U.S. Oil & Gas Industry Doubled Down on Environmental Commitments in 2020
America’s shale industry battled low oil prices, economic shutdowns resulting in decreased demand and a pandemic in 2020, but that didn’t stop the industry from continuing to strive to improve its environmental footprint through research, innovation, collaboration and commitments to greater transparency.
As we round out December, let’s take a look at some of the important steps companies took this year to reduce the environmental impact of energy production.
The U.S. oil and natural gas industry showed it’s serious about reducing emissions.
American producers are investing in new technology to reduce methane emission during production and transportation through investments in leak prevention, detection, and repair.
- The oil and natural gas industry created the Environmental Partnership to provide members with tools to improve leak prevention, detection, and repair in their operations.
- Range Resources committed to achieving net-zero greenhouse gas emissions and to decreasing its emissions intensity by 15 percent by 2025. The company plans to accomplish this by continued efforts to reduce its emissions and using carbon offsets like reforestation. Other companies are also committing to achieve net-zero in coming years.
Companies are committed to reducing flaring.
While increased pipeline capacity will go a long way to reducing the amount of flaring in places like the Permian, many companies in the region are committed to no longer using routine flaring ahead of those projects being completed.
- Occidental became the first American company to sign the World Bank’s Zero Flaring by 2030 initiative, a project of which fellow Permian producer Royal Dutch Shell is also a member. EOG Resources, a major Permian producer, also took steps in this direction by funding infrastructure investment to improve emissions efficiency. According to EOG Chairman and CEO Bill Thomas:
“In late September, we published our 2019 sustainability report that details a number of step-change improvements to our performance on emissions, flaring, water use and safety. We reduced our total greenhouse gas intensity rate more than 15 percent improving emissions efficiency across all significant sources. For the second year in a row we reduced our methane intensity rate 45 percent, thanks to an effort to retrofit and remove pneumatic controllers and pumps in the field. We continue to find opportunities to reduce flaring. Our wellhead gas capture rate improved to 98.8 percent last year and we are on track to be over 99 percent this year.”
Energy companies stepped up to promote carbon capture in a big way.
Fossil fuels will remain a key part of the American economy for the foreseeable future, and companies are stepping up in a big way to ensure that can continue in a way that helps tackle climate change. To bridge this gap, companies are promoting carbon capture and storage (CCS) to remove emissions from industries that are hard to decarbonize but which manufacture products that will continue to be essential to daily life around the world. Improvements in CCS technology will help to lower costs and to make it a more scalable solution.
- Several companies, including Shell, are members of the Carbon Capture Coalition whose mission is to “to reduce carbon emissions to meet midcentury climate goals, foster domestic energy and industrial production, and support a high-wage jobs base through the adoption of carbon capture technologies.”
- In 2020, Occidental announced it would become a “carbon management company,” signaling it had fully adopted CCS as its business model. Already Occidental has stored more than 20 million metric tons of CO2 annually and is moving forward on a Permian Basin direct-air capturing facility that will remove more than 1 million metric tons of CO2 per year.
- ExxonMobil, invested $260 million in LaBarge, a CO2 underground storage operation considered “the world’s foremost examples of carbon capture and sequestration”. This project alone would represent 20 percent of the company’s new emission reduction efforts by 2025.
If 2020 is any indicator, 2021 will see increased transparency and more collaboration to better understand methane.
Methane emissions reduction continued to be a major focus for companies operating in the Permian Basin and the broader American energy industry.
- In May, ExxonMobil launched Project Astra, a collaboration with the University of Texas at Austin, Environmental Defense Fund, Gas Technology Institute and Pioneer Natural Resources that deployed state of the art sensors in the Permian to allow producers and regulators to find and fix methane releases. Through partnership with regulators, researchers, and industry, the project aims to develop the next generation of tools to monitor and reduce emissions. As David Allen, lead investigator on the project, professor of chemical engineering at UT Austin and the director of the Cockrell School of Engineering’s Center for Energy and Environmental Resources said:
“Cost-effective, high-frequency monitoring for these assets will require innovative and disruptive techniques. The goal of Project Astra is to design, develop and deploy a prototype, next-generation monitoring network.
- Methane emissions were a focus for companies outside of the Permian as well. Through the Oil and Gas Climate Initiative (OGCI), a CEO-led project that brings together the heads of companies like Chevron, Occidental and ExxonMobil the industry has invested more than $7 billion in low-carbon solutions, including companies focusing on “innovative technologies that detect, measure, and reduce methane emissions.” The fruits of these investments will pay off for years to come.
The investments companies made in new technology, including CCS and methane emissions reduction, will go a long way toward reducing the industry’s carbon intensity in the future. As we took toward 2021, steps taken in 2020, such as the industry’s commitment to transparency and collaboration to reduce emissions will be a foundation for future progress.