In its dire warning about impending climate disaster absent rapid emissions reductions, the Intergovernmental Panel on Climate Change (IPCC) singled out methane as a particularly damaging source of global climate pollution.
As an extremely powerful greenhouse gas, methane plays an outsized role in fueling climate change. By the same token, slashing methane from the oil and gas sector also presents very low-hanging fruit, offering the opportunity for quick and easy wins for the climate.
The methane problem
Methane is more than 80 times more powerful a greenhouse gas than carbon dioxide, making it an urgent priority in the fight to reduce emissions. The IPCC found that methane concentrations in the atmosphere are higher than at any point in the past 800,000 years and are tracking close to some of the high-emissions scenarios laid out years ago.
Methane is more than 80 times more powerful a greenhouse gas than carbon dioxide
The one optimistic aspect of methane is that it breaks down much more quickly than CO2, and a result, offers an opportunity to rack up some progress in short order. A study from earlier this year shows that an all-out effort to curb methane emissions could result in a 50 percent reduction in emissions within ten years, and half of those reductions could incur no cost. The payoff would be enormous – a 0.25 to 0.5 degrees Celsius in avoided warming by mid-century from methane reductions alone.
One of the largest sources of methane pollution, unsurprisingly, comes from the oil and gas sector. Methane leaks up and down the supply chain – at drill sites, compressor stations, valves, distribution lines, pipelines, storage tanks, LNG terminals, and more. Basically, any infrastructure carrying or holding natural gas or crude oil can leak methane.
The leaks are also geographically widespread, with evidence of higher-than-expected methane emissions in U.S. shale fields, Europe’s gas import and storage infrastructure, and even the gas fields of British Columbia.
“We believe that industry must act, visibly and quickly,” Dr Fatih Birol, executive director of the International Energy Agency (IEA) said in January 2021 when the agency published its Methane Tracker. “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.”
The methane polluters
New satellite technology combined with optical gas imaging cameras have allowed for steady improvements in our understanding of methane emissions from the sector. Now, specific sources of methane can be identified in something approximating real time.
A new study from Reuters pinpoints some of the methane emissions to individual oil companies, the first analysis of its kind. Using satellite data, Reuters found that among 15 large oil and gas companies, the worst producers were Royal Dutch Shell and Chevron, followed by ConocoPhillips, Marathon Oil and ExxonMobil. Slightly better were Suncor, TotalEnergies, and Pioneer Natural Resources.
Not only were Chevron and Shell the worst performers of the group, but Reuters also found the biggest gap between how they performed and what they were reporting in their regulatory filings and public reports.
“They are all clustering in the ‘not so good’ area, and some are hovering on poor.”
“We are starting to see that some companies are managing this better than others… They are all clustering in the ‘not so good’ area, and some are hovering on poor, but none are anywhere near the ‘best’ zone,” Mark Kriss, CEO of Geofinancial Analytics, said in a statement. The firm collaborated with Reuters on the analysis.
Kriss added that Shell’s performance was the biggest surprise given the company’s highly public position as a supposed energy transition leader and its lofty claims that it would minimize methane leaks. Shell has promised to cut its leaks down to 0.2 percent of the gas it produces by 2025.
“The airborne methane in the environs of Chevron and Shell across all their on-shore wellheads in the geographies we cover were slightly higher than Exxon’s,” he said. Shell’s operations along the Gulf Coast stood out, Kriss said.
The oil industry likes to argue that broader society holds most of the responsibility for climate change since billions of people uses its products. Oil producers merely provide a product that society wants, the argument goes. While that mantra ignores decades of corporate PR and industry obfuscation that has prevented and slowed the energy transition, there is nevertheless quite a bit of truth in those claims.
But the same cannot be said for upstream and midstream methane leaks, which is entirely the responsibility of the industry. Oil companies have promised to clean up their act, but are still leaking huge volumes of methane.
As much as 75 percent of leaking methane from oil and gas could be captured at virtually no additional cost.
As much as 75 percent of leaking methane from oil and gas could be captured at virtually no additional cost, according to the IEA. The costs would be offset by the sales of the captured gas.
But governments will need to step up since it is clear that the industry won’t do it on its own. In the U.S., the bipartisan infrastructure bill and the Democrats-only reconciliation package could offer a pot of new money to cleanup old oil and gas wells, which could help cut down on some of the leaks. The EPA may also tighten up regulations on the industry.
These are just some small examples of what needs to be done. Much more action is needed.
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