Colorado: Revolutionizing Oil and Gas Best Practices
A recent article from EnergyWire highlights Colorado’s push to be the “capital of ‘responsibly sourced’ oil and gas” with Colorado operators taking innovative steps to produce energy cleaner and in alignment with the toughest regulations in the world.
From the article:
“It is certainly the future Colorado oil and gas industry leaders want to see as they seek to reposition their state as the capital of “responsibly sourced” oil and gas… Now they’re marketing them as ‘the gold standard’ as they try to sell utilities and others on the ‘Colorado Molecule.’ That molecule, they say, is cleaner than the energy particles produced in other states…”
Energy In Depth has previously highlighted operators’ focus on safety, sustainability, and minimizing community impact, all while navigating stringent industry regulations.
For example, Colorado has some of the strictest methane regulations in the country and was the first state to implement methane emissions rules for oil and natural gas production, which are responsible for reducing 60,000 tons of methane each year, with new innovations only contributing to that continued success.
EnergyWire highlights some of these innovations:
“No emissions. No flares. No tanker trucks rumbling in and out. Oil, gas and wastewater get whisked miles away by pipeline, not stored on site. Air monitors mounted on poles sniff for signs of methane leaks. The site has been declared by a rating firm to be more responsible than 75 percent of other operators.”
This is the description of a Civitas’ well pad, the state’s largest producer and Colorado’s first carbon neutral energy operator.
Project Canary, another Colorado-based market leader, was founded to help organizations improve performance, manage risks, and deliver verifiable data to accelerate the path to net zero. By verifying data through continuous monitoring efforts, like the ones described at the Civitas well pad, Project Canary gives buyers the confidence that they are buying a molecule produced at the highest environmental standard.
Chris Romer, Project Canary CEO and co-founder talks to this trend, where market premiums are often associated with responsibly sourced gas as a “…coming revolution where we’re actually going to attach environmental attributes to what was formerly just a base commodity.”
This commitment to sustainability extends across Colorado. Occidental Petroleum, a long time Colorado operator, has set a 2050 net zero goal and has planned to invest $275 million in their low carbon business during 2022. OXY will develop three carbon sequestration hubs by 2025 and 69 smaller Direct Air Capture (DAC) facilities by 2035. The producer will bring the world’s largest DAC online in 2024.
According to the International Energy Agency, Occidental Petroleum’s facility:
“ …has a goal of removing 1 million tonnes of CO2 from the atmosphere per year – 100 times bigger than all 19 DAC plants currently operating worldwide combined.”
Another large global and Colorado producer, Chevron Corporation, has committed to achieve net zero on upstream emissions by 2050. Chevron is planning to spend $2 billion carbon reduction projects, with an aim to reduce ~4 million tons of emissions. Chevron has also partnered with Project Canary to analyze some of the company’s assets in Texas and Colorado, confirming the producers commitment to sustainability. In a press release touting their verified emissions, Chevron said:
“As a result of the certification process, 82 wells achieved ‘Platinum’ status and three wells received ‘Gold’ status, Project Canary’s highest ratings and confirmation of Chevron’s industry-leading practices, including continuous monitoring. Chevron plans to market RSG from the certified assets in the second half of 2022.”
PDC Energy, another Denver based producer, is focused on continuous improvement, and has pledged to reduce greenhouse gas intensity by 60 percent and methane intensity by 50 percent by 2025.
These responsible and innovative efforts are just part of why Colorado stands out in the United States and throughout the globe. As Colorado Oil and Gas Association’s Dan Haley explained:
“If you’re going to get it in the United States, I’d argue you should get it from Colorado.”
Bottom Line: Colorado Energy companies across the value chain are committed to sustainability and emissions reduction. Energy companies in the state are paving the way for a cleaner future that includes energy reliability and security. The tough regulations coupled with the energy companies’ dedication to innovation and pioneering approach to greenhouse gas emissions make Colorado the leader in clean production.