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The energy industry is changing fast. More people and businesses want cleaner and more sustainable energy to fight climate change. Countries are setting rules to cut pollution, and investors are putting money into green energy projects. This push is making oil and gas companies look for ways to reduce their impact on the environment.
Fossil fuels make up around 81.5% of the world’s total energy supply, according to the International Energy Agency (IEA). Many industries, such as transportation and manufacturing, still depend on oil and gas.
However, these industries are under pressure to cut emissions, and oil and gas companies must adapt. Some are shifting toward natural gas, which burns 50% cleaner than coal. Others are investing in technologies that reduce emissions while maintaining production.
How Oil and Gas Companies Are Becoming Greener
The renewable energy market was worth $1.21 trillion in 2023 and is expected to grow by 17.2% each year until 2030, according to Grand View Research. While renewables like wind and solar are growing, oil and gas companies are also finding ways to be more sustainable.
Some major oil and gas companies are working on reducing their carbon emissions. They are using new technologies, improving efficiency, and investing in cleaner energy sources. Here are some examples:
- ExxonMobil is investing in carbon capture and storage (CCS) technology to trap carbon before it reaches the air. It has pledged to invest $17 billion in lower-carbon initiatives by 2027 and is also exploring hydrogen energy, which can be a cleaner fuel.
- Chevron is funding projects on hydrogen energy and carbon capture to lower its emissions. It plans to cut methane emissions by 50% by 2028 and is improving energy efficiency at production sites.
- Occidental Petroleum (Oxy) is using direct air capture (DAC) technology to pull carbon dioxide from the air. It aims to capture and store up to 1 million metric tons of CO2 per year through its DAC facility in Texas.
- BP (British Petroleum) is working to cut emissions by 40% by 2030 and investing $5 billion annually in low-carbon energy projects like wind, biofuels, and sustainable aviation fuel.
These companies are proving that oil and gas can still play a role in energy while reducing their environmental impact. They are finding ways to lower emissions without completely stopping oil and gas production. Another company is making waves in the quest for sustainable energy. Let’s find out how.
Prairie’s Efforts in Sustainable Energy
Prairie Operating Co. (NASDAQ: PROP) is actively pursuing sustainability efforts in its oil and gas operations, with a focus on reducing emissions and implementing innovative technologies.
Prairie works to reduce methane emissions, use water more efficiently, and invest in cleaner technologies. It follows strict safety rules and uses advanced methods to drill in ways that limit harm to the environment. The company is also looking into carbon capture and storage to cut emissions and help the industry go greener.
Prairie is also working to increase efficiency in its operations. By using digital monitoring tools, it can detect gas leaks, improve fuel use, and reduce waste. This not only lowers costs but also reduces pollution. The company is exploring partnerships with technology providers to further improve sustainability efforts.
The company has taken significant steps to enhance its environmental performance and produce sustainable energy:
Electrified Operations: Prairie is actively working towards fully electrified operations throughout its production process:
- Electric Frac Fleet: The company has partnered with ProFrac Holding Corp. to implement an electric frac fleet for operations in Colorado. This includes:
- 25 advanced 3000 HHP Single E-Pumps for fully electrified hydraulic fracturing and pump-down operations
- Electric Blender units, hydration systems, and chemical additive units powered by 100% natural gas
- State-of-the-art turbine generators, including two Solar – SMT130 Mobile Gas Turbines, each capable of generating 16.5 MWe ISO
- Shelduck South Development: Prairie has implemented electrified drilling and completion technologies at its eight-well Shelduck South pad in the DJ Basin.
Emissions Reduction: The company is dedicated to upholding Colorado’s stringent emissions standards:
- The Solar – SMT 130 Mobile Gas Turbines are expected to significantly reduce emissions across key metrics and stay below the Air Quality Control Commission’s stated NOx targets.
- Prairie is using Precision’s E-rig 461, powered by natural gas generators with battery backup, demonstrating its commitment to reducing environmental impact.
Efficient Infrastructure: The company is focusing on minimizing its development footprint while maximizing infrastructure efficiencies. This includes:
- Developing up to 42 three-mile lateral wells using a single, fully electrified production facility in their Genesis II OGDP
- Implementing three-phase takeaway for produced oil, gas, and water
Sustainable Development: Prairie places sustainable development at the heart of its projects and operations. The company is dedicated to developing affordable, reliable energy to meet growing demand while protecting the environment.
These efforts demonstrate Prairie Operating Co.’s commitment to reducing its environmental impact while maintaining operational efficiency in the oil and gas sector.
Why Sustainability Matters in Oil and Gas
The oil and gas industry is one of the largest sources of greenhouse gas (GHG) emissions. In 2023, the sector was responsible for nearly 15% of global energy-related CO2 emissions, according to the IEA. In the same year, coal accounted for roughly 35.5% of global electricity production, while natural gas contributed about 23%.
Methane emissions from oil and gas operations also remain a major concern, contributing to 30% of global warming since pre-industrial times. The oil and gas industry emitted around 120 million metric tons of methane in 2023 alone, according to the Global Methane Tracker.
To address this, companies are scaling up efforts in carbon capture, methane leak detection, and renewable energy integration to lower their environmental impact. Governments worldwide are also pushing for stricter regulations, aiming for a 40% reduction in methane emissions by 2030 to align with global climate goals.
Thus, there is growing pressure on oil and gas companies to reduce emissions. Investors, regulators, and customers are all looking for businesses that prioritize sustainability. Companies that fail to adopt green strategies could face financial and reputational risks.
On the other hand, companies that focus on sustainability can benefit. By improving efficiency, reducing waste, and investing in cleaner technologies, they can lower costs and attract environmentally conscious investors. Many governments are also offering incentives for companies that invest in carbon reduction programs.
Can Oil and Gas Be Sustainable?
Even though renewables are growing, oil and gas are still needed. The key is making them cleaner. Companies are adopting new strategies to produce energy while lowering their environmental impact. Here’s how major companies are making energy production more sustainable:
- Carbon Capture and Storage (CCS): This technology traps carbon before it reaches the air, reducing pollution. Many oil and gas companies are building CCS facilities to store carbon underground. The global CCS market is projected to reach over $5 billion by 2030.
- Lower Methane Emissions: Methane is a strong greenhouse gas. Companies are using leak detection systems and better equipment to stop it from escaping. The U.S. Environmental Protection Agency (EPA) is introducing stricter rules to cut methane leaks from oil and gas operations by 80%.
- Better Water Use: Extracting oil and gas uses a lot of water. Companies are improving recycling processes to reuse water instead of wasting it. Some firms, like Shell, have reduced freshwater use by 60% at specific production sites.
- Cleaner Equipment: Many companies are switching to electric or hybrid-powered drilling rigs. These use less fuel and create fewer emissions. The oil and gas industry is expected to invest over $20 billion in electrification projects by 2030.
- Mixing in Renewables: Some oil and gas companies are using wind or solar power at their sites. This helps reduce reliance on fossil fuels for operations. For example, TotalEnergies has installed solar panels at multiple refinery locations to cut emissions.
Governments are also playing a role in making oil and gas more sustainable. Many countries have introduced carbon taxes or incentives for companies to cut emissions. The European Union’s carbon price reached a record high of €100 per metric ton of CO2 in 2023, pushing companies to invest in cleaner technologies.
Prairie’s Future Vision
Prairie is working to stay ahead in the changing energy industry. It wants to reduce emissions, improve efficiency, and find greener ways to operate. The company is committed to staying competitive while also being environmentally responsible.
The future of energy is not just about switching to renewables. It’s also about making the oil and gas industry cleaner and more responsible. Prairie Operating Co. is showing that it is possible to produce energy in a sustainable way that protects the planet.
As the industry moves forward, Prairie is committed to delivering energy safely, efficiently, and responsibly. It proves that sustainability and energy production can go hand in hand.
- READ MORE: The “Northern Lights” Shines: Shell, Equinor, and TotalEnergies JV Powers the Norway CCS Project
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The accounting differences that decide whether your nature investment shows up in inventory, in BVCM, or nowhere at all.
The question reaches a procurement team about three weeks before the next sustainability committee meeting. Someone has read about insetting. Someone else has just signed off on an offset purchase. The CSO wants to know if the two are interchangeable. The answer is no, and the GHG Protocol Land Sector and Removals Standard is the reason why.
This article walks through what each term means at audit-grade specificity, what the standards actually say about how each gets counted, and how to decide which tool fits which target. The insetting vs offsetting question is one of the most-searched in corporate climate strategy, and one of the most poorly answered. By the end of this piece, you should be able to brief a committee on the difference without notes.
The two definitions, in plain English
Offsetting means buying carbon credits generated outside your value chain and retiring them against your residual emissions. The reduction happens somewhere else, financed by you, and the credit is the receipt.
Insetting means investing in emission reductions or removals inside your own value chain, typically with suppliers, where the reduction is directly linked to the products and services you buy. The reduction happens inside the boundary of your Scope 3 inventory, and the accounting treatment is fundamentally different.
The shorthand from the University of Oxford’s Nature-based Insetting Initiative is useful: insetting is what you do with the supply chain you have; offsetting is what you do with the supply chain you do not have.
What the GHG Protocol Land Sector Standard actually says
The GHG Protocol Land Sector and Removals Standard, finalised in 2024 after a multi-year pilot, sets the rules for how land-based emission reductions and removals enter corporate inventories. The Standard distinguishes between inventory accounting (Scope 1, 2, and 3) and project or intervention accounting (a separate methodology for crediting).
For insetting, the practical implication is that supplier-level interventions, when properly measured and attributed, can reduce your Scope 3 category 1 (purchased goods and services) emissions in your inventory. The reduction is not a credit retired against the inventory; it is a lower inventory number, period.
For offsetting, the credit is retired separately. It can be reported as a contribution toward a net-zero claim under the SBTi Beyond Value Chain Mitigation framework or as part of a VCMI Carbon Integrity claim, but it does not lower the inventory number.
A practical consequence: if your Science Based Target requires a 50% absolute reduction in Scope 3 emissions by 2030, insetting moves you toward the target. Offsetting does not. This single point of difference reshapes the procurement decision.
When insetting counts toward Scope 3 (and when it does not)
Insetting counts toward Scope 3 only when several conditions are met:
- The intervention must occur with an entity in your value chain.
- The emissions reduction or removal must be measured against a defensible baseline.
- The reduction must be attributed to your share of that supplier’s output, not double-counted with other buyers.
- It must follow the inventory accounting rules in the GHG Protocol Land Sector Standard, not the project accounting rules used to generate credits.
The most common failure mode is double counting. If your supplier sells the same reduction as a credit on the voluntary market and also reports it to you as a Scope 3 reduction, the math breaks. The Standard requires you to address this risk, typically by purchasing and retiring the supplier-issued credit as part of your inventory or by contractual provisions that prevent the supplier from selling the reduction twice.
When insetting does not count toward Scope 3: when the intervention sits with a supplier you do not buy from, when the baseline is not defensible, when the attribution is unclear, or when the documentation does not survive audit. Those cases default to Beyond Value Chain Mitigation, which is still useful but operates on a different ledger.
The procurement and supplier engagement question
Insetting is harder than offsetting. That is the unfashionable truth most buyers eventually confront. Offsetting is a transaction; insetting is a relationship.
To run an insetting program, you need supplier mapping precise enough to know which farms or facilities sit at which Scope 3 boundary. You need an engagement model that gets suppliers to participate, which usually requires multi-year commitments and shared economics. You need an MRV architecture that measures the right things and produces audit-ready documentation. And you need a contractual structure that prevents double counting and protects both sides.
The trade-off you receive in return is significant. Reductions count against your inventory rather than your residual. Supplier relationships deepen, which protects sourcing continuity. Yield and quality improvements often follow regenerative interventions, which reduces your input cost over time. And the regulatory file, under CSRD, CSDDD, EUDR, and the SBTi FLAG Guidance, is materially stronger.
Choosing the right tool for the right target
A practical decision rule. If your target is a science-based Scope 3 reduction and you operate in a FLAG sector or source FLAG commodities, insetting is the structurally correct tool. If your target is a net-zero claim that includes neutralising hard-to-abate residual emissions outside your value chain, BVCM via high-integrity offsets is the structurally correct tool. Most companies with material Scope 3 exposure need both, in different proportions, sequenced over time.
The sequencing matters. Insetting takes longer to stand up but produces a permanent reduction in the inventory. Offsetting can be transacted faster but does not change the inventory and now sits under tighter claim restrictions. Treat them as complementary tools with different jobs, not as substitutes. The Accountability Framework Initiative and the IUCN Global Standard for Nature-based Solutions both provide useful guardrails for the insetting side, with biodiversity, human rights, and benefit-sharing requirements that go beyond carbon math.
If you are mapping a Scope 3 reduction roadmap and need to scope which interventions count toward your inventory versus which sit in Beyond Value Chain Mitigation, the carbon and sustainability experts at Carbon Credit Capital can help you structure a nature-based supply chain investment program that fits your FLAG exposure, your target architecture, and your audit horizon. Schedule a consultation.
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