The International Energy Agency (IEA) has warned that global methane emission will rebound strongly without greater action from companies, policymakers and regulators.
The agency revealed that methane emissions from the oil and gas industry fell by about 10 per cent in 2020 as producers slashed production.
Methane is a much more potent greenhouse gas than carbon dioxide and thus a major contributor to global warming.
The IEA’s 2021 update of its Methane Tracker points out oil and gas operations around the world emitted more than 70 million tonnes of methane into the atmosphere last year alone. This is about the same as the total energy-related CO2 emissions from the whole European Union.
The new IEA analysis indicates that methane emission dropped largely in 2020 because companies produced less oil and gas, not because they tried harder to avoid methane leaks.
Thus, there is clearly a risk that last year’s downward trend caused by COVID-19 lockdowns and stilted travel globally, will be reversed as production increases to fuel a rebound in global economic activity.
Dr Fatih Birol, IEA executive director: “The immediate task now for the oil and gas industry is to make sure that there is no resurgence in methane emissions, even as the world economy recovers, and that 2019 becomes their historical peak. There is no good reason to allow these harmful leaks to continue and there is every reason for responsible operators to ensure that they are addressed.”
“Alongside ambitions efforts to decarbonise our economies, early action on methane emissions will be critical for avoiding the worst effects of climate change. There has never been a greater sense of urgency about this issue than there is today. To help accelerate these efforts, the IEA is today releasing a ‘how-to’ guide that governments and regulators can use to bring down methane emissions from oil and gas operations,” explained Birol.
IEA analysis highlights that reducing methane emissions is very cost-effective for oil and gas companies. Unlike CO2, there is already a price for methane everywhere in the world – the price of natural gas. This means the cost of improving operations or making repairs to prevent leaks can often be paid for by the value of the additional gas that is brought to market.
“We believe that industry must active, visibly and quickly. But there is also a strong role for government policies to incentivise early action by companies, push for transparency and improvements in performance, and support innovation in getting results,” said Birol.
The new IEA report, Driving Down Methane Leaks from the Oil and Gas Industry; A Regulatory Roadmap and Toolkit, offers a step-by-step guide for anyone trying to develop or update regulations on methane. Its advice draws on analysis of how more than 50 countries, states or provinces from the United States to Nigeria, have tackled methane emissions from a regulatory perspective.
“In this crucial year for climate action leading up to COP26 in Glasgow in November, this is the moment for governments to raise ambition not only on CO2 but also on methane. One important avenue, especially for countries with large oil and gas sectors, will be to include commitments on methane in their new or updated pledges in advance of the COP meeting. This is also the moment for companies to put all their weight behind this effort,” said Birol.
The case for action is not just environmental or reputation, but also economic. There are increasing signs that consumers are starting to interrogate the emissions profile of different sources of gas when deciding what to buy. A gas producer without a credible story on how they will cut down their methane emissions is taking a commercial risk.