REPORT: Methane from Worldwide Oil & Gas Operations a Major Climate Change Contributor, Also Untapped Opportunity for Countries to Hit Emission Goals
Leaking natural gas has greenhouse impact equal to 40 percent of world coal use; Cutting Emissions Offers Immediate Benefit as Long Term Carbon Focus Continues
(AUSTIN, TEXAS – April 21, 2015) A new analysis by the Rhodium Group commissioned by the Environmental Defense Fund says the 20-year climate impact of methane escaping from oil and gas operations worldwide is equal to the carbon dioxide emissions from 40 percent of total global coal combustion. That’s because methane, the main constituent of natural gas, packs over 80 times the warming power of CO2. But the authors say methane is also a crucial and largely untapped opportunity for countries seeking to set or meet greenhouse emission targets.
Approximately 3.5 trillion cubic feet (Tcf) of gas worth about $30 billion escaped from oil and gas sector operations in 2012, according to the report – about the same amount of gas produced that year by Norway, the world’s seventh largest producer. Without action, the authors estimate that these emissions will increase 23 percent by 2030, versus a 15 percent increase in energy-related carbon dioxide emissions projected by the International Energy Agency.
“Methane is potent and fast-acting, and it’s a major problem. But cutting methane emissions is an equally powerful, and often very cost effective way for countries to achieve immediate climate benefits while they work on long-term carbon dioxide goals,” said EDF Associate Vice President Mark Brownstein. “Until now, that opportunity has been mostly overlooked, which means there is a lot of low-hanging fruit to be harvested.”
In the run-up to international climate negotiations in Paris next December, the White House announced last month that the U.S. will reduce total greenhouse emissions to 26 to 28 percent below 2005 levels by 2025, specifically emphasizing plans announced in January to cut oil and gas methane emissions 40 to 45 percent from 2012 levels by 2025. The U.S. is the only country so far to announce an oil and gas methane goal, but EDF is encouraging others to follow.
Based on the 20-year global warming potential – a standard measure reflecting methane’s strong short term effects – oil and gas methane emissions represented eight percent of worldwide greenhouse gas emissions in 2012 (5,650 metric tons of carbon dioxide equivalent). Calculating the effects over a 100-year timeframe, methane escaping from the sector in 2012 was about equal to the emissions of Russia, the world’s seventh largest GHG emitter.
Bottom-up emissions factors by countries in reporting their greenhouse gases to the UN (and in this study) are thought by many scientists to underestimate total emissions. The report, Untapped Potential: Reducing Global Methane Emissions from Oil and Natural Gas Systems, encompasses the full oil and gas supply chain, from the well to the customer’s meter. It is available here.
“Unless methane emissions from oil and natural gas systems are taken into account, the overall greenhouse gas benefits of natural gas will be overestimated,” said Rhodium Group Director Kate Larsen, the report’s lead author. “It will be essential for countries to integrate better measurement and management of oil and gas methane emissions into their climate policies to ensure their overall greenhouse gas effectiveness”
The majority of oil and gas methane leakage comes from a handful of countries: the top seven emitting countries were responsible for over half of the global total in 2012; the top 30, including the EU, accounted for three quarters. Despite the huge scale of the methane loss, very few have taken steps to regulate leakage from the oil and gas sector, or set specific goals to reduce emissions in the future. But the benefits of doing so would be considerable.
“If the top 30 countries on this list were to reduce emissions 50 percent by 2030, it would save about two trillion cubic feet of natural gas that’s now being wasted every year,” said Drew Nelson, Senior Manager in the EDF natural gas program. “Over the next 20-years, the effect would be the same as eliminating all carbon dioxide from burning coal in India and the EU. Reducing oil and gas methane emissions is something countries should focus on as they prepare their intended nationally determined contributions ahead of the Paris negotiations.”
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Rhodium Group (RHG) combines policy experience, quantitative economic tools and on-the-ground research to analyze disruptive global trends. Our work supports the investment management, strategic planning and policy needs of clients in the financial, corporate, non-profit and government sectors. RHG has offices in New York, California and Washington, and associates in Shanghai and New Delhi.