GULF OIL PRODUCTION BOASTS LOW EMISSIONS

The Biden administration’s climate action agenda may not have fully considered the carbon footprint of oil produced in the Gulf, and its possible role in the energy transition. According to Houston-based McKinsey & Company, the Gulf has some of the lowest emissions per barrel of all major basins in the world.

A 2022 McKinsey report said: “The lower-carbon potential of the Gulf of Mexico is determined by the Scope 1 and 2 emissions that are associated with the direct and indirect greenhouse gases released from development and production operations. In the oil and gas value chain, these steps are where the source of supply matters most,” McKinsey said. Conversely, emissions from midstream and downstream work such as refining and transportation, are largely independent of the oil source. “The Gulf releases less than half of the emissions per barrel compared with other major basins … That potential matters to the many oil and gas companies that are investing in the

Gulf of Mexico, especially to those that have announced net-zero emissions targets,” according to the report. The Gulf still has two-thirds of its estimated recoverable volumes available, a great deal of existing infrastructure and project pipelines, and it can therefore “ensure continued supply during the transition to netzero emissions. The low carbon oil of the Gulf of Mexico can help fill the supply gap during the energy transition, while helping to balance the goals of policy makers and oil companies as they meet the world’s energy needs and prepare for a new energy future,” the report said.

Some of the Gulf’s low-carbon advantages include the proximity of production to market (minimizing routine flaring), efficient designs (minimizing methane leakage), high well throughput (reducing energy-intensive new starts), and active decarbonization efforts, according to McKinsey.

If the transitional demand is supplied by those with higher carbon product, the U.S. would be a net loser.