Last Friday, the incoming head of the International Energy Agency (IEA), Faith Birol, provided a briefing to U.S. stakeholders about IEA’s new special report on climate change, which found that global emissions could peak by the end of this decade without reducing economic growth. The report outlines five key pillars for turning the emissions corner by 2020, and importantly, one of the pillars is reducing methane from the oil and gas sector. The report‘s finding that the scale of potential reductions from oil and gas methane is about the same as the reductions from renewable energy underscores the impact that action on methane can have.
IEA’s report is the latest in a stream of recent analyses illustrating the enormous potential for methane reductions to slow climate change. This is because methane has such a powerful short-term impact on the climate, with 84 times more warming power than carbon dioxide over a 20-year timeline. And, the report also highlights the significant opportunity that exists in implementing cost-effective, commonsense measures to cut these emissions, which many governments and companies have not yet taken advantage of.
A recent report conducted by the Rhodium Group, commissioned by EDF, shows the global scale of methane leaks is staggering. In 2012, the amount of oil and gas methane leaked was equivalent to the gas production of Norway, the world’s seventh largest gas producer, representing over $30 billion of revenue that literally vanished into thin air. But this is more than just an economic and energy security issue — because of methane’s potency, that lost gas had the same short term climate impact as 40 percent of global carbon dioxide emissions from coal combustion.
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But the good news is that reducing this overlooked source of warming can be quite cheap. A recent study looking at U.S. oil and gas operations found that methane emissions can be reduced by 40 percent for only one penny per MCF of gas using technology that is already available. In the briefing, IEA also noted that the additional investment needed by the oil and gas industry to nullify oil and gas methane emissions is less than 1 percent of current investment.
This combination of cost-effective actions that have a significant positive impact on the climate is what led IEA to include reducing oil and gas methane as one of the most important and pressing actions we can take to make a dent in climate impacts.
While we have seen some recent actions from governments and companies, much more is needed to help emissions peak. In the lead-up to Paris and beyond, policymakers and industry leaders should take note of these findings and ensure that addressing oil and gas methane emissions is included in national actions. While it is laudable that Canada, Mexico and the U.S. specifically included these emissions in their climate pledges (INDCs), each country should also issue strong regulations to ensure that they achieve these reductions as soon as possible. Doing so will provide a powerful signal to the international community regarding North America’s leadership and commitment to this important issue.
For the U.S., the administration’s recently announced goal to reduce methane emissions 40 to 45 percent by 2025 is a critical step toward cutting potent methane emissions from the country’s oil and gas industry. However, that target must be supported by effective regulation of methane emissions from both new and existing oil and gas operations. Proposals by the U.S. Environmental Protection Agency and the Bureau of Land Management due later this summer are expected to be a first step in this direction.
Additionally, companies in the oil and gas sector shouldn’t wait for regulations to force them to act; they should lead on containing methane emissions. Some companies are already taking action: BG Group, ENI, PEMEX, PTT, Southwestern, Statoil and Total have joined the United Nations’ Climate and Clean Air Coalition Oil & Gas Methane Partnership (OGMP), which aims to have companies report and reduce their methane emissions. There’s a broad need and opportunity for all operators to measure, report, and reduce their emissions. Other leading companies like Shell and BP should also join the OGMP and add their knowledge and experience to this effort.
Research by EDF and others has provided a deeper understanding of both the methane problem and its possible solutions, so it’s gratifying to see the IEA elevate methane as a key issue for Paris. Now it’s time for countries and companies to develop actions to address emissions.
Image Source: International Energy Agency
