A pumpjack stands in a field next to Arvin High School with the Tehachapi Mountains in the background. Credit: Julia Kane
Even as more countries and companies pledge to get to net-zero carbon emissions, the world will continue to require fossil fuels for years to come, analysts say, because oil and natural gas are so intertwined with modern life.
But for all the talk about getting to a low-carbon future, there’s been little granular analysis on which fossil fuels produced from which oil fields emit the least amount of harmful greenhouse gases. Sure, there’s a general industry consensus that coal is dirtier than natural gas and that offshore oil is cleaner than shale — but by how much?
That’s the question global energy research firm S&P Global Platts set out to answer with its recently revealed carbon intensity report, a monthly metric that calculates how much carbon is emitted from 14 major crude fields around the world.
Platts analysts said they saw growing demand for low-carbon crude from investors, consumers and producers looking to reduce their carbon footprint. They realized that calculating the carbon intensity of different fuels can help determine which oil and gas fields to focus production on while the world transitions toward cleaner fuels.
“Oil and gas will remain part of the energy mix for decades to come,” said Deb Ryan, Platts’ head of low-carbon market analytics. “In order for the world to meet ambitious emissions reduction targets, a premium value needs to be associated with the lowest carbon intensity oil and gas assets as these fossil fuels continue to play a role in the overall energy mix. By launching carbon intensity values and price premiums, Platts is bringing much needed transparency into the market.”
Platts looked at the carbon emissions from the production of various crude and natural gas fields. Not surprisingly, Platts found that the oil sands from the Cold Lake field in Canada had the highest carbon intensity among the 14 oil fields analyzed, because it takes more energy to extract oil from sand than it does from shale or conventional wells.
The analysis also found that a barrel of offshore oil from the Mars oil field in the Gulf of Mexico has about half the carbon emissions of a barrel of shale oil from the Permian Basin in West Texas.
Even within similar oil fields, there are small differences in carbon intensities.
For example, Platts found that crude from the Permian’s Midland oil patch has slightly lower carbon intensity than crude from the Permian’s Delaware basin. It also found that crude from the Permian had lower carbon intensity than that from the Eagle Ford and Bakken.
Offshore, crude from the Johan-Sverdrup oil field off Norway, which uses electricity to power production, had lower carbon intensity than crude from the Mars oil field in the Gulf of Mexico, Platts said. Crude from Girassol in Angola, Cantarel in Mexico and Tengiz in Kazakhstan had generally lower carbon intensity than crude from Tupi in Brazil and Kirkuk in Iraq.
Platts found there’s no clear correlation between carbon emissions from heavy sulfurous crude or light sweet crude, because the way that crude is extracted, processed and transported can increase or decrease the carbon intensity.
Ultimately, Platts’ carbon intensity metrics could be used to put carbon taxes on various crude and natural gas sources, said Paula VanLaningham, Platts’ global head of carbon. The higher the carbon intensity of a barrel of crude, the higher the carbon taxes. cost of a carbon offset would be.
“What this (metric) does is puts it into perspective about what it would cost to truly mitigate your emissions from one type of barrel of crude over a different one, and that’s pretty critical” VanLaningham said. “When you’re actually looking at the cost of managing your emissions footprint from the beginning , just managing the venting and flaring makes an enormous difference in terms of what the overall environmental impact of running one barrel of oil over a different barrel of oil would mean.”