What’s Driving Some to Consider a Permian Basin Exit

Analysts share insight on the oil and gas industry’s response to climate concerns and the future of fracking that has led some, like Shell, to consider withdrawing from the Permian Basin plus what opportunities remain for those choosing to stay.

What’s Driving Some to Consider a Permian Basin Exit

Rystad Energy analysts weigh in on why it might be a smart idea economically and environmentally for Shell to exit the Permian Basin altogether. (Source: Collage by Hart Energy; photos from Royal Dutch Shell Plc and Shutterstock.com)

In 2020 the entire E&P industry saw a sharp decline in their total emission levels due to the pandemic, especially in flaring. Although, Rystad Energy’s Jon Erik Remme warned that “there’s lots to be done” in terms of reducing CO₂ emissions, the levels have remained low even with frac activity picking back up.

“We believe this is actually a structural change, really emphasizing the industry’s commitment to gradually eliminating flaring and that the industry is actually taking on the challenge of developing the resources in a more environmentally responsible manner, and that this effect should not be underestimated in any way,” said Remme, who serves as vice president of upstream research with Rystad, during a virtual roundtable hosted by the research firm on July 21.

Remme was joined on the roundtable—“CO₂, CCS and Carbon Tax: Positioning North America for future energy systems”—by Senior Analyst of Emerging Services Research Lein Mann Hansen and host Amir Zaman, head of America’s business development, to discuss the oil and gas industry’s response to cutting CO₂ emissions as well as potential solutions for the future of fracking.

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Madison Ratcliff

Madison Ratcliff is an associate editor for Hart Energy's editorial team.