Emissions intensity of production expected to
decline further due to continued shift towards newer and more
productive operations in the deepwater, other factors
HOUSTON, July 13,
2023 /PRNewswire/ -- More than three-fourths of all
oil and gas production in the U.S. Gulf
of Mexico has a lower greenhouse gas (GHG) intensity than
the basin-wide average, a new S&P Global Commodity Insights
analysis finds. The analysis is the latest in an ongoing series
that utilizes a new comprehensive model that provides unprecedented
granularity to understand variations in GHG intensity from one
asset to the next.
The average GHG intensity of production in the U.S. Gulf of Mexico was found to be 7 kilograms of
carbon dioxide equivalent per barrel of oil equivalent
(kgCO2e/boe) in 2022. However, about 78% of the total
production was found to be beneath that average. Conversely, assets
on the upper bound of carbon intensity—responsible for just 10
percent of total production—generated 35% of the basin's total GHG
emissions. Overall, individual assets across the basin displayed a
wide variability, ranging in GHG intensity from less than 2
kgCO2e/boe to nearly 50 kgCO2e/boe for most
production. *
"A relative minority of less-productive assets were found to be
responsible for a disproportionate amount of emissions," said
Christopher Kennett, Technical
Research Associate Director, S&P Global Commodity Insights.
"This trend—along with the tendency for there to be a wide
variability in the GHG intensity from any one asset to the
next—underscores the limits of placing too much significance on
overall averages when considering the GHG intensity of any given
asset."
The considerable variation in intensity levels is consistent
with findings for other basins. A previous S&P Global Commodity
Insights analysis of North Sea production found that basin to
have an average intensity of 12 kgCO2e/boe in 2021 with
individual assets ranging from less than 1 kgCO2e/boe to
nearly 150 kgCO2e/boe.
The analyses are derived from a new S&P Global Commodity
Insights capability that provides a novel and comprehensive
approach to estimating upstream oil and gas production emissions.
The new capability, built upon existing proprietary upstream
databases and emerging sources such as reported emissions and
satellite flaring data from the Earth Observation Group, makes it
possible to estimate the totality of an upstream oil and gas play's
emissions and emissions intensity—from across the play, down to
individual assets and the sources of emissions, such as the fuels,
that underpin each operation.
Several factors ultimately influence the GHG intensity of an
asset. These include productivity, where younger and more
productive fields tend to be less GHG intensive than older, more
geologically challenging fields. The latter also may require
energy-intensive enhanced recovery techniques, increased drilling
to maintain productivity, and older technology can also put upward
pressure on emissions intensity. Other factors include the degree
to which operations can be electrified and the amount of venting
and flaring that occurs.
In the case of the U.S. Gulf of
Mexico, key disparities were observed between production
coming from the deepwater compared to more shallow shelf terrains.
Shelf production was found to have a GHG intensity that was more
than twice as high, on average, as deepwater on account of shelf
production tending to come from more mature, and thus less
productive, wells as well as processes that utilize more venting.
Deepwater production—which constituted 86% of all production in the
U.S. Gulf of Mexico in 2022—tends
to come from newer wells that utilize more technologically advanced
techniques.
"The share of production in the U.S. Gulf of Mexico coming from deepwater has
increased by approximately 14% over the past decade," said Tomos
Phillips, Senior Technical Research Analyst, S&P Global
Commodity Insights. "That expansion of newer, and thus more
productive operations that leverage the latest technology has
decreased the region's emissions intensity by 25% from 2012 to 2022
and we expect the basin's emissions profile to remain steady in the
near term as more production shifts from the shelf to
deepwater."
A heightened focus on decarbonization may contribute to
additional declines in GHG intensity for the basin in the coming
decades. Additional declines could occur from deployment of carbon
capture utilization and storage technology as well as expanded use
of renewable power—such as offshore wind turbines—to provide less
carbon-intensive fuel sources for production in the region, the
analysis says.
* The 2 kgCO2e/boe to nearly 50 kgCO2e/boe range includes
99% total 2022 production covered by the US Gulf of Mexico
analysis. The full range, including outliers, extends up to c. 900
kgCO2e/boe. For comparison, the GHG intensity range for 99% total
2021 production across the North Sea study area extends to c. 70
kgCO2e/boe.
Media Contacts:
S&P Global: Jeff Marn
+1-202-463-8213, jeff.marn@spglobal.com
S&P Global Commodity Insights, Global/EMEA: Paul Sandell +
44 (0)7816 180039, paul.sandell@spglobal.com
Americas: Kathleen Tanzy + 1
917-331-4607, kathleen.tanzy@spglobal.com
Asia: Melissa Tan
+ 65-6597-6241, melissa.tan@spglobal.com
About S&P Global Commodity Insights
At S&P
Global Commodity Insights, our complete view of global energy and
commodity markets enables our customers to make decisions with
conviction and create long-term, sustainable value.
We're a trusted connector that brings together thought leaders,
market participants, governments, and regulators and we create
solutions that lead to progress. Vital to navigating commodity
markets, our coverage includes oil and gas, power, chemicals,
metals, agriculture, shipping and energy transition.
Platts® products and services, including the most
significant benchmark price assessments in the physical commodity
markets, are offered through S&P Global Commodity
Insights.
S&P Global Commodity Insights is a division of S&P
Global (NYSE: SPGI). S&P Global is the world's foremost
provider of credit ratings, benchmarks, analytics and workflow
solutions in the global capital, commodity and automotive markets.
With every one of our offerings, we help many of the world's
leading organizations navigate the economic landscape so they can
plan for tomorrow, today. For more information visit
https://www.spglobal.com/commodityinsights.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/more-than-75-percent-of-oil-and-gas-production-in-the-us-gulf-of-mexico-has-lower-than-average-greenhouse-gas-intensity-new-analysis-finds-301876036.html
SOURCE S&P Global Commodity Insights