By Robert Tuttle
While Chico-Martinez generates a fraction of California’s output, it illustrates a dilemma for a state striving to be a leader in slashing carbon emissions. Increasingly, California’s aging oilfields require ever more energy-intensive drilling methods, spurring environmental concerns and boosting fuel prices under a decade-old state program.
“They are a little bit chasing their tails on where to go while maintaining their climate leadership,” Deborah Gordon, senior fellow at the Watson Institute for International & Public Affairs, said by phone. “We do know that as oil fields age, they tend to get more carbon intense.”
Under the state’s Low Carbon Fuel Standard program, refiners must purchase credits from producers of lower carbon-emitting fuels — including ethanol and biodiesel — to offset production of the higher-emitting motor fuels derived from crude. Those costs are then folded into the price of gasoline.
The state’s goal is to cut carbon intensity of all transportation fuels by 20% by 2030. But the oilfields are an outlier.
Producing the average barrel of California crude generates about 17 grams of carbon dioxide per megajoule of energy versus 11 grams for oil brought into the state from places such as Alaska, Saudi Arabia, Iraq and Ecuador, according to state data.
Wells in the 640-acre Chico-Martinez field were acquired by a unit of Norway-based Crudecorp ASA about a decade ago. In 2012, the company began injecting steam, according to state data. Production rose to about 537 barrels a day, with about three barrels of steam being injected for each barrel of crude produced. But by 2015, that increased to ten barrels of steam for each oil barrel, even as the initial production surge subsided.
That gave the field the highest steam-to-oil ratio in the state, according to Dave Clegern, a spokesman for the California Air Resources Board. The field produced about 253 barrels a day in March, state data show.
In data published this month, a barrel of Chico-Martinez crude yielded 48.1 grams of CO2 per megajoule, up from 3.8 grams when the data was first published in 2012. The numbers include emissions recorded from the time a well is identified, to its drilling and the transport of oil to a refiner.
This year, the company stopped all use of gas-fired boilers as of the first quarter, reducing its carbon intensity score to 5 grams of CO2 per megajoule, Geir Utne Berg, Crudecorp’s chief executive officer, said in an email.
The Chico-Martinez operations were closed for about three years prior to the end of 2018 with no gas usage, the CEO said. The field’s ramp-up in 2019 resulted in low output that required a higher steam-to-oil ratio, he said.
Additionally, Utne Berg said, “We are working diligently to reduce our emissions through the cap and trade program.”
California’s oil fields have a long and proud history. In 1903, the state was the leading crude producer in the U.S., and it traded that standing back and forth with Oklahoma through 1930. It’s now the seventh-most productive state, with aging fields that generate about 440,000 barrels a day, down from more than a million barrels 35 years ago.
“The reality is the oil production is going down so in effect they are switching to lower carbon feedstocks,” Daniel Sperling, Professor of Civil and Environmental Engineering at the University of California at Davis, said by phone. “We are using more oil total and producing less of it in California.”
Methods similar to those used at Chico-Martinez are also employed at other California fields, including Midway-Sunset and Belridge South, each producing about 54,000 barrels a day.
While these methods help slow the decline in output, they have drawn the ire of environmentalists and the state’s Democratic Governor Gavin Newsom.
Last November, Newsom placed a moratorium on applications to use high-pressure steam flooding and ordered applications for hydraulic fracturing be independently reviewed. The move came after crude seeped to the surface from Chevron Corp.’s operations in Kern County. The governor’s office didn’t respond to an emailed request for comment.
Not everybody thinks the situation is as bad as it appears. The California Independent Petroleum Association, a trade group representing state oil producers, disputes the method, called the Oil Production Greenhouse Gas Emissions Estimator, used to calculate carbon emissions from oil fields.
It’s “an educated guess, but still just an estimate even though operators report actual emissions data,” spokeswoman Sabrina Lockhart said in an email, calling the model used in determining emissions “outdated.”
It is “overestimating the carbon footprint of California crude production,” she said, and “at least one oil field was off by 800%.” Producers also seek to reduce emissions in other ways, including purchasing biogas to offset the natural gas they burn, a practice that is currently restricted, she said.