Oil and gas electrification: why the sector’s big shift has a power problem

Frequently asked questions

• How far has electrification progressed across the oil and gas value chain so far?

  Uptake is uneven, with electrification advancing in pockets rather than as a wholesale shift. In midstream oil pipelines, electric motors driving pump stations have been commonplace for decades where grid access is practical, making this one of the most “normalised” applications. Upstream electrification is technically mature but often constrained by location and power access, and survey data from the Permian Basin suggests only a minority of firms are fully electrified, while many have no plans to electrify. Downstream remains the hardest to electrify, and refineries still rely heavily on combustion for high-temperature heat, although electricity demand is expected to rise as partial electrification expands.

• What are the biggest obstacles preventing wider electrification in upstream and offshore operations?

  The dominant barriers are power access, cost and timing. Many upstream assets sit in remote regions where building new grid connections is expensive and slow, with permitting adding further uncertainty. Offshore “power-from-shore” projects require subsea cables and major electrical infrastructure, creating very high upfront capital costs that can be difficult to justify against an asset’s remaining life. Supply chain constraints and competition for grid connection capacity can also delay delivery and inflate costs. Even when operators electrify equipment, emissions may not fall if the electricity is generated on-site by diesel or gas engines, or if the connected grid is carbon intensive. In practice, electrification tends to work best where distance to shore is manageable, power is reliable and multiple installations can share infrastructure.

• Why is electrification of midstream gas compression still limited, despite mature technology?

  Electric motor-driven compression has been commercially available for decades, yet the traditional model of running compressors on the pipeline’s own gas remains operationally convenient. Electrifying compression introduces a new dependency: large, continuous, high-quality electricity supply. That shifts risk from fuel logistics to grid reliability and capacity, and operators worry about resilience if power supply is disrupted. In many regions, the limiting factor is not the compressor technology, but the electrical enabling works required to support it, such as substations, transmission upgrades and new connections. Despite this, the direction of travel is turning as companies seek higher efficiency, lower operating costs and cleaner operations. Eliminating on-site combustion also reduces direct CO₂ emissions and can cut methane leakage risks associated with gas-driven equipment.

• Can electrification deliver decarbonisation if the grid is still fossil-heavy?

  Not automatically. Electrification can improve efficiency, maintenance and process control, but its emissions benefit depends on how the electricity is produced. Electrically driven rigs or compressors may still be supplied by power generated from diesel or gas, simply moving combustion to a generator rather than removing it. Grid-connected electrification reduces Scope 1 emissions at the asset, yet overall carbon reduction depends on the grid’s renewables intensity; with a large share of global electricity still produced from fossil fuels, Scope 2 emissions can remain significant. This is why operators often weigh electrification against the cost of accessing cleaner power, and why some projects stall when capital costs rise. Where grids are reliable and relatively low carbon, electrification can deliver meaningful emissions intensity reductions and support broader net-zero targets.

• Why is downstream electrification so challenging, and what is the most realistic pathway for refineries?

  Refineries need both power and very high-temperature heat for processes such as cracking, reforming and hydrotreating. Several critical processes require temperatures that are difficult to reach economically with electricity today, which limits the feasibility of a fully electric refinery in the near term. Even where electric solutions exist, the scale of power demand is enormous; a typical refinery can resemble a small town’s electricity usage, and grid infrastructure in many regions cannot yet support the necessary high- and medium-voltage capacity. The practical pathway is incremental: wider use of electric motors for pumps and compressors, growing deployment of electric boilers, industrial heat pumps and heaters, and selective pilots for electrified high-temperature furnaces. Many sites are therefore expected to evolve into hybrid operations rather than switching overnight.