A Review of Decarbonization Pathways in Oil and Gas: CCS, Hydrogen, and Digital Optimization
Abstract
The oil and gas sector is responsible for approximately 5.1 Gt CO2eq of direct operational emissions annually, representing roughly 15% of global energy-related greenhouse gas emissions, yet faces an accelerating mandate to decarbonize while sustaining global energy supply. This paper presents a systematic review of 218 peer-reviewed and institutional sources published between 2013 and 2024 to evaluate the technical readiness, economic viability, and integration potential of three principal decarbonization pathways: carbon capture and storage (CCS), hydrogen technologies, and digital optimization. CCS sub-technologies are assessed across the full value chain, from post-combustion amine scrubbing (TRL 9, $40–80/tonne CO2) to direct air capture (TRL 5, $250–600/tonne CO2), with global project capacity estimated at 439 Mtpa across 628 active projects as of 2024. Hydrogen production routes are evaluated from grey steam methane reforming ($0.8–2.0/kgH2) through blue hydrogen with CCS ($1.2–3.0/kgH2) to green electrolytic hydrogen ($2.0–7.0/kgH2), with cost trajectories suggesting grid parity in high-irradiance regions by the mid-2030s. Digital optimization, encompassing AI-driven production management, digital twins, and satellite-based methane monitoring, is assessed as the most immediately deployable pathway, with IEA estimates suggesting 15–20% upstream emissions reductions achievable by 2030 at payback periods of one to three years. Integrated strategies combining all three pathways within industrial cluster frameworks are shown to achieve 40–55% sectoral emissions reductions at 30–40% lower cost than single-pathway approaches. Key barriers to deployment include high capital costs and long payback periods for CCS and hydrogen projects, fragmented regulatory frameworks across jurisdictions, IT-OT integration challenges in legacy operational environments, and the disproportionately limited access to decarbonization capital in developing economies. This review concludes that no single pathway is sufficient and that coordinated action across technology development, carbon pricing policy, multilateral financing, and shared infrastructure investment is required to place the oil and gas sector on a credible net-zero trajectory.