CO2 emissions forecast to fall in 2019, 2020 TXOGA: Industry committed to lowering emissions from energy production

Separation vessels are seen on the grounds of the Royal Dutch Shell Plc processing facility in Loving, Texas, U.S. Members of the Texas Oil and Gas Association’s Environmental Partnership, which includes Shell, are working to reduce emissions from their oil and gas production, whether it’s drilling sites or processing facilities like Shell’s facility in Loving County. less Separation vessels are seen on the grounds of the Royal Dutch Shell Plc processing facility in Loving, Texas, U.S. Members of the Texas Oil and Gas Association’s Environmental Partnership, which includes ... more Photo: Callaghan O'Hare/Bloomberg Photo: Callaghan O'Hare/Bloomberg Image 1 of / 5 Caption Close CO2 emissions forecast to fall in 2019, 2020 1 / 5 Back to Gallery

Energy-related carbon dioxide emissions rose 2.8 percent in 2018, the largest since 2010, according to the latest Short-Term Energy Outlook issued by the Energy Information Administration. But the agency forecasts that emissions will fall this year and in 2020.

Todd Staples, president of the Texas Oil and Gas Association, said emissions came from energy consumption as opposed to emissions from energy production.

"Our Environmental Partnership is focused on reducing emissions from energy production," he said in a phone interview.

He said they are two sides of the same coin.

OIL REPORT: Hatch Resources, Ridgemont Equity Partners eye Permian asset acquisitions

Emissions from petroleum, primarily in the transportation sector, accounted for the largest share of total CO2 emissions, but emissions from natural gas, up nearly 10 percent, drove the overall increase last year, according to the EIA report. The agency attributed the rise in energy consumption and related emissions to weather conditions and continued economic growth.

The EIA said this year and 2020 are expected to bring milder weather than 2018. The milder weather requires fewer days when heating and air conditioning are needed, leading to less energy consumption. However, even with declines in emissions over the next two years, energy-related CO2 emissions are expected to be higher than 2017 levels, the agency said.

"When you look at what the sources are, you have to look at which side of the coin you're looking at," said Staples.

"We have a great story to tell on energy consumption," he said, pointing to refineries producing cleaner fuels and automakers producing more efficient vehicles that are about 90 percent cleaner than in 1970.

He said cleaner fuels have played a significant role in the United States cutting air pollutants. Emissions of CO2 are at 20-year lows, in part because of the rising use of natural gas, Staples said, forecasting natural gas will play an increasing role in energy generation and will contribute more to declining emissions.

TXOGA in early 2018 formed the Environmental Partnership and Staples said it has more than doubled from the original 26 companies to 57 currently.

OIL REPORT: Company plans enhancements to Permian WTI futures contract

"We know our member companies are investing in clean-burning fuels, carbon sequestration, methane emissions reductions, cleaner combustible engines. The industry is spending billions to improve the environment while ensuring a reliable source of energy," he said.

From 2000 to 2016, the nation's oil and natural gas producers have spent more than $108 billion in developing zero and low-carbon fuels, he said.

Companies "throughout the entire chain of production are making investments and commitments to develop market-based technologies that have good results," he said. "As these new technologies continue to be developed, the costs should come down and make them more attainable. If you think about it, today we're in an amazing position in the history of the state thanks to hydraulic fracturing, horizontal drilling, data analytics, new equipment that offers real-time information so operators can respond more rapidly. We will have more of that natural gas captured and go into the value stream and that will benefit producers, mineral owners and government entities."

But, he said, "the consumer is the ultimate judge of all we do. That's the way it should be. It should all be consumer-driven rather than the government picking and choosing winners and losers. It should be market-driven."

No matter which side of the environmental debate one falls on, he said, "oil and gas is playing a positive role in improving emissions."