A new report by the International Energy Agency highlights the oil and gas industry’s huge methane emissions problem and its persistent failure to tackle it. We look at the issue and why it threatens to be ‘existential’ for the sector.
Global momentum behind climate change mitigation has, once again, brought the high-levels of fugitive emissions from upstream oil and gas into the fore. According to the International Energy Agency’s (IEA) 2021 update of its Methane Tracker, globally, the sector emitted more than 70 million tonnes (mt) of methane into the atmosphere in 2020. This is broadly equivalent to the total energy-related CO2 emissions from the entire EU.
The sector has been persistently poor at tackling these emissions, which tend to occur by flaring, venting, or undetected leaks. Discharges of methane, which is 84 times more potent as a greenhouse gas than carbon dioxide, did actually fall in 2020 by an estimated 10% compared to the previous year. However, the IEA found that this was due to producers slashing output in response to the historic shock of the Covid-19 crisis, rather than industry action.
A 2020 report looking at anti-flaring policies highlights that by 2010, flaring had fallen by 20%, but that there has been no overall decline ever since, even after the collapse of oil prices in 2014. This is despite emission reduction pledges by several major oil and gas companies.
Inertia in tackling the problem
Governments are finalising the details of their net-zero roadmaps and Jennifer Cogburn, gas Americas lead at BloombergNEF, says that the industry faces a ‘reckoning’ in regards to methane emissions and flaring, which is currently largely unregulated.
“Cleaning up that aspect of the supply chain will be important for decarbonisation,” she says.
Similarly, Maarten Wetselaar, integrated gas and new energies director at Shell, speaking at the Energy Institute’s (EI) International Petroleum Week (IP Week) in February, said that the issue could become ‘existential’ for the sector if not tackled.
Previously, it had been hard to measure fugitive leaks from oil and gas operations, but technology is getting better. GHGSat Inc, a Canadian company that hopes to become the global reference for remote sensing of greenhouse gases, uses satellite technology to monitor leaks.
In February, the company detected a discharge of methane of as much as 10,000kg per hour, for several hours, from at least eight natural gas pipelines and unlit flares in central Turkmenistan. Drones and modern, low-cost sensors can also be used to detect leaks.