Even the most ambitious energy transition scenarios show the need for oil for years to come.
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Many oil and gas producers are scrutinizing the emissions impact of their portfolios in a bid to determine which fields will have staying power as fossil fuel investment shrinks. Carbon pricing and other climate policy could create a premium for the least-intensive crude streams.
S&P Global Platts Analytics launched Nov. 15 an expanded set of carbon-intensity calculations for 84 fields around the world, with values expressed in kilograms of carbon dioxide equivalent per barrel of oil equivalent.
The analysis represents the greenhouse gas emissions of a field's current operations from the wellhead to storage or export terminal, including upstream activities like flaring and venting but not exploration and drilling. The assessments reflect average well operations for each field without making distinctions between wells run by different operators.
The calculations show a massive range of impacts, from above 170 kgCO2e/boe for California's onshore San Joaquin Basin to below 2 kgCO2e/boe for Norway's offshore Johan Sverdrup.
The medium to extra-heavy San Joaquin oil ranks so high because of the extra energy and water required to pump it out of the ground, including large steam injection cycles and managing high volumes of produced water, said Andrew Cooper, low-carbon markets analyst at Platts Analytics.
"Production has occurred here for about 120 years and has become more complex as the reservoir continues to deplete," he said.
At the other end of the spectrum, Johan Sverdrup operator Equinor and other offshore UK and Norway producers increasingly use renewable power to run their platforms instead of coal or natural gas, which sharply reduces emissions per barrel produced.
Equinor has set its own carbon intensity estimate for Johan Sverdrup production at 0.67 kgCO2e/boe, demonstrating that there is no established standard yet for modeling and presenting CI values on a field-by-field basis, partly as there are so many variables.
Offshore Gulf of Mexico production also claims low carbon intensity because advanced subsalt imaging practices have helped drillers target the most efficient reservoirs, Cooper said. CI rankings in the Gulf of Mexico range from about 11 kgCO2e/boe for Shell's Stones project to about 26 kgCO2e/boe for the Auger field, also operated by Shell.
Methane controls largely determine where US onshore shale drillers fall on the CI scale, and the entire sector will be forced to tighten these emissions further under the Environmental Protection Agency's latest proposed methane rule. US onshore operations range from about 17 kgCO2e/boe in the Permian and Delaware basin to 46 kgCO2e/boe near the Louisiana Gulf Coast, according to Platts Analytics.
Canadian shale producers face the same methane challenges but also must contend with these formations' high water content, with water recycling and other logistics increasing their emissions impact.
Canada's oil sands have some of the highest carbon intensities in the world, driven by the need for gas-powered steam injections to mine the heavy bitumen. Some producers are trying to lower emissions with cogeneration and solvent-based assistance, Cooper said.
More cuts needed
The Oil and Gas Climate Initiative, a CEO-led consortium of companies responsible for about one-third of global production, has set targets to lower upstream carbon intensity to 21.1 kgCO2e/b by 2025 and cut further to 17 kgCO2e/b by 2030.
Of the 84 fields ranked by Platts Analytics, 43 would currently meet the 2025 target and 38 would meet the 2030 target. This group largely includes offshore UK, Norway and Gulf of Mexico. Not making the cut include Canada oil sands, and most US and Canadian shale fields.
Producers are reducing upstream emissions through cogeneration facilities, modernizing compression plants, improving leak detection, ending venting and reducing flaring.
Occidental Petroleum plans to use large-scale direct air capture technology to create net-zero emissions from its enhanced oil recovery operations.
Equinor said it reduced its upstream carbon intensity to 8 kgCO2e/boe in 2020, from 9.5 kgCO2e/boe, largely as a result of renewable electricity at Johan Sverdrup, increased gas export from the Troll field and the Peregrino field offshore Brazil being shut for most of the year. The producer aims to cut further by 2025.
Kosmos Energy, which recently reevaluated its portfolio and shed all frontier exploration, has touted its Gulf of Mexico wells offshore Louisiana for their low carbon intensity.
Environmental groups say the efforts do nothing to eliminate Scope 3 emissions, which are the vast majority of global warming emissions tied to the use of fuels in airplanes, cars, petrochemicals and elsewhere downstream.