The emission-intensive process of liquefying natural gas will be among the largest contributors to carbon emission growth for the world’s oil and gas majors, Wood Mackenzie said in a study.
The Edinburgh-based oil and gas consultancy noted that to understand the major drivers of carbon dioxide emissions is key to helping companies manage their portfolios for a lower carbon future.
One of the key factors in the company’s overall emissions of CO2 is the composition of its portfolio.
“Since different resource themes such as LNG, heavy oil, or deepwater, demonstrate significantly different emissions intensities, a company’s balance of asset types can significantly affect its overall emissions intensity,” WoodMac said.
As a result, companies which have a large proportion of emissions-intensive resource themes within their portfolio, such as oil sands, heavy oil and LNG, typically have higher overall emissions intensities.
The biggest producers of oil and gas have the largest absolute emissions, with the majors having higher emissions than the large caps.
WoodMac expects the emissions from oil and gas production operations of 25 major producers would jump by 17 percent by 2025.
WoodMac says its analysis suggests that over the next ten years upstream industry emissions will increase slightly faster than production. This is because three of the primary industry growth themes for the next ten years – LNG, oil sands and heavy oil – have emissions intensities two to three times greater than conventional oil or gas production.
Emissions from LNG production are forecast to grow by 43 percent over the period surpassing the supply which is expected to grow by 22 percent.
However, speaking to Reuters, WoodMac’s analyst Amy Bowe said that despite the increase in emissions from LNG production, liquefied natural gas remains the least polluting fossil fuel on a full-cycle basis.
Conventional onshore oil and gas fields will, however, remain the largest contributor to emissions as well as production by 2025.
LNG World News Staff