Methane abatement has become ‘urgent’, Wood Mackenzie says
Methane emissions reduction is oil and gas sector’s ‘Mission Invisible’
Energy Source took a road trip from Houston, Texas, to Louisiana’s Lake Charles last week to take a look at some of the liquefied natural gas plants that have propelled the US to become the world’s largest exporter of the fuel.
The LNG trade has become a multibillion-dollar industry and helped Europe wean itself off Russian gas, but it has come at an environmental cost — evident from the flaring of methane at facilities along the Gulf coast.
Unlike other pollutants emitted by oil and gas facilities, such as sulphur dioxide, methane is odourless and colourless. The potent greenhouse gas, however, is responsible for almost a third of the emissions-induced increase in global temperatures since the start of the industrial era, according to a report by Wood Mackenzie.
The report titled Mission Invisible: tackling the oil and gas industry’s methane challenge, which is due to be published this week, should provide a wake-up call to the global oil and gas industry. The consultancy says the sector is responsible for a quarter of human-caused methane emissions.
US-based companies will soon face tough rules and penalties for emissions from large-scale flaring and venting events, as well as losses from innumerable small, undetected or unreported leaks.
President Joe Biden’s Inflation Reduction Act will introduce a charge of $900 per tonne of methane emitted in 2024, rising to $1,500 per tonne in 2026. The EU is also working on laws to prevent intentional methane losses.
Methane is a primary component of natural gas and is produced by virtually every oil and gas project worldwide. When it is not cost effective to capture it, companies release it into the atmosphere via venting or burn it through flaring, which converts it into carbon dioxide.
Methane is more than 28 times as potent as CO₂ at trapping heat in the atmosphere, according to the US Environmental Protection Agency, which has proposed halting almost all flaring and venting by companies.
“Methane emissions are a huge threat to climate change and methane is a lot more powerful than CO₂,” said Elena Belletti, co-author of the Wood Mackenzie report, which warns regulation is getting serious for the first time.
The measurement conundrum
COP28 will be pivotal to global efforts to crackdown on methane emissions, as governments properly assess abatement efforts for the first time since the Paris agreement, Belletti said. This will highlight a significant shortfall in progress, according to Wood Mackenzie.
But governments and industry face a big challenge when it comes to measurement because existing technology was unable to provide complete coverage or granularity on emissions, the report will say.
While large-scale release can be picked up by satellite technology, aircraft, drones, regional sensors and optical gas imaging cameras, there is not yet a widespread network of such equipment due to the high cost of installation. Smaller leaks, which are typically caused by faulty or loose valves and venting from tanks and wellheads, are extremely difficult to detect and measure with current technologies.
Methane is also highly dispersible: a methane molecule can travel from North America to South Asia in less than two weeks, adding to the measurement challenge.
The complexity of measuring emissions suggests methane losses are far larger than current estimates. A 2022 study by The Royal Society of Chemistry estimated actual methane emissions from the UK oil and gas sector could be five times current estimates.
Looking forward
Wood Mackenzie says better measurement technologies are coming. Next year, the Environmental Defense Fund, a US nonprofit group, plans to launch MethaneSAT — a satellite that can provide high-resolution coverage of methane emissions from at least 80 per cent of global oil and gas facilities.
But the consultancy recommends that industry should not wait, and called on all oil and gas producers to “turbocharge abatement” of methane, noting it is one of the most achievable ways for companies to make a sizeable dent in their greenhouse gas emissions.
Reducing venting and flaring is a pressing task that does not require technological improvements, and capturing this methane and channelling it into sales can generate revenue and offset abatement costs. Governments should also step up to the plate by properly enforcing new regulations, collaborating with industry on targets and support funding for new measurement and abatement technology, according to the authors.