Counting own goals: High-level assessment of the economic relationship between the ICT and the Oil and Gas sectors and its environmental implications

2026-04-29

AI Summary

This study addresses the long-overlooked indirect carbon emissions generated by the information and communications technology (ICT) sector’s support for the digitalization of high-carbon oil and gas (O&G) industries, thereby challenging prevailing underestimations of the environmental paradox inherent in green technologies. Integrating input-output and macroeconomic data from 2000 to 2022, this work systematically uncovers the previously neglected economic and technological coupling between ICT and O&G sectors and introduces the concept of “self-defeating decarbonization” to describe how digital technologies inadvertently reinforce fossil fuel activities. By developing a classification framework for O&G digitalization activities and an associated embodied emissions assessment methodology, the study finds that approximately 2% of annual ICT expenditures flow into O&G—a figure that in 2022 exceeded combined investments in renewable and nuclear energy by more than fourfold—thus establishing a methodological foundation for quantifying the hidden carbon costs of digital technologies.

Abstract

The ICT sector has been one of the most successful and fastest-growing industry in history. While the environmental issue in this sector has mainly been addressed by assessing its footprint and, to a lesser extent, its avoided emissions or net impacts, the additional emissions from the digitalization of carbon-intensive activities, such as the Oil and Gas (O&G) sector, have rarely been discussed. By doing so, we have forgotten to count the own goals conceded over more than 20 years in the troubled relationship between the ICT and the O&G sector. Using input-output analysis and economic data ranging from 2000 to 2022, we observe that on average 2% of the annual financial flows from the ICT sector are directed towards the Oil and Gas sector. Considering the significant growth of the ICT sector during this time, O&G companies now spends a massive amount on ICT products in absolute terms. It also appears that in 2022, for each dollar going from the ICT sector to the renewable and nuclear energy industry, more than $4 go to the O&G industry. In addition, we also provide a classification of digital activities in the O&G sector to facilitate environmental assessments and present two case studies estimating potential added emissions from the digitalization of oil activities. Finally, looking at the immense growth in generative AI, we provide an exploration of causal links between the current success of GPU technology and its intricate early relationship with the O&G sector. This article lays the groundwork for defining the nature of the relationship between ICT and O&G, which predates the current hype surrounding generative AI. We provide the analytical elements needed to begin estimating the added emissions from the digitalisation of O&G.

Problem

• ICT
• Oil and Gas
• digitalization
• carbon emissions
• environmental impact

Innovation

• ICT-O&G nexus
• digitalization emissions
• input-output analysis
• energy sector financing
• generative AI environmental impact