Originally published on Forbes.com on February 24, 2021

After 10 years, it’s now accepted by most oil and gas companies that methane emissions are bad news. The emissions are mainly leakage of natural gas from wells, from pipelines, and from oil and gas facilities such as gas processing plants.

Most individual leaks are very small but a few big ones can really distort the picture. And tens of thousands of small ones in wells and pipeline miles adds up. Pneumatics which are devices that contain gas under pressure are a big contributor to leakage.

Methane emissions are bad news because they are wasted natural gas that could be sold for $3 or $4 per thousand cubic feet (Mcf.)

Just as serious, maybe more serious, is that methane is a greenhouse gas (GHG) that is worse than carbon dioxide (CO2) in its warming and damaging effect: 21 – 81 times worse depending on the duration of the comparison.

It’s become clear that more regulation is needed to limit methane emissions, something I will discuss further in my next piece.

International view

The International Energy Agency (IEA) in its new 2021 Technology Report says that agriculture globally contributes about a fourth of methane emissions. The energy sector is a close second – including emissions from oil and gas, coal and biofuels.

The oil and gas part is responsible for approximately 2.1 Gigatonnes of CO2-equivalent emissions per year (Gt/yr CO2-eq), which amounts to 5% of total global greenhouse gas (GHG) emissions.  The spotlight points directly at oil and gas companies.

The IEA project that methane emissions will need to fall by 70% from 2020 levels to satisfy their internal Sustainable Development Scenario (SDS) goal to meet the Paris Agreement.

There are commercial aspects of this too. First, if the leaks could be stopped the gas could be sold to help the bottom line. Second, consumers are starting to ask gas producers how good is their record on abating methane emissions – before they agree to buy their gas.

Figure 1. Main sources of man-made methane emissions in the USA: energy, agriculture, waste. Source: EPA.

In the US, methane emissions from the energy sector have been falling in the period 1990–2018 (Figure 1). This is remarkable, since over this period natural gas production in the US has increased by 60%. And most of the increase has occurred since 2005, when shale-gas came onstream. The “facilities” that provide data to the EPA include oil and gas basins, oil and gas companies, gas plants, and refineries, so methane leaks or releases may have fallen in a variety of facilities.

Partnerships are crucial

DNV GL is a company with headquarters in Norway that is concerned with safeguarding life, property and the environment. They collect and analyze data from the oil and gas sector. The combustion of oil and gas product accounts for 75% of the sector’s GHG while only 25% comes from the production and distribution footprint. It’s not how oil and gas industry makes and distributes their product (their carbon footprint) that’s the problem, it’s the subsequent usage and burning of their product by end-users.

In their modeling projections through 2050, DNV-GL predict that global energy-related GHG emissions will be down roughly 50%. But fossil fuels will still be responsible for 74% of the global energy-related CO2 emissions, plus over 80% if CO2 and methane emissions are combined as CO2-equivalents.

DNV-GL insist that coalitions and partnerships are needed to invent and apply new decarbonization technologies. They note:

• “bp, EDF, Eni, Equinor, Shell, Total and Wintershall Dea have collectively made policy recommendations to the EU to standardize methane emissions data collection;
• More than 20 leading oil and gas companies are committed to the Methane Guiding Principles partnership pledged to reduce methane emissions; and
• The Oil and Gas Climate Initiative, the International Association of Oil & Gas Producers, and IPIECA are collaborating toward developing a best practice guideline on detecting, monitoring and reporting such emissions.”

DNV-GL predictions reveal that the energy transition won’t be rapid enough to meet the temperature limits specified by the Paris Agreement. Because of this, governments, investors and society will be forced to make increasing demands on oil and gas to decarbonize the industry.   

The Importance of good data

The Environmental Defense Fund (EDF) have pushed hard on this subject as entities like bp and Shell and ONE Future have committed to reduce methane emissions and report the data. They are involved too with the Oil and Gas Methane Partnership, along with the UN Environment Program to better methane measurement and reporting.

EDF’s report called Hitting the Mark is a roadmap for the oil and gas industry to obtain and report good data on methane emissions. But they also lament that methane emissions data are outdated, inaccurate and unreliable. Some companies use engineering calculations from the 1970s. This must be replaced by direct measurement by way of satellite sensors, airplane flyovers, and ground-based detectors. 

ONE-Future success

A coalition of sixteen natural gas companies, called Our Nation’s Energy Future (ONE Future), was formed in 2014 to address methane leakages. It includes upstream, midstream, and downstream operators. These companies have invested in reducing methane emissions by repairing system leaks in several sectors: production, distribution, transmission and storage, processing, and gathering.

In 2012, the overall natural gas industry’s leakage rates or methane intensity was 1.44%. ONE Future reported that its 2018 methane emissions were down to 0.33%. The 2018 data also reveal that in the production segment, about 70% of emissions were due to pneumatic devices, 9% were due to equipment leaks, and only 7% were due to venting and flaring of associated gas.

What seems to be an impressive success requires caution. According to EDF, the percentages are underestimated due to measurements that are outdated, inaccurate and unreliable, as mentioned above. As EDF have quoted, “In short, the days of estimates and engineering calculations must give way to direct measurement.”

Yet, even if the numbers are underestimated, the trend of lower methane intensity over time is surely valid and an encouraging sign.