Oil and gas company commitments to cut methane emissions have taken off in the past two years. International super majors including ExxonMobil, Shell, and Saudi Aramco have all committed to cut fugitive methane emissions to near zero by 2030. Public interest has taken off, too: From the Department of Energy’s (DOE) $35M investment in methane emissions reduction technology to the White House’s Methane Emissions Reduction Action Plan to the Global Methane Pledge, reducing methane is at the top of our collective agenda — and for good reason.
But in 2022, the public narrative about methane emissions from oil and gas is moving in the wrong direction. The DOE’s website includes a report documenting increased methane emissions from some of the most prolific U.S. oil and natural gas basins. Stakeholders are understandably concerned about preliminary data showing methane emissions reaching their highest level in three years in the first quarter of 2022 across the Permian, Appalachian, and Anadarko Basins.
There is much ado about methane because methane is a particularly powerful greenhouse gas that is short-lived in the atmosphere — meaning that methane reductions today have more impact on preventing warming than other emissions reductions. Methane comes from many sources, and efforts like the Global Methane Pledge recognize the many opportunities to reduce methane outside of the oil and gas industry. Nevertheless, because reducing methane emissions is one of the most effective steps the world can take to mitigating climate change, and the oil and gas industry solutions are well known, all eyes are on our industry to lead the way.
Both of these things are true:
- More oil and gas companies are coming out with methane mitigation commitments and strategies than ever before.
- Companies are expected to demonstrate immediate, transparent, and verifiable action to reduce methane emissions — today.
The situation
Companies that I talk to agree with the International Energy Agency’s assertion that around three quarters of today’s methane emissions from global oil and gas operations are actionable. Companies are committed and taking action — yet both the stakes and the scrutiny continue to rise.
- Permian flyovers. In August, the U.S. Environmental Protection Agency (EPA) began conducting helicopter flyovers of oil and gas operations using infrared cameras to identify “super emitters” of methane. According to the EPA, companies identified as being in noncompliance will be charged significant penalties and continually monitored until corrective action is taken. We expect public access to methane emissions data to become the new norm.
- Differentiated gas under scrutiny. The Environmental Defense Fund says differentiated natural gas termed “responsibly sourced” or “low emission” is still problematic — given the lack of robust measurement, reporting, and verification standards, limited coverage across firms, and the potential for firms to cherry-pick which sites to certify within their portfolio. At Adamantine, we expect transparency and third-party validation to become the norm for differentiated gas.
- Dirty LNG. Some have coined U.S. LNG “worse than coal” because of its energy-intensive liquefaction and shipping processes. We expect continued apprehension around everything LNG, from emissions along the value chain to environmental justice concerns around export facilities — requiring companies to engage at an entirely new level of proactive transparency.
Seize the day
When I wrote about methane in 2019, I said addressing methane leakage is the price of admission to the energy future. Today, I also believe an aggressive approach to reducing emissions must be paired with consistent, transparent, and validated data. What does that look like? Start with these steps:
- Tie monitoring to mitigation. Companies must have a robust strategy to tie leakage data to quick fixes and confirmation of success.
- Share your plan. If your company’s emissions reduction progress is not being acknowledged, up your transparency and communications. Ask an outside advisor to assess how you are articulating your company’s methane reductions plans and documenting your progress, and then have the advisor grade you on how accessible this information is to stakeholders, investors, and rating agencies. Make the information clear and easy to find.
- Use a consistent, trustworthy approach. Initiatives such as GTI Energy’s Veritas provide a standardized, technology-neutral, measurement-informed, and science-based approach to calculating methane emissions and methane emissions intensity. Using the Veritas protocols will allow investors and other stakeholders to have confidence in your data.
Thanks to Savannah Bush and Kayla Dolan for their work on this edition. Adamantine can help your company evaluate your methane emissions progress and communication. Reach out today for a consultation.
There’s much to do — let’s do it,
Tisha
