Cutting Oil and Gas Methane A Key Pillar of Global Climate Strategy, Says IEA

weoToday, the International Energy Agency (IEA) released its latest World Energy Outlook, which projects how global energy systems will evolve between now and 2040 and estimates their relative impact on the climate. This annual report always offers important insight into where some of the world’s top experts see the global energy sector heading. But what’s particularly striking this year is its highlight on oil and gas methane, among other interesting conclusions.

The report confirms and builds on IEA’s findings from earlier this summer — that global emissions could peak by 2020 without slowing economic growth, and that reducing methane emissions from the world’s oil and gas industry is one of the fastest, biggest opportunities to make significant climate progress now.

In particular, the gas chapter includes this important takeaway:

“The oil and gas sector is the largest industrial source of methane emissions, a potent contributor to climate change. Outside North America, the absence of robust policy action in this area represents a major missed opportunity to tackle near-term warming. The available evidence suggests that a relatively small number of emitters may account for a large share of overall emissions, but tracking and fixing these leaks – which can be short-lived and intermittent – requires a systematic effort of measurement, reporting and monitoring, backed up by effective regulation.”

We couldn’t agree more that the case for policy action and industry leadership is strong. Particularly when there are many proven, low-cost technologies in hand to limit methane emissions from leaking and venting equipment along the global oil and gas supply chain.

One recent example is the economic analysis conducted by ICF to assess the methane reduction opportunity in Canada, the fourth largest global emitter of oil and gas methane, according to a Rhodium Group analysis. ICF’s Canada report concluded, in similar fashion to ICF’s U.S. report, that it is highly cost-effective to curb 45% of Canadian oil and gas methane emissions over the next five years.

International attention is growing on the methane issue, and for policymakers and companies looking closely at it, the new IEA report makes five key points:

  1. Methane emissions are a global problem

IEA states very clearly that oil and gas methane comes from all over the globe and from all parts of the value chain: “The oil and gas sector is the largest industrial source of global methane emissions, not just from specific types of gas or oil wells, or from a particular region, but rather throughout the globe and from all parts of the industry.”

  1. Despite data uncertainty, global methane emissions are still huge

There is a lack of global data on oil and gas methane emissions, a gap EDF is helping to fill by undertaking a series of 16 studies to better understand the scope and scale of the oil and gas methane emissions problem in the United States. EDF is proud that several of these methane science studies were cited in IEA’s annual report but improved reporting and additional science work is needed at the international-level to further inform global methane emissions data and the solutions needed to reduce them. However, even with the uncertainty in the data, according to IEA, the amount of gas lost in 2013 was “equal to the gas production of Algeria in 2013.”

  1. Methane is a key climate strategy

Reducing both CO2 and methane emissions is imperative to help reduce global emissions and impacts from climate change. In IEA’s annual report, it stresses that “significant reductions in methane emissions would have the tangible and positive effect of slowing the rate of climate change over the near term, while the effects of parallel efforts to reduce CO2 emissions would be realised over the longer term.”

  1. Solutions exist, but will only be deployed if global leaders act

This is perhaps the most important point IEA makes on oil and gas methane. Companies and policy-makers do not need to wait for technological breakthroughs to reduce emissions. The technologies already exist to bring them down; it is a matter of political will to act. IEA goes on to make two other important points:

  • “Regulations will be required to ensure that best practices are adopted by all companies, not just a few industry leaders.”
  • “There is a need to develop methane reduction goals and quantify progress, exemplified by the U.S. goal to reduce methane emissions by 40-45% below 2012 levels by 2025.”
  1. The scale of possible reductions is staggering and industry’s credibility is at stake

If companies and the global community act and seize the opportunity, it will have a real and sizeable impact on global GHG emissions. The IEA estimates that a 75% global reduction of oil and gas methane would represent a cumulative saving of some 165 Mt of methane emissions. According to IEA, this “would be equivalent to almost half the emissions from worldwide fossil fuel consumption in 2013,” (based on a 20 year global warming potential). That’s a staggering amount of emissions reductions that can be had for relatively low-cost, using current technologies, and without requiring significant changes to the way energy is produced and used.

The opportunity is large, but so too is the potential loss for the global economy if we fail to seize it. Companies, in particular should take note that IEA clearly states that “the potential for natural gas to play a credible role in the transition to a decarbonised energy system fundamentally depends on minimising these emissions.”

Heading into December’s Paris climate talks, policymakers are rightly focused on the commitments that countries have already put on the table — and on negotiating an international agreement that establishes a framework for more ambitious action in the future.  At the same time, we already know that more will be needed: Paris is a beginning, not an end.  Because cutting oil and gas methane offers one of the highest-impact, lowest-cost opportunities to tackle climate change, controlling global methane emissions should and must be part of countries’ climate mitigation strategies going forward from Paris.

IEA has done a commendable job highlighting an overlooked, yet important climate solution. The new World Energy Outlook report paints a clear picture: oil and gas emissions are global, significant, and unlikely to be reduced unless policy makers take action.

With last week’s welcome agreement to begin negotiating a phasedown of hydrofluorocarbons, another important short-lived pollutant, under the Montreal Protocol, oil and gas methane is now the single biggest untapped opportunity to immediately reduce global GHG emissions and slow the rate of warming our planet is experiencing now. IEA has outlined some specific opportunities for how to reduce global oil and gas methane, and we hope to work with companies and governments using this report to meet the promise and potential that reducing these emissions offer.

Image Source: International Energy Agency

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