The petroleum industry represents possibly the largest potential swing in sustainability metrics, simply because it is such a large producer of greenhouse gases, from the production side, where extraction methods and transportation are carbon-intensive processes, to the large energy investment in the refinement process, to the end result where each gallon of transportation fuel represents carbon emissions to the tune of 20 pounds of carbon dioxide.
The petroleum industry brings some huge advantages in the fight to improve sustainability. For one thing, the petroleum industry is a worldwide juggernaut, with extraction programs, teams of engineers, and transportation, refining, and delivery infrastructure all established.
Another factor, demand is high and sustained for petroleum-based products. While the concerns about sustainability may eventually have an impact, petroleum market share is still enormous.
Using Smart Contracts to Reduce Carbon Intensity
While the petroleum industry may generate substantial greenhouse gas emissions, it also can invest in substantial research in advanced renewable fuels to help create solutions that will begin to turn the tide of carbon emissions and climate change. As the research yields results and programs can be implemented to reduce the carbon intensity of each step of petroleum production along the way, the documentation of sustainability can be set up through smart contracts using distributed ledger technology backed by blockchain, making an immutable record.
As the industry stands to gain substantial amounts of goodwill (and additional market value) by investing in sustainability initiatives that can be tracked this way as well, and contribute. Such programs generally follow a two-pronged approach of corporate social responsibility and environmental stewardship. They frequently take the form of investment and charitable giving to support projects and convervation groups with the mission to protect wild lands and flora and fauna species, and also investing in projects that improve food security, focus on water quality, and support underprivileged groups in other socially conscious missions.
The cumulative result of these programs can create an additional stream of real value in the market, where sustainability can be tracked, documented, and certified, and in that, we see great potential.