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Infrastructure buildout may drive oil and gas sector's greenhouse gas growth

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Infrastructure buildout may drive oil and gas sector's greenhouse gas growth

The buildout of oil and gas infrastructure along the U.S. Gulf Coast may add 541 million tons of CO2-equivalent greenhouse gas emissions annually by 2030, a Jan. 14 study from the University of Texas at Austin concluded, with more than two-thirds of that growth coming downstream of oil and gas producers.

The authors of the report, "Emissions in the stream: estimating the greenhouse gas impacts of an oil and gas boom," tracked oil and gas projects in Texas and Louisiana and aggregated the emissions each of those projects would bring when they start operating. The authors' estimate is equivalent to more than 8% of total U.S. greenhouse gas emissions in 2017 and is "roughly equivalent to the emissions of 131 coal-fired power plants."

"Researchers have largely focused on upstream emissions such as fugitive methane … associated with new U.S. production," the authors wrote. "Our findings reveal the potentially greater prominence of midstream and downstream sources in the studied region."

According to the study, petrochemical projects may contribute 206.3 million tons of additional CO2e annually by 2030 to account for the majority of the downstream sector's expected growth of 250.3 million tons of CO2e. LNG terminals may contribute 101.0 million tons of CO2e of the midstream sector's 121.4 million tons of CO2e, while oil and gas production may contribute 169.4 million tons of CO2e by 2030. The 48.6% and 51.3% of the midstream and downstream sectors' expected CO2e emissions come from projects that are "planned," meaning the project's owners have not started construction.

"The timing of planned or under-construction facilities is difficult to ascertain and subject to change," the authors note. "Furthermore, facilities not yet announced (and thus excluded from our inventory) may become operational prior to the completion of some facilities we do observe."

"Because of the path dependency of industrial development and high adjustment costs of fuel switching, further transition toward oil and gas may mean larger future use of fossil fuels relative to renewables," the authors wrote. "Therefore, it is critical to develop a clearer understanding of the scale and composition of the [greenhouse gas] impact of these new oil and gas resources."