Leaning Into Climate-Advantaged Energy Production
In May 2023, the National Ocean Industries Association (NOIA) released a report on emissions from global oil production by ICF, the GHG Emission Intensity of Crude Oil and Condensate Production. According to the report, the U.S. oil production, and in particular, the U.S. Gulf of Mexico, has lower greenhouse gas emissions than much of the rest of the world.
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According to ICF, increasing U.S. production (onshore and offshore) to a level that offsets foreign crude or condensate would result in a 23% reduction in the average international carbon intensity of those displaced oil production volumes. This translates to a removal of 5.7 CO2e kg/bbl from the global average outside of the U.S. and Canada of 24.4 CO2e kg/bbl.
ICF estimates that increasing Gulf of Mexico production to offset foreign crude or condensate would lead to a significant reduction in average carbon intensity of the substituted oil volumes. Specifically, they estimate a 46% decrease, which translates to a removal of 11.3 CO2e kg/bbl from the global average outside of the U.S. and Canada of 24.4 CO2e kg/bbl.
Source: ICF analysis of GHG emission intensity from the production stage only (that is exclusive of crude transport, refining, petroleum product transport, petroleum product distribution & dispensing and petroleum production utilization). The quantity of oil for each US region and foreign country is indicated by the width of each rectangle. Worldwide production of this category of crude is 75.6 million barrels per day. The gray and blue rectangles are individual foreign countries. More detailed information for each country appears in Appendix A.
According to ICF's analysis, replacing similar crude categories from outside the U.S. and Canada with the U.S. Gulf of Mexico's largest crude category (API Gravity 37.5) could make a significant impact on global carbon emissions. ICF estimates that this substitution could reduce the average international carbon intensity of the displaced volumes by 50%, which is equivalent to removing 12.8 CO2e kg/bbl from the global average of 24.4 CO2e kg/bbl. This further highlights the potential for the U.S. Gulf of Mexico to play a major role in reducing global carbon emissions.
Source: ICF analysis of GHG emission intensity from the production stage only (that is exclusive of crude transport, refining, petroleum product transport, petroleum product distribution & dispensing and petroleum production utilization). The quantity of oil in the API 37.5 category for each US region and foreign country is indicated by the width of each rectangle. Worldwide production of this category of crude is 14.2 million barrels per day. The gray and blue rectangles are individual foreign countries. More detailed information for each country appears in Appendix A.
What Have We Learned?
The report showcases the outstanding achievements of the U.S. Gulf of Mexico in producing low carbon intensity barrels while maintaining a thriving energy production system. Based upon the findings from ICF and other leading organizations, the U.S. Gulf of Mexico is at the forefront of delivering among the world’s lowest carbon intensity barrels of oil.
Offshore operations in the U.S. Gulf of Mexico are carried out in adherence to the among the most comprehensive safety and environmental standards. Energy companies working in this region are collaborating to further reduce their already small carbon footprint. Through a cutting-edge technological revolution, the U.S. Gulf of Mexico continues to innovate new solutions to enhance operational efficiency and reduce emissions.
A First-of-Its-Kind Exhaustive Study
This study stands out from other similar reports by examining virtually all the world's oil production using a consistent scope and analytical method. The report includes:
- Emission profiles of 103 countries, including various U.S. and Canada producing regions, as well as other groupings such as OPEC and OECD nations.
- Analysis by type of hydrocarbon, covering 13 separate API Gravity classifications.
- Sensitivity analyses of methane emissions from the U.S. Gulf of Mexico, total U.S., Canada, and the rest of the world
- ICF estimates GHGs from each component of production:
- Drilling and completing wells and construction of production facilities
- Flaring and wellhead venting
- Leasing compression of natural gas
- Oil stabilization
- Storage tank fugitives
- Other methane emissions
- Electricity and natural gas for oil, water, and CO2 pumps and compressors
- Natural gas for steam
ICF includes a sensitivity analysis of global methane emissions by incorporating different methodologies based upon different factors from other organizations. Under the other methodologies, U.S. production, particularly that in the U.S. Gulf of Mexico, remain much lower than the global average, in terms of emissions intensity, and in some cases actually performs even better relative to the global average.
What is the Gulf of Mexico Energy Advantage?
The significant production volumes of offshore projects enable them to achieve average greenhouse gas (GHG) emissions that are considerably lower than the initial construction and development costs over the project's lifespan. While constructing oil and gas wells, a significant portion of GHG emissions arises from energy consumption, primarily through the use of diesel fuel, though natural gas and electricity usage are increasingly prevalent. Additionally, GHG emissions also result from the manufacturing of equipment and materials, such as oil country tubular goods, cement, sand, gravel, onshore production equipment, and offshore production platforms, that are essential to the well's construction.
Offshore deepwater wells require significantly more energy and materials compared to onshore wells, particularly during the initial construction phase. However, due to their higher productivity, the higher GHG emissions associated with offshore well construction are generally offset over the lifetime of the project. As a result, the emissions per unit of production are typically lower for offshore wells when compared to onshore wells.
Controlling Methane Emissions in the Gulf of Mexico
Due to the scale and level of investment, sophistication and technology, the U.S. Gulf of Mexico provides among lowest carbon barrels of oil when compared to other oil producing regions thanks in part to methane management.
- Methane emissions are tightly controlled for offshore operations and are very low when compared to other producing regions.
- Companies are required to recover and sell all produced gas. Venting and flaring is directly regulated by the U.S. Department of the Interior. Venting and flaring is limited to certain unique situations and is not authorized to exceed 48 hours without approval of the regulator.
- In addition, gas detection systems are deployed widely on facilities to quickly detect and address leaks.
- Through research, development, and demonstration, companies are deploying advanced technologies that include Forward Looking InfraRed (FLIR) cameras, drones, and advanced software systems.
Further Methodology Notes
The components of GHG emission intensity reported here by geographic region and type of crude or condensate include the following eight production-related components:
- Drilling and Completing Wells and Construction of Production Facilities
- Flaring & Wellhead Venting
- Lease Compression of Natural Gas
- Oil Stabilization/Treating
- Storage Tank Fugitives
- Methane Leaks & Non-wellhead Venting
- Electricity & Natural Gas for Oil, Water and CO2 Pumps\Electricity & Natural Gas for Steam Floods
When emissions of methane are converted to CO2e, a global warming potential of 25 is used. This convention makes the numbers that appear in this report consistent with EPA’s National GHG Inventory, from which various factors and control totals were taken.
The most important features of this study which distinguish it from many other published analyses are:
- The world’s entire crude and condensate production for 2020 is included in the study.
- The analysis is built up from highly disaggregated (field-level or groupings of individual wells) data that characterizes where and how the oil is produced.
- The same set of algorithms and conventions are used to estimate GHGs for all oil production, so that the results are truly “apples to apples.”
- Where possible, the results are checked and calibrated to national and international inventory data.
- Published results are split out into eight GHG subcategories to facilitate comparisons among sources of oil.
- Sensitivity analyses are performed on methane emission parameters and the methane global warming potential.
MORE ABOUT ICF
ICF Does Not Take Policy or Advocacy Positions. ICF is a non-partisan, non-political company that delivers a broad and diverse range of independent, unbiased, objective analyses and related consulting services to help its clients meet their missions. This report may not be construed as ICF’s endorsement of any policy, regulatory, lobbying, legal, or other advocacy position or organization or political party. Any conclusions presented herein do not necessarily represent the policy or political views of ICF. ICF’s services do not constitute legal or tax advice.
Views of Individual NOIA Members. This Material has been issued by ICF and NOIA and not the individual members of NOIA. This Material does not necessarily reflect the views and opinions of the individual members of NOIA.
NOIA Press Statement:
New Report: U.S. Gulf of Mexico Oil Production Leads with Lower Greenhouse Gas Emissions Intensity