FUEL FIX

14

Houston Chronicle - - TEXAS INC. CONTENTS -

Oil bust helps slash Per­mian gas emis­sions.

Pol­lu­tion from burn­ing ex­cess nat­u­ral gas at Per­mian Basin wells is ex­pected to reach a record low this year as lower oil prices have halted most pro­duc­tion in the West Texas shale play.

The car­bon diox­ide in­ten­sity of oil pro­duc­tion in the Per­mian is ex­pected to fall to 8.6 pounds of emis­sions per bar­rel by Novem­ber, ac­cord­ing to Nor­we­gian en­ergy re­search firm Rys­tad En­ergy.

Emis­sions in the Per­mian reached a high of 26.5 pounds of car­bon diox­ide per bar­rel of oil pro­duced in June 2019 due to an in­dus­try prac­tice known as flar­ing in which op­er­a­tors burn off ex­cess nat­u­ral gas at wells.

Colin Ley­den with the Austin of­fice of the En­vi­ron­men­tal De­fense Fund, said emis­sions de­creased from many in­dus­trial sources dur­ing the coro­n­avirus pan­demic. And although flar­ing is pos­si­bly de­creas­ing as fewer new wells are drilled and pro­duc­tion is shut in, Ley­den warned that it could ramp back up if oil prices re­bound.

“The un­der­ly­ing dy­nam­ics driv­ing flar­ing in the oil field haven’t changed,” he said. “So it is also rea­son­able to ex­pect that flar­ing will snap back if and when commodity prices re­cover and drilling and pro­duc­tion re­sume.”

Farm­ers, ranch­ers would get tax cred­its

A bi­par­ti­san group of sen­a­tors is seek­ing to ex­tend tax cred­its for car­bon cap­ture be­yond in­dus­trial sources such as power plants and ce­ment fac­to­ries to farm­ers, ranch­ers and for­est landown­ers.

The bill, in­tro­duced Thurs­day, would cre­ate a cer­ti­fi­ca­tion pro­gram at the De­part­ment of Agri­cul­ture for the car­bon diox­ide nat­u­rally pulled from the at­mos­phere by crops and trees.

“This leg­is­la­tion is an im­por­tant step in en­cour­ag­ing farmer and for­est landowner par­tic­i­pa­tion in car­bon mar­kets,” said Jeff Kupfer, pres­i­dent of Con­serv-Amer­ica, a non­profit.

The bi­par­ti­san ac­tion comes as Repub­li­cans have grown in­creas­ingly proac­tive on the is­sue of cli­mate change after years of ques­tion­ing the va­lid­ity of sci­ence show­ing that the con­tin­ued burn­ing of green­house gases was dam­ag­ing the planet.

Shale pro­duc­ers restart pro­duc­tion

As OPEC+ pro­duc­ers head to­ward a con­sen­sus on ex­tend­ing out­put curbs, oil’s rally is prompt­ing some U.S. pro­duc­ers to open their taps once again.

Fu­tures last week set­tled at their high­est since March 6, the day the Saudi-Rus­sian al­liance broke down just as a global pan­demic dimmed the out­look for de­mand. Oil’s re­bound over the past month brings back con­cerns that Rus­sia could again hes­i­tate to ex­tend out­put cuts, with ri­val shale pro­duc­ers sig­nal­ing they are ready to re­open wells that were shut dur­ing the mar­ket’s col­lapse.

Fur­ther ev­i­dence of that threat emerged last week, when U.S. driller Pars­ley En­ergy Inc. said it’s turn­ing oil wells back on just weeks after shut­ting them off, il­lus­trat­ing the shale in­dus­try’s agility in re­spond­ing to ris­ing crude prices.

“If ev­ery­body mag­i­cally de­cides to turn the taps back on and lets the oil back to the sur­face, now you’ve got 1.5 mil­lion to 2 mil­lion bar­rels a day that needs to find a home,” said Ste­wart Glick­man, an en­ergy an­a­lyst at CFRA Re­search.

Re­finer covert­ing to cleaner fuel

In a sign of chang­ing times, a U.S. oil re­fin­ing com­pany is con­vert­ing one of its plants into a pro­ducer of clean fuel.

Hol­lyFron­tier Corp.’s Cheyenne re­fin­ery will stop us­ing crude oil and be re­pur­posed to pump out re­new­able diesel, which is typ­i­cally made from soy­bean oil, re­cy­cled cook­ing oil and an­i­mal fats. That’s after pro­cess­ing mar­gins plum­meted on the col­lapse in fuel de­mand due to COVID-19-re­lated lock­downs. Be­sides, the old fa­cil­ity’s main­te­nance costs were “un­com­pet­i­tive,” the com­pany said, and the gov­ern­ment is pro­mot­ing cleaner fuel pro­duc­tion.

It’s the lat­est ex­am­ple of how the tra­di­tional fos­sil fuel in­dus­try is chang­ing amid ris­ing calls for the pro­tec­tion of the en­vi­ron­ment and in­creased de­mand for green sources of en­ergy. Cheaper re­new­able en­ergy pro­jects have al­ready led to de­creas­ing coal out­put across the U.S., and now — in the wake of oil’s his­toric crash — some fuel pro­duc­ers are grap­pling with di­min­ished re­turns from turn­ing crude into fuel.

Jonah M. Kes­sel / New York Times

Emis­sions in the Per­mian reached a high of 26.5 pounds of car­bon diox­ide per bar­rel of oil pro­duced in June 2019 due to an in­dus­try prac­tice known as flar­ing.

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