Industry's GHG mitigation outlays made impact, API-backed study says

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Mar. 29 -- More than $58 billion invested in low-carbon technologies from 2000 to 2008 helped the US oil and gas industry reduce its greenhouse gas emissions by more than 48 million tons of carbon equivalent from 2007 to 2008, a study sponsored by the American Petroleum Institute estimates.

The cuts are comparable to taking 9.7 million cars off the roads, the report by energy consulting firm T2 Associates said. “However, it needs to be recognized that other factors make specific linkage between aggregate emission and individual past investments problematic,” it continued.

It said that while the report documents falling emissions from 2007 to 2008, US Energy Information Administration data show that domestic oil and gas drilling activity grew by 6.3% and gas production increased by 4.4% as crude oil production and refinery throughput declined by about 2.5%.

“Further, investments made can often take time to complete and result in emission reductions,” the report noted. “Some of the reductions in 2007-08 are likely due to investments in early-to-middle years of the 2008-08 period.”

It indicated that reductions from 2007 to 2008 fell into 3 major categories: Fuel substitution accounted for 46% of the cuts, largely reflecting enhanced methane management in natural gas supply and distribution systems. Nonhydrocarbon fuels (investments in wind and solar power systems) represented another 19%. And end-use efficiency improvements (outlays for combined heat and power) accounted for 35% of the total.

The study said that from 2000 to 2008, the carbon dioxide intensity of the US economy (measured as tonnes of carbon dioxide equivalent emitted per million dollars of gross domestic product) improved by more than 15% or 1.7%/year. Oil and gas industry investments in GHG mitigation technology over the last decade contributed to the decline, it said.

“At the national level, the decrease in US anthropogenic CO₂ emissions and intensity in 2008 resulted primarily from 3 factors: higher energy prices that led to a drop in petroleum consumption; economic contraction in three out of four quarters of the year, resulting in lower energy demand for the year as a whole in all but the commercial sector; and lower demand for electricity combined with lower carbon intensity of electricity supply,” the report said.

GHG mitigation investments by the oil and gas industry from 2000 through 2008 significantly contributed to improved carbon intensity and the overall reductions as seen in the trend of improving intensity for the US economy during the period, it added.

Contact Nick Snow at [email protected].