Energy Exchange: Global methane

For years, people used satellites to observe the Earth’s climate. Now, orbital sensing offers a crucial new way to protect it, by giving us new abilities to identify, measure, and ultimately verify cuts in emissions of methane – a highly potent greenhouse gas. Two new pieces of research led by EDF scientists demonstrate the growing […]

Last night, Canada finalized new national regulations on methane emissions from the oil and gas industry, its largest methane polluter. The rules are among the most comprehensive in the world, putting Canada on a clear path toward its 40 to 45 percent methane reduction goal, and delivering on a critical element of the Canadian climate […]

This post was co-authored by Dr. Daniel Zavala-Araiza. New direct emissions data from oil and gas fields in Alberta should be a warning to regulators in Ottawa and Edmonton as they each prepare their methane regulations. A new study concluded that oil and gas methane emissions are 15 times higher than industry reports for 60 […]

By Zhang Jianyu, China Managing Director, and Mark Brownstein, Vice President, Climate & Energy Every November, the International Energy Agency publishes its annual World Energy Outlook – a comprehensive assessment of the economic, technological and geopolitical trends shaping world energy markets. That makes it essential reading for anyone interested in preserving the Earth’s climate. This […]

This post originally appeared in Spanish on El Universal. Not often is a pollutant referred to as an environmental and economic opportunity. But that’s exactly what methane is for countries looking for cost-effective climate solutions and a way to prepare for the 21st century energy economy. And it’s especially important for Mexico right now, as […]

The International Energy Agency’s new 2017 World Energy Outlook contains the agency’s strongest language yet about the urgent need to reduce methane emissions from the oil and gas sector, and the huge opportunities that exist to do so. Some have taken issue with IEA projections on the overall role of natural gas, suggesting they are […]

This post was co-authored by Drew Nelson.  The CEOs of ten leading oil and gas companies today announced intentions to move toward “near-zero” methane emissions, pledging to set a quantitative reduction target by this time next year. At first blush, it might sound like a modest step – a promise to make a promise. In […]

Q&A with Tim Goodman, Hermes Investment Management When burned, natural gas produces half the carbon as coal, so it is often touted as a “bridge” fuel to a cleaner energy future. But the carbon advantage of natural gas may be lost if too much of it escapes across its value chain. Natural gas is mostly […]

This week, the oil and gas giant Shell took a positive step toward addressing methane emissions. The company announced a new technology trial at a wellsite in Alberta, Canada, where it is piloting a specially designed laser to continuously monitor emissions of methane, a powerful pollutant known to leak from oil and gas equipment. The […]

This week, oil and gas giant Shell announced the launch of a technology pilot at one of its shale gas facilities in Canada that will continuously monitor methane levels and provide real-time leak detection to facility operators. This is a big deal and shows what can happen when companies, environmental groups and innovators work together […]

Institutional investors worldwide are increasingly encouraging oil and gas companies to improve and disclose their management strategies to minimize methane risk. Methane – an invisible, odorless gas and main ingredient in natural gas – is routinely emitted by the global oil and gas industry, posing a reputational and economic threat to portfolios. Natural gas is widely marketed […]

Two studies released this week make it clear that Canada’s push toward methane regulations for the oil and gas industry is a smart move. And, while data of Canada’s oil and gas methane problem is still limited, these studies reinforce what research of the U.S. oil and gas industry found: oil and gas facilities are […]

Following energy reform in 2013, oil and gas industry expansion in Mexico is moving full steam ahead. The first round of bidding for Mexico-owned deep-water oil leases wrapped last December, ushering in a slew of private companies like ExxonMobil and Chevron for the first time since the 1930s. Additional leases for land that will become […]

A raíz de la reforma energética en 2013, la expansión de la industria del gas y del petróleo ha crecido rápidamente. La primera ronda de licitaciones para el arrendamiento de petróleo en aguas profundas mexicanas terminó en diciembre, marcando el inicio para una serie de compañías privadas como:  ExxonMobil y Chevron, por primera vez desde […]

Last November, on the same day the Paris climate agreement took effect, 10 of the world’s largest oil and gas companies, including BG Group, BP, Eni, Pemex, Reliance Industries, Repsol, Saudi Aramco, Shell, Statoil and Total, announced a billion-dollar investment in climate solutions. Together, the member-companies of the Oil and Gas Climate Initiative (OGCI) produce […]

U.S. states are accelerating steps to reduce oil and gas air pollution. Just last week Ohio – which has a Republican Governor, and Republican-controlled Senate and House – joined the list of states targeting oil and gas emissions with a new methane policy that requires operators to check for leaks at compressor stations four times […]

By Mark Brownstein

With 2016 on pace to be the hottest year ever recorded, it’s never been more urgent for countries to work together to protect our climate. Europe, with its long history of climate leadership, has a pivotal role to play in driving the next wave of efforts.

European leadership was central to achieving the historic Paris Climate Agreement, as well as recent breakthrough agreements on carbon dioxide emissions from aviation and hydrofluorocarbons (HFCs) in refrigerators and air conditioners.

But there is one critical climate opportunity still to be taken on in Europe, and that’s methane – one of the biggest levers we have today to slow the rate of warming.

The other important greenhouse gas

Methane is a powerful greenhouse pollutant, over 80 times more powerful than carbon dioxide during the first 20 years it hangs around in the atmosphere. In fact, scientists say methane accounts for around 25% of the warming experienced today.

Accumulation of CO2 in the atmosphere determines the amount of warming our planet will experience; reducing it now lowers the chance of long-term catastrophic climate change. Cutting methane affects the rate of warming, decreasing the probability of intense heat waves and slowing rapid sea level rise. That’s why an effective climate strategy requires action to reduce both carbon dioxide and methane.

Shrinking the methane footprint

Natural gas is mostly methane, and globally the oil and gas sector is one of its largest contributors. Curbing methane across this industry is also the single biggest, most affordable opportunity to eliminate a sizable chunk of these emissions.

Across the supply chain, tens of millions of tons escape each year. In 2012, the industry leaked as much methane as was produced by Norway, the world’s seventh largest producer. Losses would be higher if they included wasted gas now burned off in flares rather than put to productive use.

A recent study concluded that methane from fossil fuel development is up to 60% greater than previously estimated. This mirrors new measurements in the United States that strongly indicate the same. Without action, experts say, emissions will climb by more than 20% worldwide by 2030.

Natural gas is widely marketed today as a low-carbon fuel, emitting roughly half the carbon dioxide of coal when burned. But that ignores the methane problem. Consequently, whether gas can truly be seen as a greener substitute for coal and oil  remains in question until the methane that is emitted is fully measured, regularly monitored and significantly reduced.

If the world were to cut oil and gas methane emissions by 45% by 2025, as the United States, Canada and Mexico recently agreed to do, it would have the same climate benefit over 20 years as closing one-third of the world’s coal plants.

Untapped opportunity for Europe

The International Energy Agency says oil and gas methane emissions are among five key pillars to reduce global greenhouse emissions. Fortunately, there are cost-effective strategies to reduce these emissions, creating important opportunities for countries and companies trying to meet their greenhouse-gas goals.

Curbing oil and gas methane requires little in the way of new capital or fundamental changes in business practice. Often, it’s as easy as tightening valves and repairing leaks. In places like the state of Colorado, where industry reductions are required, companies are finding that the benefits outweigh costs of regularly checking for leaks.

Europe is a central player in the global oil and gas industry. Four of the world’s top 15 gas-producing corporations are headquartered in Europe, with the continent producing 8% of the world’s natural gas. Presently, Europe is the largest gas importer, globally, and the IEA predicts the continent’s gas to rise over the next decade. For its emissions, official inventories rank total EU oil-and-gas methane higher than those reported for Iran or Saudi Arabia.

Taking the next steps

In May, the five Nordic states committed to developing a global target to reduce oil and gas methane. It’s a step, but we need greater European ambition to seize the full climate benefit offered by reducing methane emissions.

European companies have begun engaging more in the methane challenge. BP, Engie, ENI, Repsol, Statoil and Total have all expressed concern about methane. They’ve started surveying parts of their operations for emissions and disclosing that information. But so far only a few European companies have an action plan to reduce their global methane emissions, and none have specific reduction targets. All of them should be doing both.

Likewise, European nations inside and outside of the European Union should revise and implement national standards for oil and gas methane and incorporate measures into commitments for achieving the greenhouse reductions agreed to in Paris. And while Europe’s data suggest that its oil and gas methane emissions have declined, studies have shown such estimates to routinely undercount emissions. Europe could also be instrumental in developing a worldwide oil and gas methane goal, building on the Nordic commitment and cultivating support in other parts of the world, similarly to how it led the international community in setting limits on global aircraft and refrigerant industry emissions.

In a world where we are looking for every available tool to reduce greenhouse gas pollution and stay below dangerous climate thresholds, we can’t afford missed opportunities. Europe can affect real change in the oil and gas industry and reduce methane emissions, showing once again that it can propel a global community forward on climate solutions.

This post originally appeared on The Economist Intelligence Unit Perspectives blog.
Image source: David Wright, Geograph

By Mark Brownstein

The Oil and Gas Climate Initiative, a group of 10 oil and gas CEOs representing 25 percent of the industry’s global production, came together in London today to sign an agreement committing to invest $1 billion over the next ten years to accelerate commercial deployment of low carbon energy technologies. Their primary focus will be carbon capture and storage and reducing oil and gas methane emissions.

Not coincidentally, this accord comes the same day that the Paris Climate Agreement enters into force.

Is $1 billion enough? Of course not. The emission reduction goals the world has set in Paris require nothing less than a fundamental transformation of our global energy system. We must dramatically reduce the total amount of fossil fuels we use – coal, oil, and natural gas – and dramatically ramp up deployment of renewable resources – solar, wind – and aggressively pursue energy efficiency and vehicle electrification.

Jeremy Legget, chairman of the Carbon Tracker Initiative, points out that “the world has to mobilize trillions of dollars a year for clean energy” within a 10 year time frame if the Paris goals are to be realized. Collectively, the ten OGCI CEOs signing today’s accord already plan to spend more than $90 Billion in capital this year alone just doing business as usual, so even by the standards of their own capital budgets, a $1 billion commitment over a decade is a drop in the bucket.

As Global Leaders Step Forward, U.S. Companies Dig In

But make no mistake, the OGCI accord is a big deal. I say this for two reasons. First, a core group of the world’s largest oil and gas companies are now squarely on record in support of the Paris goals. And the OGCI is more than just a European old boys club. Besides leading European producers like BP, Shell, and Total, the group includes China National Petroleum Company, Saudi Aramco, and Mexico’s PEMEX (and the CEO of BP happens to be an American).

The global oil and gas industry may not yet be playing to full potential, but they are now clearly in the climate game, and that deserves applause.

It’s equally important to note that not a single American-based oil and gas producer has joined this initiative. This speaks volumes about just how out of step the U.S. oil and gas industry is with global peers. If I were an investor, I’d be worried about whether the U.S. companies are taking the necessary steps to survive in the new energy future. Today’s announcement certainly suggests they are working hard at being left behind.

Methane in the Mix

The new OGCI accord is also significant in that it specifically highlights the importance oil and gas methane emissions. Methane is responsible for 25 percent of the warming our planet is experiencing today, and the global oil and gas industry is a major source of these emissions. EDF’s work on this issue in North America has shown over  and over again that there abundant, low cost opportunities for the industry to make major methane reductions, and we expect the same is true is globally.

OGCI’s express commitment to pursue better science on the magnitude and sources of oil and gas methane emissions is important. The scientific studies we’ve been part of in the United States clearly show that the official U.S. government methane inventory was understating the magnitude of the problem. A global effort to better measure and report oil and gas methane emissions is likely to show similar results.

Transparent Accounting, New Measurement Technology

Better data and greater transparency is critical to understanding the full dimensions of the problem and achieving accountability for both emissions and reduction commitments. The 10 OGCI companies assert that they have already achieved a 55% reduction in their methane emissions since 2008. But absent greater disclosure of both the methods of data collection and the data itself, we have no way of knowing whether this is true. Parallel efforts, like the Oil and Gas Methane Partnership (OGMP) should help improve the quality and transparency of oil and gas methane data, but OGCI’s commitment to better science is essential.

Similarly, the OGCI commitment to pursue the commercialization of methane reduction technologies and practices can only help make a low-cost reduction opportunity even more affordable, paving the way for methane emission reductions beyond what we know to be cost effective today. Several OGCI members are participants in our Methane Detectors Challenge, which is pioneering innovative methane detection technology that can lower the cost of leak detection and repair at oil and gas facilities, one of the most critical methane reduction strategies we know of.

The three countries of North America – Canada, the United States, and Mexico – have each committed to achieving a 40-45% reduction in oil and gas methane emissions by 2025. To put that in context, a 45% reduction in global oil and gas methane emissions will have the same impact on the climate over 20 years as closing one-third of the world’s coal fired plants. OGCI’s efforts to lower the cost of reducing oil and gas methane emissions could enable us to get beyond to a 45% reduction and beyond, even faster, and at less cost.

CO2 + CH4

Let’s be clear. The global oil and gas industry must take aggressive action to reduce methane emissions and carbon dioxide emissions simultaneously. Both are essential. There is no avoiding the fact that are limits to how much fossil fuels can be burned consistent with achieving the goals of the Paris Agreement. No amount of methane emissions reductions will change this essential fact.

But OGCI’s commitment to reducing oil and gas methane emissions demonstrates that leading global oil and gas companies are aware of the necessary steps that need to be taken to slow the rate of warming now, even as they wrestle with the transition to a fundamentally lower carbon energy future over the long term. We’re ready to help them do both.

By Mark Brownstein

Vocal opposition from parts of the oil and gas business against policies to limit the industry’s heat-trapping methane emissions can sometimes obscure emerging efforts by some companies to tackle one of the sector’s biggest environmental and reputation challenges – and one that’s becoming ever more prominent by the day.

But not everybody in oil and gas is digging in their heels. In fact, there’s a growing list of companies working in various ways to start solving the problem. None of these initiatives alone is likely to get us where we need to be. But together they’re helping pave the way toward a more comprehensive answer that levels the playing field by creating sensible performance standards for everyone in the industry.

One of these emerging efforts is the Oil and Gas Methane Partnership, a voluntary effort to improve emissions reporting and accelerate best practices to reduce methane. Launched at the 2014 United Nations Secretary General’s Climate Summit, OGMP includes BP, Eni, Pemex, PTT, Repsol, Southwestern Energy, Statoil, and Total. The companies agreed to seek out ways to survey, assess and disclose their methane emissions, and find new opportunities to reduce them.

Journey Begins with the First Step

The OGMP recently issued its first annual report, detailing emissions found in nine key sources categories throughout individual operator’s systems. As a serious collaborative effort by oil and gas companies to address methane, it constitutes a solid, strong step toward development of sector-wide best-practices to cut these emissions.

For example, Southwestern Energy reduced emissions more than 11,000 metrics tons by instituting best practices during the phase after a well is drilled and hydraulically fractured, routing more gas to sales rather than venting it to the atmosphere. Elsewhere, Statoil conducted a methane mapping exercise spanning all Norwegian offshore operations (comprising nearly 90% of the company’s upstream assets).

OGMP’s efforts to increase transparency and responsibility are an example others should follow. And indeed, OGMP welcomed its newest participating company Engie, a global integrated energy company, as part of the release of its first-year emissions report – an encouraging sign that the initiative is taking broader hold.

Now the second and most important phase of the companies’ work must begin. More participants should be ramping up the share of their facilities entered into the OGMP program, and all expand the emission reduction activities they’re applying to those facilities.

Plucking Ripe Opportunities

The International Energy Agency says oil and gas methane emissions are among five key pillars to reduce global greenhouse emissions, and that methane emissions must be minimized if natural gas is to have potential to play a constructive role in the transition to a decarbonized energy system.

Fortunately, there are cost-effective strategies to reduce these emissions, creating important opportunities for countries trying to meet their greenhouse-gas goals, as well as for companies looking to reduce product waste while demonstrating more responsible stewardship.

Curbing oil and gas methane generally requires little in the way of new capital or fundamental changes in business practice. Often, it’s as easy as tightening valves and repairing leaks. In places like Colorado, where industry reductions are required, companies are finding that the benefits outweigh costs of regularly checking for leaks.

Follow the Smart Money

With new temperature records being set around the world on a monthly basis, business and policy leaders are demonstrating renewed urgency to reduce greenhouse emissions of all kinds. crucially, investors are also watching much more carefully to see how energy companies are responding, making methane management one more opportunity for competitive advantage for leaders  – or for those that lag behind.  (For more on this, see our latest guide for investors, just released last month.)

Carbon dioxide remains the key to long term climate protection, but methane – which is responsible for about a quarter of the warming we’re experiencing – represents both a major threat and a huge, highly cost effective opportunity to achieve much-needed results quickly. The smart money leaders in oil and gas are the ones taking the challenge seriously.

By Steven Hamburg

We’ve all seen TV detectives dust a scene for fingerprints. In a study in the journal Nature, a team of scientists did something similar, using carbon isotopes to identify the “fingerprints” of methane– one of the world’s most powerful climate pollutants in the atmosphere.

The study examined the isotopic signature from two types of methane emissions: biogenic (sources like wetlands, landfills and agriculture) and thermogenic (encompassing geologic seepage, activities associated with the oil and gas supply chain or coal mines).

The evidence suggests that not only are we significantly underestimating the share global methane emissions from thermogenic sources, we’re also underestimating how much comes from the production, delivery and use of oil and gas and the production of coal.

According to the study:

“After accounting for geological seepage, emissions attributable directly to the global fossil-fuel industry (natural gas, oil and coal production) are 20–60% higher than in current global inventories."

The findings mirror results of many of the studies of methane emissions from the natural gas supply chain coordinated by EDF, which also found that overall levels of methane coming from U.S. oil and gas production and delivery infrastructure were higher than previously thought. In one of those analyses – which included the use of diverse types of measurements – emissions were nearly double what the Environmental Protection Agency had previously estimated. It provided some the critical information leading to the agency’s recent 34% upward revision of oil and gas methane emissions..

This latest research published earlier this week indicated that we have also been consistently underestimating oil and gas methane emissions on a global scale as well. This research also adds an important data set to an ongoing scientific debate on the causes of the almost decade-long increase in atmospheric methane concentrations.  Resolving the competing explanations for this increase will take some time, but this debate in no way diminishes the importance of taking action now to reduce anthropogenic emissions so we can begin to slow the rate of warming.

Rising Tide of Production Offsets Gain from Better Management

The authors estimate that over the past 30 years, global emissions from the oil and gas industry have fallen from 8% of production to about 2%, and they speculate this decline is the result of better practices and improved technology. But those gains have been overwhelmed as production has soared.

“Natural gas industry improvements associated with management practices, technology, and replacement of older equipment have been credited for reducing CH4 leakage in the past. The global observations used in our study confirm this trend, but the industry improvements have been offset by increased NG production.”

The authors of the latest study concur with our earlier results, indicating that policies are needed to keep the trend in emissions moving downward on a worldwide basis.  While the data suggests that the proportion of natural gas lost to the atmosphere has gone down, it is still far higher than is required to reduce the rate of global warming, let alone stop it.  The good news is cost-effective technologies are available that can continue to reduce methane emissions from the natural gas supply chain .

Opportunities to Act

Scientists are shining a bright light on a powerful climate pollutant during a time when nations across the globe are taking action on climate. Earlier this week the European parliament approved the Paris Climate Deal, which brought the Paris agreement into force, a critical step toward effectively addressing climate change.

Because methane is the second largest contributor to global warming, for any effort to combat climate change to be effective it must include reductions in methane emissions.

Let’s be clear, oil and gas industry’s methane fingerprints aren’t the only ones causing global warming. But those emissions deserve attention not only because they are significant but because they are among the easiest to reduce.

Mounting scientific evidence – this study included – makes it clear that we have the data to support action to reduce oil and gas methane emissions, and we have the technologies to make significant emission reductions happen now.