ExxonMobil

US CO2 and Methane Intensity by Basin

The CO2 intensity of oil and gas production is tabulated for 425 distinct company positions across 12 distinct US onshore basins in this data-file. Using the data, we can break down the upstream CO2 intensity (in kg/boe), methane leakage rates (%) and flaring intensity (mcf/boe), by company, by basin and across the US Lower 48.

In this database, we have aggregated and cleaned up 957 MB of data, disclosed by the operators of 425 large upstream oil and gas acreage positions. The data are reported every year to the US EPA, and made publicly available via the EPA FLIGHT tool.

The database covers 70% of the US oil and gas industry from 2021, including 8.8Mbpd of oil, 80bcfd of gas, 22Mboed of total production, 430,000 producing wells, 800,000 pneumatic devices and 60,000 flares. All of this is disaggregated by acreage positions, by operator and by basin. It is a treasure trove for energy and ESG analysts.

CO2 intensity. The mean average upstream oil and gas operation in 2021 emitted 10kg/boe of CO2e. Across the entire data-set, the lower quartile is below 3kg/boe. The upper quartile is above 13kg/boe. The upper decile is above 20kg/boe. And the upper percentile is above 70kg/boe. There is very heavy skew here (chart below).

The main reasons are methane leaks and flaring. The mean average asset in our sample has a methane leakage rate of 0.21%, and a flaring intensity of 0.03 mcf/bbl. There is a growing controversy over methane slip in flaring, which also means these emissions may be higher than reported. Flaring intensity by basin is charted below.

US CO2 intensity has been improving since 2018. CO2 intensity per basin has fallen by 17% over the past three years, while methane leakage rates have fallen by 22%. Activity has clearly stepped up to mitigate methane leaks.

(You can also see in the data-file who has the most work still to do in reducing future methane leaks. For example, one large E&P surprised us, as it has been vocal over its industry-leading CO2 credentials, yet it still has over 1,000 high bleed pneumatic devices across its Permian portfolio, which is about 10% of all the high-bleed pneumatics left in the Lower 48, and each device leaks 4 tons of methane per year!).

Most interesting is to rank the best companies in each basin, using the granular data, to identify leaders and laggards (chart below). A general observation is that larger, listed producers tend to have lower CO2 intensity, fewer methane leaks and lower flaring intensity than small private companies. Half-a-dozen large listed companies stand out, with exceptionally low CO2 intensities. Please consult the data-file for cost curves (like the one below).

Methane leaks and flaring intensity can also be disaggregated by company within each basin. For example, the chart below shows some large Permian producers effectively reporting zero flaring, while others are flaring off over 0.1 mcf/bbl.

All of the underlying data is also aggregated in a useful summary format, across the 425 different acreage positions reporting in to EPA FLIGHT, in case you want to compare different operators on a particularly granular basis.

Exploration capex: long-term spending from Oil Majors?

This data-file tabulates the Oil Majors’ exploration capex from the mid-1990s, in headline terms (in billions of dollars) and in per-barrel terms (in $/boe of production). Exploration spending quadrupled from $1/boe in 1995-2005 to $4/boe in 2005-19, and has since collapsed like a warm Easter Egg. One cannot help wondering about another cycle?

The peer group comprises ExxonMobil, Chevron, BP, Shell and TOTAL, which comprise c10% of the world’s oil production and 12% of the world’s gas production. As a good rule of thumb, this group can be thought of as c10% of global production.

This peer group quadrupled its exploration expenditures, from $5bn pa spent on exploration in 1995-2005 to an average of $20bn pa on exploration at the peak of the 30-year oil and gas cycle in 2010-2015. Exploration spend ramped from $1/boe to $4/boe over this timeframe. It has since fallen back to $1/boe, or around $1bn per company pa in 2022.

The US has always been the most favored destination, attracting c25% of all exploration investment, both offshore (e.g., Gulf of Mexico) and increasingly for short-cycle shale. During the last oil and gas cycle, the largest increases in exploration investment occurred in Africa, other Americas, Australasia; and to a lesser extent in Europe and the Middle East.

One possible scenario for the future is that this peer group will continue to limit its exploration expenditures to the bare minimum, below $1bn per company per year, or below $1/boe of production; under the watchwords of “capital discipline”, “value over volume” and “energy transition”.

However, it is somewhat terrifying to consider that the industry needed to spend an average of $2.5/boe on exploration from 2005-2019 in order to hold its organic production “flattish”.

Under-investment across the entire industry may foreshadow a sustained shortage of energy, especially if 50% lower-carbon gas is intended to replace coal as part of the energy transition, per our roadmap to net zero, or more pressingly as Europe faces sustained gas shortages. Hence one cannot help wondering if industry-wide exploration capex in the 2020s and 2030s is going to resemble the 2000s and 2010s?

This data-files aggregates the Oil Majors’ exploration capex, across ExxonMobil, Chevron, BP, Shell and TOTAL disclosures, apples-to-apples, back to 1995.

US Refiners: CO2 cost curve?

Which refiners have the lowest co2 intensity

Which refiners are least CO2 intensive, and which refiners are most CO2 intensive? This spreadsheet answers the question, by aggregating data from 130 US refineries, based on EPA regulatory disclosures.

The full database contains a granular breakdown, facility-by-facility, showing each refinery, its owner, its capacity, throughput, utilisation rate and CO2 emissions across six categories: combustion, refining, hydrogen, CoGen, methane emissions and NOx (chart below).

Assessed companies include Aramco, BP, Chevron, Citgo, Delek, ExxonMobil, Koch, Hollyfrontier, Marathon, Phillips66, PBF, Shell and Valero.

Refinery membranes: where’s the IP?

Leading companies commercializing refinery membranes

This data-file reviews over 1,000 patents to identify the technology leaders aiming to use membranes instead of other separation processes (e.g., distillation) within refineries.

Covered companies in the screen include Air Liquide, Air Products, Aramco, BASF, BP, Chevron, Dow, ExxonMobil, GE, Honeywell, IFP, MTR, Praxair, Shell, WR Grace and Zeon. A brief overview is prented for each company, along with a summary of their recent patent filings, and all the underlying details.

Operational data are also presented for two interesting cases: Exxon’s recent refinery membrane breakthrough (chart below) and Air Products’s PRISM membranes for hydrogen separation.

Biofuel, green diesel, renewable diesel: where’s the IP?

This data-file tracks 5,000 patents filed into biofuels: by geography, by company and particularly in 2017-20. The pace of research activity into “biofuels” and “biodiesel” seems to have halved since 2014, suggesting industry interest is waning.

As usual, China has come to dominate the recent patent literature, accounting for 60% of recent filings. Out of the ‘Top 25’ patents filed into biofuels from 2017-20, 15 are Chinese companies.

Ranked by recent patent filings, technology leaders include Sinopec, BASF, Arkema, Neste, TOTAL, ExxonMobil and DuPont. It is interesting that some well known companies (e.g., Ryze) did not appear to have filed many patents recently. Full details on the patent trends and filings are in the data-file.

Our 3 key conclusions are spelled out in the green diesel article sent out to our distribution list.

Methane emissions from pneumatic devices, by operator, by basin

Methane leaks from 1M pneumatic devices across the US onshore oil and gas industry comprise 50% of all US upstream methane leaks and 15% of all upstream CO2. This data-file aggregates data on 500,000 pneumatic devices, from 300 acreage positions, of 200 onshore producers in 9 US basins.

The data are broken down acreage position by position, from high-bleed pneumatic devices, releasing an average of 4.1T of methane/device/year to pnuematic pumps and intermediate devices, releasing 1.4T, through to low-bleed pneumatic devices releasing 160kg/device/year.

It allows us to rank operators. Companies are identified, with a pressing priority to replace medium and high bleed devices. Other companies are identified with best-in-class use of pneumatics (chart below). The download contains 2018 and 2019 data, so you can compare YoY progress by company.

A summary of our conclusions is also written out in the second tab of the data-file. For opportunities to resolve these leaks and replace pneumatic devices, please see our recent note on Mitigating Methane.

Molten Carbonate Fuel Cells: capture carbon, generate electricity?

Molten carbonate fuel cells (MCFCs) could be a game-changer for CCS, and fossil fuels. They are electrochemical reactors with the unique capability to capture CO2 from the exhaust pipes of combustion facilities; while at the same time, efficiently generating electricity and heat from natural gas. The first pilot plant was due to be tested in 1Q20, by ExxonMobil and FuelCell Energy. Economics range from passable to phenomenal. The opportunity is outlined in this 27-page report.

Molten Carbonate Fuel Cells: CCS plus Power? The Economics?

Molten Carbonate Fuel Cells could be extremely promising, generating electrical power from natural gas as an input, while also capturing CO2 from industrial flue gases through an electrochemical process.

We model competitive economics can be achieved, under our base case assumptions, making it possible to retrofit units next to carbon-intensive industrial facilities, while also helping to power them.

Our full model runs off 18 input variables, which you can flex, to stress test your own assumptions.

Offshore Wind Patents: Majors and Services?

Majors and Services Offshore Wind Technologies

This data-file tracks wind patents, across 20 traditional energy companies, comprising cap goods conglomerates, Oil Majors and Offshore Oil Services. The aim is to assess which companies have differentiated IP to benefit from the scale-up of offshore wind.

Traditional offshore-focused energy companies (ie Majors and Oil Services) are not generally found to have differentiated wind IP, comprising <2% of the offshore wind patents since 2000. 2 Majors and 2 Service companies have, however, made interesting inroads.

Covered companies include: ABB, Aker, Alstom, Aramco, BP, Cameron, Chevron, Eni, Equinor, ExxonMobil, GE, OneSubsea, Saipem, Shell, Siemens, Subsea 7, Technip, TOTAL and Vestas.

Permian CO2 Emissions by Producer

This data-file tabulates Permian CO2 intensity based on regulatory disclosures from 20 of the leading producers to the EPA in 2018. Hence we can calculate the basin’s upstream emissions, in tons and in kg/boe.

The data are fully disaggregated by company, across the 20 largest Permian E&Ps, Majors and independents; and across 18 different categories, such as combustion, flaring, venting, pneumatics, storage tanks and methane leaks.

A positive is that CO2 intensity is -52% correlated with operator production volumes, which suggests CO2 intensity can be reduced over time, as the industry grows and consolidates into the hands of larger companies.

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