The Permian Basin is among the most prolific and active oil fields in the world. In 2024, across the three core plays -- the Bone Springs, the Wolfcamp Delaware and the Wolfcamp Midland -- over 12,000 new wells were drilled and nearly 160,000 active wells produced almost 3.4 billion barrels of oil equivalent, based on S&P Global Energy data. Measured against oil-producing countries, the Permian would rank as the world's third-largest source of supply, after Saudi Arabia and Russia.

Absolute emissions have grown with activity, while greenhouse gas intensity -- which S&P Global Energy defines as total GHG on a carbon dioxide equivalent basis divided by total production on barrels of oil equivalent -- declined. This profile is indicative of the proving up and subsequent rapid growth of unconventional horizontal multistage fracking activity, which unlocked most of the current production.

In the early years of the unconventional revolution, companies were focused on making it all work: from determining the sweet spots, to identifying the best drilling and completion techniques, to developing and deploying new technologies. As operators discovered the right formula, productivity rose, costs fell, investment increased and production increased. Higher productivity led to declining GHG intensity, but increased activity led to greater absolute emissions.

In 2024, S&P Global Energy analysts estimate the three core Permian plays emitted about 117 million metric tons of CO2 equivalent, which includes methane, while producing nearly 11 million boe/day.

S&P Global Energy estimates the average GHG intensity of upstream Permian production to be 22 kilograms CO2e per barrel of oil equivalent produced. This is equivalent to 3.8 grams CO2e/MJ.

Understanding Permian's emissions performance

The Permian demonstrates a long-term trend of GHG intensity reductions and, in more recent years, absolute emissions reductions -- even as production has grown. In the earlier years of unconventional development, GHG intensity reductions -- from 2009 to 2011 -- were due to productivity improvements. Operators were able to increase production or productivity for similar levels of absolute emissions. In more recent years, as more reliable methane emissions observation data has become available to S&P Global Energy, methane abatement has become the leading driver of emissions intensity reductions. The level of methane abatement being observed is so significant, it is leading to absolute emissions reductions even as production has continued to grow. Absolute emissions were down nearly 25 million mtCO2e compared to 2022, while production was 500,000 boe/day higher, according to S&P Global Energy CERA.

For the estimates shown, S&P Global Energy does not simply tally regulatory data. Instead, emissions are estimated on a per-well, per-month basis by applying proprietary algorithms and subject matter expertise to S&P Global Energy CERA's detailed well and production data.

The data includes both carbon dioxide and methane emissions.

Carbon dioxide emissions are related principally to combustion of fuels, to power production and processing operations, and they generally correlate positively with output and equipment counts. More barrels and more kit mean greater CO2 emissions.

Methane emissions matter enormously in thinking about emissions in the Permian, accounting for approximately two-thirds of total emissions when normalized to carbon dioxide equivalency assuming 100 years of 28 metric tons of CO2 per ton of methane. Using a 20-year conversion factor of 86 increases the GHG intensity of the Permian to 44 kgCO2e/boe or 8 gCO2e/MJ, according to S&P Global Energy.

The break in the time series in the chart above, between 2021 and 2022, is critical to understanding what is happening in emissions management, and it relates directly to methane emissions estimates. Prior to 2021, S&P Global Energy methane emissions estimates, like many others, were based on fixed methane emission factors. In 2022, S&P Global Energy gained access to higher-quality observational data from our partnership with Insight M, an overflight methane observation company. These observed data confirmed what a series of academic papers had argued for years: factor estimates, which form the basis of the historical record, understate methane emissions.

This resulted in the strong upward revision in S&P Global Energy's assessment of Permian methane (and total) emissions in 2022. However, it also dramatically improved the Permian estimate's performance on S&P Global Energy's Data Quality Metric, which measures the reliability of an emissions estimate. Perhaps most importantly, the observed data established a credible baseline against which to measure emissions mitigation.

Since 2022, as the industry also adopted overflight and other observation technologies, the basin has been able to cut methane intensity in half, as discussed in the report "Cleaning Up: Overflight data show Permian methane emissions intensity down further 28% in 2024".

The variation in carbon intensity is as dynamic as the play itself, because carbon intensity is a metric of emissions divided by output. In the Permian, as in many other plays, the best wells can be many multiples more productive than older more depleted wells.

In total, the carbon intensity of the Permian ranged from over 160 kgCO2e/boe (28 gCO2e/MJ) to under 4 kgCO2e/boe (0.69 gCO2e/MJ) in 2024 -- the upper and lower range based upon the 90th and 10th percentiles, respectively, according to S&P Global Energy.

This implies that although the average can be instructive, the performance of individual assets or companies can and does vary dramatically.

Depending on the measurement technology used, results for methane intensity can vary significantly. Observational overflight data from Insight M showed methane intensity of the Permian decreased 24% from 2023 to 2024. In contrast, Tropomi Sentinel 5p satellite data showed a decrease in Permian methane intensity of only 6% during the same period.

Improvements in technology are providing greater insights into understanding emissions and enabling companies to obtain more actionable data. Access to this data is driving performance changes and material emission reductions.

Like many companies, S&P Global Energy's ability to quantify methane data, in particular, is improving but there are still challenges to resolve -- such as the reconciliation of different observational data.