Environmental Emissions Bright Spots for Methane and Carbon Dioxide  

Emissions

According to the folks at Vox and data from Co2 Earth, our planet has hit an average PPM of about 410. The recommended benchmark for CO2 amount (measured by PPM) is 350. So, we are well past concerning levels for our climate.

But there seems to be a bright spot on the horizon. Moving past some of the more basic policies for curbing carbon emissions, like putting a cap on carbon, there are more involved methods that could radically reduce emissions.

Some of these methods include Carbon Dioxide Capture and Sequestration, which means that engineers take carbon from the air (the capture) and pump it into underground formations for storage (the sequestration). But as Vox states, CCS probably won’t be readily adopted because there’s not a lot of economic incentive for organizations to do so.

A way incentivize this is to use Carbon Capture for the purpose of commoditizing and eventually selling CO2 for plastics, carbonated beverages, polymers and other synthetics. 

This won’t stop rising CO2 emissions in their tracks, but can certainly help. 

Another bright spot is that methane rates have been decreasing

Methane Rates Are Dropping

As The Hill states in the aforementioned article, “methane emissions in the United States have dropped 15 percent since 1990 even as natural gas production increased more than 50 percent over that same period.” And because natural gas and methane emissions go together like ham and rye, it’s very encouraging to see such a drop.

How are they doing this though? In a similar way to the carbon capture and direct capture methods for CO2, companies are harnessing technology to capture emitted methane. The companies are transporting methane via pipeline to other organizations who then use the methane as fuel. This commoditization of what was once inevitably vented into the air has been an immense bright spot for our climate’s health.

According to The Hill as well, carbon rates have been reduced as a result of the biggest coal plants being shuttered. Or as Scientific American puts it so well, “Coal plant closures have been a feature of U.S. power markets for the better part of a decade, as stagnant demand, low natural gas prices and increasing competition from renewables have battered the coal fleet.”

So, as methane rates are continued to be locked down and controlled and renewables continue to replace coal, there are definite bright spots to glean despite the immense amount of work still to be done to keep our planet safe.

Taking the Pulse of the Permian Basin for Natural Gas Prices

Natural Gas

Seeing that the Permian Basin is such a huge driver of the Texas natural gas market, as well as the largest oil field in the country, it’s important to periodically peer into what has been going on in that region. 

As the EIA has recently reported, Kinder Morgan recently built the new GCX natural gas pipeline, which has increased natural gas prices already, as it is close to getting some use. In that same report, the EIA says “natural gas spot prices…settled at $1.55/million British thermal units (MMBtu) on August 15, the highest price since March 2019.” 

In the Waha hub, in particular, prices have been rising. And that’s encouraging for many because prices were negative for quite some time. 

Additionally, more pipelines will be set for construction in the future, as the EIA states that at least 7 more are on the horizon. They also speculate that the Waha hub’s spot prices will stay higher as a result.

Although, some of Waha’s prices rising have to do with lowered temperatures, as the summer is cooling off after all. The rise meant record high demands as cheap natural gas was used to generate electricity across the country to accommodate the heat.

Bottlenecks and Permian Projections

According to Forbes, as well as the CEO of Exxon himself, the natural gas will grow in years to come. Growth will be driven by more pipelines being opened. And like all commodity-driven expansion, it just takes time for prices to go back up. He pegs natural gas to rise by 1.3% per year. 

More pipelines doesn’t necessarily guarantee a rise in oil prices for the major players like Exxon, but it surely helps to stave off the risk of more costly pipeline capacity constraints, which make it hard to meet the rising demand in the country. And so far, projections are looking accurate as this report from Moodys in 2018 shows how a late 2019 turnaround is the most likely considering the newer pipelines coming online.

This trend of more pipelines will only continue, as infrastructure will need to increase well into the next decade to accommodate growing production. John Coleman, who is the principal analyst for Wood Mackenzie Ltd., says that the coming years will see some of the biggest investments in pipeline infrastructure in history.

Selling Permian Oil Stocks

As Concho sells its Permian assets, and more of the bigger guys continue to buy stocks while the prices are so low, the Permian climate for oil and natural gas might look differently as Exxon and Chevron continue to accumulate more valuation in shale oil holdings. How this will affect natural gas prices despite coal’s decline and more effort towards expanding renewable energy, remains to be seen.