducing flaring volumes. Technically, flaring in Nigeria was outlawed in 1984, but exemptions and low fines impede flaring cuts. Norway leads in its adoption of technologies that reduce carbon emissions. In 2015, nearly 40% of oil and gas production used carbon capture systems, power from shore, or combined cycle gas turbines for power generation in order to cut carbon emissions. It is one of few countries that has electrified fields, but it has applied this technology on a larger scale than any others. Norway uses a greater percentage of electricity on its oil and gas fields than all the other countries in our model combined. 24% of production in Norway gets some part of its power from onshore electricity, including large developments like Troll, Norway s largest gas field. This reduces on site CO 2 emissions from power generation to zero. Around six percent of production in Norway uses carbon capture systems which extract CO 2 from the natural gas produced and store it underground. A little more than eight percent benefits from combined-cycle gas turbines which are more efficient than single-cycle turbines, returning to the earlier point about taking advantage of natural advantages as combined-cycle gas turbines do not make sense on smaller developments. These factors are technological advantages Norway has over other countries solely because the government and domestic industry has prioritized cutting emissions. 10 RYSTAD ENERGY AS FJORDALLÉEN 16 0250 OSLO, NORWAY WWW.RYSTADENERGY.COM

Midstream activities comprise 1,300 Mt CO 2 (6%) of the total emissions from the consumption of oil and gas consumption worldwide. We include emissions from the refining and processing of oil and gas to create end use products like gasoline and diesel. Notably, this also includes LNG liquefaction and regasification but not emissions from the transportation of oil and gas to and from processing facilities. Within the midstream segment, refining and processing is the main source of CO 2 emissions, and as before, how much CO 2 is emitted to produce end products is dictated to a large degree by the quality of extracted resources. If crude oil has a high sulfur content or is low quality, then it will take more energy to refine and thus will emit more CO 2. To account for this, we used the API and sulfur content listed for each field in UCube and fed this data into the midstream models. This resulted in a comparable estimate of how much CO 2 will be emitted when resources are refined scaled by the quality of the resource. Midstream CO 2 emission intensity* (kg CO 2/boe) Also essential to creating an accurate picture of midstream emissions is whether it is gas or crude oil that is being refined. To refine a barrel of bitumen in 2015 for example, 87 kgco 2 would have been emitted. On the other hand, 26 kgco 2 would have been emitted to refine an equivalent of gas. These things are important to consider when looking at midstream emissions as countries that produce more gas will come higher in our rankings than those that produce mostly crude oil. That is, unless the country also exports gas as *Refining and processing Source: Rystad Energy research and analysis LNG. As a general principle, gas is not as practical to transport as a liquid. This brought about the LNG process where natural gas is cooled to -160 degrees Celsius (-260 degrees Fahrenheit) to force it into a liquid so it can be transported easily. In a liquid state, natural gas takes up approximately 1/600th of the space it occupies as a gas. LNG is then regasified on delivery for distribution via pipelines. This is an energy-intensive process adding about 40-50 kgco 2/boe for gas sourced though LNG. About 90% comes from liquefying the gas and about 10% from regasification at the distribution location. This is what makes Qatar, the fifth-largest producer of gas, come in as the one of the largest CO 2 emitters in the midstream segment. About three-fourths of Qatar s gas is converted into LNG which brings its midstream emissions above Canada, which gets a significant percent of its resources from bitumen, and just a kilogram of CO 2 ahead of Venezuela which also has a significant portion of bitumen and heavy oils but also high sulfur content in its crude. Norway emits the least CO 2 in the midstream segment among all countries benefiting from producing little heavy oil and large shares of gas with little conversion to LNG. Of that small amount that is converted, the process is also highly efficient. Snøhvit, the only large scale liquefaction plant in Norway, is the most efficient in our model (which we estimate covers about 90% of all liquefaction plants globally in 2015). 11 RYSTAD ENERGY AS FJORDALLÉEN 16 0250 OSLO, NORWAY WWW.RYSTADENERGY.COM

Overview of CO 2 emissions across LNG liquefaction plants Kg CO 2/boe Source: Rystad Energy research and analysis; EPA; Woodside; Norwegian Environment Agency; Rabeau et al. (2007); Ministry of Energy and Mines, Algeria (2012) The Snøhvit facility which is located in the far north of Norway benefits from the cold weather there and from high-quality feedstock supply from the Snøhvit gas field. It is also a new facility and has some of the most advanced carbon reduction technology, including CCS. All of these things add up to make it the most efficient liquefaction plant in our model, emitting just 28 kgco 2/boe versus the average of about 40-50 kgco 2/boe. 12 RYSTAD ENERGY AS FJORDALLÉEN 16 0250 OSLO, NORWAY WWW.RYSTADENERGY.COM

Our method of measuring downstream emissions assigns CO 2 values based on the share of end products typically produced from a barrel of oil equivalent scaled by the quality of the original resource. A barrel of oil from low-grade crude yields more products that emit more CO 2 when combusted, and this is reflected in our models. We also incorporate the percentage of NGL that is used as a feedstock in the petrochemical industry. Since NGL is not combusted in this end use, it reduces downstream emissions relative to the combustion of NGL. Qatar and United States are the two countries with the lowest downstream emissions per barrel of oil equivalent Qatar has a high share of gas production with a low downstream emission intensity. US downstream emission intensity is low due to a higher share of gas and high share of light liquid products. Norway also has a low downstream emission intensity, driven by a large share of gas and light/medium liquid products. Downstream CO 2 emission intensity* (kg CO 2/boe) 1.1x Source: Rystad Energy research and analysis Venezuela, Angola, Iraq and Brazil have downstream CO 2 emission intensity close to 400 kg CO 2/boe. All these countries have limited gas production. Venezuela has the highest downstream emission intensity with a high share of heavy oil and bitumen. 13 RYSTAD ENERGY AS FJORDALLÉEN 16 0250 OSLO, NORWAY WWW.RYSTADENERGY.COM

Since the emission intensity varies so much depending on resource quality and type, the oil and gas industry could reduce these by its selection of which resources they choose to develop, how they are extracted and refined, and the technology they apply during the process. For example, field-specific data shows the sum of upstream and midstream emissions from oil sands is around 100 kgco 2/boe higher than for shale oil. This implies that for every one million boe/d that is produced from shale production instead of oil sands, annual emissions are reduced by 37 MtCO 2. This is approximately ten times the annual CO 2 that all currently operating CCS systems globally prevent from emitting according to data from the Global CCS institute, when excluding CCS for EOR. It also represents 70% of total CO 2 emission from all sectors in Norway in 2016. Thus, the type of fields developed is an important factor influencing CO 2 emissions. Upstream and midstream emissions from oil and gas production are substantial with 870 MtCO 2 and 1,300 MtCO 2 in 2015. Within upstream emissions, the industry can also reduce emission intensity by favoring certain resource types and qualities, but also through adhering to certain practices. Reducing flaring is the most obvious. Reducing the emissions from flaring from 5 kgco 2/boe (global average) to 1 kgco 2/boe (top performers) would mean about 150 MtCO 2 per year would not enter the atmosphere. In addition to flaring reduction, there are measures to improve energy efficiency and options to introduce low carbon energy solutions along the supply chain. Midstream emissions from refineries and gas processing plants can be reduced by introducing CCS, as they represent large CO 2 emissions point sources. It is also worth mentioning that LNG exporters, from a supply chain perspective, come out poorly in our rankings, mainly due to the energy-intensive liquefaction process. However, this could still be considered as a carbon reduction strategy in regions where gas can replace coal as a less CO 2-intensive energy source. Combustion of oil and gas outside of the oil and gas industry still accounts for about 89% of CO 2 emissions originating from oil and gas (excluding oil and gas upstream and midstream emissions). Thus, the most powerful way of reducing emissions from the oil and gas is still to reduce demand for oil and gas outside the oil and gas industry itself. Every barrel of avoided demand will not only reduce direct emission at the point of consumption, but also reduce the required emissions of producing, refining and transporting this product to end user. 14 RYSTAD ENERGY AS FJORDALLÉEN 16 0250 OSLO, NORWAY WWW.RYSTADENERGY.COM

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