Author: Tom Young

PetroChina, the largest oil and gas producer in China, saw a 6.35 per cent year-on-year decrease in methane emissions from 2021 to 2022, the first two years the company reported data.

Methane emissions fell from 428,100 tonnes of CH4 in 2021 to 400,900 tonnes of CH4 in 2022, according to Evaluate Energy data.

Meanwhile, annual hydrocarbon production rose from 1,625 million boe in 2021 to 1,685 million boe in 2022, indicating methane emissions reduction came from process. PetroChina’s methane intensity fell from 0.45 per cent in 2021 to 0.4 per cent in 2022. Methane intensity is the ratio of methane leaked compared to hydrocarbon output.

Reducing methane emissions was one of 10 sustainability projects outlined by PetroChina last year.

It has several actions it is taking on methane emissions, including reducing flaring, putting in place leak detection and repair (LDAR) and emissions monitoring and accounting systems, as well as implementing technologies to recover vent gas from oil production. In 2022 it reported for the first time a figure for recovery from gas venting of 1.5 billion cubic metres.

The company says it is participating actively in China’s methane monitoring pilot projects and is currently undertaking a study to evaluate China’s nationwide methane emissions in 2030.

Global action

PetroChina is a member of the Oil and Gas Climate Initiative (OGCI), a group of 12 of the world’s largest oil and gas companies including Chevron Corporation, Exxon Mobil Corporation and Occidental that have a collective target to reduce methane emissions intensity to “well below” 0.2 per cent by 2025, among other targets.

OGCI members met the target early, reporting an aggregate upstream methane intensity of 0.17 per cent in 2021, the last year for which data is available, suggesting there is scope for PetroChina to make further reductions in line with its peers.

The OGCI has provided its members with a methane flaring reduction toolkit and has conducted a satellite monitoring study in Iraq which found that there is significant potential to use that technology to detect methane emissions in other regions around the world.

PetroChina started its methane reduction program later than most EU and U.S. companies — many of which began to tackle the problem after the Paris Agreement in 2015. PetroChina only began reporting in 2020 and has an individual company goal to reduce methane intensity to 0.25 per cent by 2025 and to 0.2 per cent by 2035. It hopes to maintain methane intensity this year despite targeting a 2.6 per cent increase in production to 1,729 million boe in 2023.

Hazardous waste

Hazardous waste refers to any waste material generated during exploration, extraction, refining and production processes that poses a threat to the environment or human health. Fluids used during fracking and drilling are the most common examples.

PetroChina reduced the amount of hazardous waste it produced by 32 per cent from 1.396 million tonnes in 2021 to 0.943 million tonnes in 2022.

The company has reduced its use of oil-based mud in its operations by deploying layered drilling techniques and has begun using new technologies to capture and dispose of what oil-based mud it does use.

PetroChina has recently adopted a new digitalized control system for its entire waste management process from generation through to storage, transportation and disposal to ensure it is compliant with regulations.

In 2022, the firm built more facilities to dispose of oil-bearing waste and stepped up its inspection and maintenance regime for existing facilities.

 

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Australia major Woodside Energy Group’s net equity Scope 1 emissions rose sharply in 2022 to 5.3 million tonnes CO2e from 3.5 million tonnes CO2e the prior year due to a merger with BHP Group’s petroleum arm completed in June 2022, Evaluate Energy data shows.

The merger incorporated BHP’s Australian, Gulf of Mexico and Trinidad and Tobago production units, as well as the supporting ancillary activities, into Woodside’s portfolio.

Carbon intensity fell from 0.34 to 0.29 kgCO2e/boe over the same period, reaching the lowest figure ever achieved, and suggesting the assets acquired were less carbon intense than those that Woodside was already operating.

BHP did not separate out emissions or emissions intensity data from its petroleum and mining operations pre-divestment, and Woodside did not respond to requests for data on the carbon intensity of the merged BHP assets.

But Woodside does provide data showing that the starting base emissions of the historical and merged assets were together just over six million tonnes of CO2e in 2021, and therefore there was a reduction in the overall net equity Scope 1 emissions of the existing and merged assets between 2021 and 2022 of just over 0.7 million tonnes of CO2e.

Woodside has maintained its Scope 1 and 2 emissions reduction targets of 15 per cent by 2025 and 30 per cent by 2030, but has re-established its starting base as 6.32 million tonnes of CO2e — the 2016-2020 gross annual average for the merged entity.

But the firm’s strategy relies heavily on offsets, meaning that the degree to which it plans to meet these targets through abatement is opaque. CEO Meg O’Neill told a conference last year that the firm had nearly all the offsets it needs already to achieve its 2030 target.

Woodside does have Scope 1 reduction initiatives focused on its LNG operations and says it assumes an internal long-term cost of US$80/tCO2e in the design and operation of its assets. At Pluto LNG’s Train 2 the firm has adopted aero-derivative gas turbines to achieve more efficient liquefaction, and has a goal to abate 30 per cent of the plant’s emissions by 2030. But again, progress towards this target can be supported with offsets. The firm’s Australian floating production storage and offloading (FPSO) facilities have focused their activities on reducing flare and fuel usage and delivering reliability improvements.

Woodside says it has selected around 30 decarbonization opportunities in its planning lifecycle, including: energy efficiency projects, equipment modifications, lower carbon power and process optimization.

In 2022, 67 per cent of Woodside’s equity Scope 1 greenhouse gas emissions were from fuel combustion to power its assets, 20 per cent came from venting (of which the majority is associated with removal of reservoir CO2 as part of the LNG process), and 13 per cent from flaring.

Water use

Woodside dramatically cut its water use in 2022 (see chart), and not just through reduced production. Its water intensity figure (water use vs hydrocarbon production) matched its lowest-ever levels.

The firm’s water efficiency actions are set at five-year intervals and reported on each year. These actions include regular inspections of infrastructure, as well as the ongoing identification, maintenance and repair of leaks. The next five-year review will happen in 2023.

Real-time monitoring of key indicators is used to check performance against the targets.

During 2022, Karratha Gas Plant and Pluto LNG in Western Australia both met water efficiency targets set the previous year. Despite meeting the target, Pluto LNG experienced higher-than-expected water usage, eventually attributed to an underground leak from the site firewater system which was subsequently isolated and repaired. Further improvements in water use and efficiency are thus expected at the facility in 2023.

King Bay Supply Facility slightly exceeded its water efficiency target, but some key initiatives were implemented during the period, including the repair of leaks in the main potable water tank liners and the commissioning of a new wharf bunkering line that will reduce strain on existing high density polyethylene piping. The firm says this will result in a lower frequency of failures going forward.

In its Trinidad and Tobago oil storage facility in Guayaguayare Bay, Woodside installed a pilot ozone skid to reduce the chemical oxygen demand (COD) of the 86,000 barrels of water in its oil storage tanks, allowing the firm to successfully meet criteria to be able to discharge the water.

 

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Chevron Corporation reduced its Scope 1 operated greenhouse gas emissions to an all-time low of 52 million tonnes of CO2e in 2022, following a small increase in 2021 due to increased production as economies recovered from the Covid-19 pandemic, according to Evaluate Energy data.

Aside from 2021, Scope 1 emissions have fallen every year since 2018.

In 2021, the firm announced its plan to achieve net-zero Scope 1 and Scope 2 emissions by 2050. As part of that plan, it established a marginal abatement cost curve process (MACC), which allows it to visualize the relative cost and abatement value of different projects and then prioritize the lowest cost opportunities with the greatest abatement potential.

Using the MACC process Chevron identified over 120 reduction projects for development. It plans to spend more than US$350 million on these projects in 2023 and approximately $2 billion total on similar projects through 2028.

In 2022, the firm made progress on 90 of these projects and completed 13. One of the key successes during that year involved updating a crude unit’s heat exchangers to improve waste heat utilization and reduce furnace firing, cutting CO2 emissions from the unit by approximately 20,000 tonnes annually.

Another significant reduction according to Evaluate Energy data came in upstream flaring, which was responsible for around 13 per cent of scope one emissions in 2018. Find out more about Evaluate Energy’s ESG data here.

Flaring volumes fell from 100,000 mmcf in 2021 to 60,000 mmcf in 2022, resulting in a three million tonne CO2e reduction in emissions. Historically many energy producers flare natural gas produced as a byproduct of oil production when there is no market infrastructure or demand for the associated gas. All of Chevron’s upstream onshore facilities now operate with the aim of preventing routine flaring, and the firm now considers gas-takeaway availability in its planning process, only developing wells in the Permian where there is clear offtake potential for the associated gas.

Chevron has also begun the process of switching to electric or low carbon fuel sources to power drilling, transportation, and logistics activities across its U.S. upstream operations.

Capital allocation in low carbon

Chevron is leading the way amongst the U.S. majors in its capital allocation to reducing its carbon intensity. In addition to the $2 billion in carbon reduction projects mentioned above, the firm has announced it will invest $8 billion in new low carbon technologies by 2028.

There are three key strands to the firm’s low carbon technology investments — renewable fuels, hydrogen, and CCS — and it has formed a new division called Chevron New Energies to pursue these opportunities.

Renewable fuels

By 2030 the company wants to grow renewable fuels production capacity to 100,000 bbls/d, principally in renewable diesel and sustainable aviation fuel, where it sees growing demand.

Chevron has several joint ventures underway, including a co-investment with California Bioenergy LLC in a project to produce dairy biomethane as an RNG transportation fuel in California, and another with Bunge North America, Inc., a subsidiary of Bunge Limited, to develop renewable feedstocks from canola crops.

Hydrogen

Chevron wants to grow hydrogen production to 150,000 tonnes annually. It is working with Japanese utility JERA to develop liquid organic hydrogen carriers (LOHC) technology — a potential alternative to ammonia for transporting the fuel over longer distances.

In 2022 Chevron also invested in Canadian clean hydrogen company Aurora Hydrogen’s $10 million funding round. Aurora uses a relatively new technology called methane pyrolysis to produce hydrogen from natural gas.

CCS

Chevron has a CCUS deployment target of 25 million tonnes annually of CO2 in equity CCS storage by 2030.

Despite problems, Chevron’s flagship Gorgon project in Australia has given it a large knowledge base in CCS. Chevron was licensed to build the $54 billion gas export plant on the condition it would inject around four million tonnes (80 per cent) of the CO2 it emitted. But it injected just 1.6 million tonnes in the 2021–22 financial year due to issues with its water management system.

Chevron has insisted that the CO2 injection part of the project is working well and is looking to leverage its knowledge from Gorgon in other projects.

It recently announced plans to expand its Bayou Bend project on the U.S. Gulf coast to enable it to store one billion tonnes of CO2. The project is planned to be deployed before 2030, pending FID. It would store four–five million tonnes of CO2 annually in its first phase before increasing this to eight–10 million tonnes.

Chevron is also one of 10 industry partners that have agreed to support large-scale deployment of carbon capture and storage (CCS) to help decarbonize industrial facilities in Houston, Texas.

 

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