Could AI Increase Fossil Fuel Emissions in APAC Oil and Gas?

The burgeoning use of artificial intelligence within Asia-Pacific oil and gas industries could paradoxically heighten fossil fuel emissions, despite operators' efforts to curb them. AI's increasing integration into these operations, however, is ostensibly aimed at enhancing efficiency and productivity. New research indicates that these gains could potentially outweigh some of AI's environmental benefits in the realm of cleaner energy.

The study, published in npj Climate Action, analyzed 64 scenarios and projected a net annual increase of 0.47 billion to 1.8 billion metric tons of carbon dioxide when AI-driven improvements were applied to both fossil fuels and renewable energy sectors.

This research delves into what the authors term "enabled emissions" — additional greenhouse gas emissions that may arise when AI-driven reductions in costs or productivity boosts in fossil fuel extraction, processing, and energy production. Already, APAC energy firms are ramping up AI deployment in upstream operations. Malaysia's PETRONAS Carigali announced plans to expand its TriCipta AI initiative with IBM and Tridiagonal.AI, focusing on surface-equipment optimization and production/maintenance decisions.

Similarly, Australia's Woodside is employing its Maint Intel system to analyze maintenance records and equipment performance, thus reducing maintenance intervals.

While these instances do not explicitly indicate an increase in emissions, they illustrate the type of productivity improvements that the global study examined. AI's electricity consumption also contributes to its emissions footprint. The International Energy Agency predicts that global data-center electricity consumption will nearly double from 485 TWh in 2025 to 950 TWh in 2030.

The growing presence of AI data centers, such as the planned 360 MW Nvidia-powered facility in Indonesia, underscores the rapid expansion of this technology in the region. The IEA estimates that fossil fuel operations in South and Southeast Asia emitted around 13 million metric tons of methane in 2025, with over 60% originating from coal and the rest from oil and gas.

More than 60% of these methane emissions could be cut with existing technology at no net cost to producers. However, under current policies, emissions are expected to decline by only 10% by 2030 and 20% by 2035. Similarly, China faces a significant disparity, with over 90% of its methane reduction potential in the oil and gas sector achievable at no net cost, according to the IEA.

The research underscores the importance of tracking both production and emissions KPIs separately, ensuring that efficiency gains are not mistaken for climate benefits without a genuine reduction in emissions.