Tackling oil and gas methane emissions

Tackling oil and gas methane emissions: a business opportunity

Poppy Kalesi - 7 February 2020

Natural gas is a major source of Europe’s energy today. Yet the outlook for gas is less certain as the EU transitions to a zero-emissions energy system and policymakers assess the role of gas to address both Europe’s long-term energy security and sustainability needs.

About the author

Mrs Poppy Kalesi
Poppy Kalesi is Director Global Energy at the Environmental Defense Fund, one of the world’s largest environmental organisations with more than 2.5 million members and a staff of 700 scientists, economists, policy experts, and other professionals around the world.
Central to the debate surrounding natural gas is the urgent climate issue of methane, an invisible, colourless greenhouse gas hiding inside Europe’s natural gas supply chain. Methane is a fast-acting gas that traps 84 to 87 times more heat in the atmosphere than carbon dioxide in the first twenty years after release.

Estimates (source: IPCC) suggest that human-caused methane emissions account for at least 25 per cent of global warming. Moreover, methane emissions from the world’s oil and gas industry, occurring during the production, delivery and use of gas, constitute about 25 per cent (source: EDF-calculations, based upon IEA, US EPA and FAO-data) of total methane emissions caused by human activity.

Industry’s methane problem, however, is also an opportunity for technology and services providers. Valves that plug holes throughout the system help keep a dangerous climate pollutant out of the air. Tighter seals also improve operational efficiency. Methane is the main constituent in natural gas, and companies that monitor and manage their leaks end up with more products to sell.

In a new policy brief on the issue, experts at the Environmental Defense Fund point to the many cost-effective technologies that are available to solve the methane problem: solutions are relatively simple: more a matter of plumbing than rocket science. The International Energy Agency estimates that the global oil and gas industry can feasibly cut 75 per cent of its methane emissions with current technologies and up to two-thirds are achievable at no net cost. Valve manufacturers offering methane mitigation solutions stand to benefit.

As companies and countries increasingly focus on minimising emissions, there will be a growing need for solutions that can effectively plug methane leaks system-wide. This is particularly important for Europe, as some major producers have already set company-wide targets to improve their emissions performance. It is a trend that could quickly cascade across the industry as EU regulators look to tighten efficiency standards. In 2017 the EU consumed 47 per cent of the world’s internationally traded gas, making it the single largest market for imported gas. Europe’s gas is sourced from top methane emitting countries, including Russia, the United States and Algeria. As European demand for imported natural gas rises, methane emissions from the industry threaten to undermine climate stabilisation efforts.

To achieve the Paris goals, Europe’s 2020 Gas Market Reform must tackle emissions in the energy system today, while creating the framework for Europe’s future sustainability. Reform of the EU gas package represents the next big opportunity for policy makers to demonstrate that climate will be a cornerstone of EU energy policy and provide the technology and services industries with the regulatory certainty they need to spur innovations that can help oil and gas companies virtually eliminate methane emissions.

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