HOUSTON–Annual methane emissions generated by oil and natural gas production operations in the Permian Basin dropped 26% in 2023 from the previous year–equal to the total amount of carbon emissions avoided by every electric vehicle on U.S. roads, an analysis by S&P Global Commodity Insights calculates.

Methane emissions from upstream Permian Basin operations fell more than 34 billion cubic feet in 2023, the most recent year that data is available, S&P Global details. Given that methane is a potent greenhouse gas, the analysis says the reduction is equivalent to 18.5 million tons of carbon dioxide emissions avoided.

According to S&P Global, the findings of the latest analysis for Permian upstream methane, produced in partnership with methane management firm Insight M, are based on high-frequency observation data, including nearly 700 high-resolution aerial surveys covering 88% of the basin’s active wells, to provide the most accurate basinwide estimate of methane emissions.

“The sheer scale of this single-year improvement represents significant progress and demonstrates the potential for what lies ahead,” assesses Daniel Yergin, vice chairman of S&P Global. “Continued improvements in the Permian–an area roughly the size of Great Britain that is responsible for almost half of all U.S. oil output–is providing a path to make meaningful contributions that lower overall U.S. emissions.”

To put the 2023 emissions reduction in perspective, S&P Global says it was:

• More than the total 2023 driving emissions avoided by every EV ever sold in the United States, even if all the vehicles were powered 100% by zero-carbon electricity; and
• Roughly the same as the total GHG emissions from all sources for the state of Hawaii during the same period.

The emissions decline occurred even as total Permian oil and gas production increased, S&P Global notes. As a result, it says the basin’s methane intensity (the ratio of total methane emissions to total output) registered an even more pronounced drop, exceeding 30%.

The analysis attributes the decline to ongoing improvements in equipment as well as increasing deployment of new technologies, ranging from artificial intelligence-driven analysis of operational data to on-the-ground sensors, aircraft overflights and satellites that make it possible to detect leaks with greater speed and accuracy.

“Improvements and increased accessibility of remote sensing technologies are providing a better understanding of U.S. methane emissions and more actionable information,” says Kevin Birn, head of the Center for Emissions Excellence at S&P Global Commodity Insights. “Leaks that previously might have persisted for weeks or months can now by addressed in a matter of days.”

Other findings from the analysis include:

• Methane emissions measured as a percentage of the Permian Basin’s total natural gas output fell 33%.
• Methane emissions constituted 1.36% of the region’s total 2023 production of more than 23 Bcf a day.
• In terms of total energy (barrel of oil equivalent) produced—notable because Permian production is heavily oil-focused, with associated gas occurring as part of the process—the 2023 methane intensity for the basin was 0.63% of total production.
• Regarding lost economic value (i.e., had the gas been captured and sold), 2023 methane emissions accounted for just 0.12% of upstream revenues, a 70% drop from the prior year as gas prices fell relative to oil. While this revenue loss is minor in the context of total revenues, S&P Global says ongoing improvements in technology mean that fixing leaks still can deliver positive returns.

“For oil and gas operators, evaluating spending on methane emissions reductions is a dynamic exercise as technologies and data steadily improve, regulations change, and mitigation progress continues,” says Raoul LeBlanc, vice president of global upstream for S&P Global Commodity Insights. “Obviously, the economics tighten as the leaks get smaller and harder to find. However, detecting and mitigating fugitive methane usually turns a profit simply from the sale of the recaptured gas, even in a lower natural gas price environment.”