More than three-fourths of the production in the U.S. Gulf of Mexico region has a lower greenhouse gas (GHG) intensity than the basin-wide average, analysis from S&P Global Commodity Insights said.
The average GHG intensity of production in the U.S. Gulf of Mexico was measured at 7 kilograms of carbon dioxide equivalent per barrel of oil equivalent (kgCO2e/boe) in 2022. However, approximately 78 percent of the total production was found to be below this average. On the other hand, assets with higher carbon intensity, accounting for only 10 percent of the total production, generated 35 percent of the basin’s GHG emissions. This indicates that a minority of less-productive assets were responsible for a significant proportion of emissions.
The analysis emphasizes the wide variability in GHG intensity across individual assets in the basin. GHG intensity levels ranged from less than 2 kgCO2e/boe to nearly 50 kgCO2e/boe for most production. This variability underscores the limitations of relying solely on overall averages when assessing the GHG intensity of specific assets.
Similar to findings in other basins, such as the North Sea, the U.S. Gulf of Mexico exhibits considerable variation in intensity levels among its assets. The North Sea analysis showed an average intensity of 12 kgCO2e/boe in 2021, with individual assets ranging from less than 1 kgCO2e/boe to nearly 150 kgCO2e/boe.
The analysis utilizes a new capability developed by S&P Global Commodity Insights, which combines proprietary upstream databases with reported emissions and satellite flaring data to estimate emissions and emissions intensity at the play, asset, and source level. This comprehensive approach allows for a more accurate assessment of upstream oil and gas production emissions.
Several factors influence the GHG intensity of an asset, including productivity, field age, recovery techniques, drilling intensity, and technology used. Younger and more productive fields tend to have lower GHG intensity compared to older and more geologically challenging fields, which may require energy-intensive recovery techniques and older technology that contribute to higher emissions intensity. Electrification of operations and minimizing venting and flaring also impact GHG intensity.
The analysis reveals notable differences in GHG intensity between deepwater and shallow shelf terrains in the U.S. Gulf of Mexico. Shelf production exhibited a GHG intensity that was more than twice as high, on average, compared to deepwater production. This difference is attributed to shelf production being sourced from more mature and less productive wells, as well as processes that involve higher levels of venting. Deepwater production, which constituted the majority (86 percent) of all production in the U.S. Gulf of Mexico in 2022, comes from newer wells that utilize advanced techniques, resulting in lower emissions intensity.
The expansion of deepwater production in the U.S. Gulf of Mexico over the past decade has contributed to a 25 percent decrease in emissions intensity from 2012 to 2022. This trend is expected to continue as more production shifts from the shelf to deepwater, resulting in a steady emissions profile for the basin in the near term.
The analysis suggests that increased focus on decarbonization efforts may further reduce GHG intensity in the U.S. Gulf of Mexico in the future. This could be achieved through the deployment of carbon capture utilization and storage technology and the expanded use of renewable power sources, such as offshore wind turbines, to provide less carbon-intensive fuel sources for production in the region. These measures have the potential to contribute to additional declines in GHG intensity and support the decarbonization goals of the oil and gas industry in the U.S. Gulf of Mexico.