Eight major oil companies said that they would not just cut their methane emissions but that they would also work to ensure that they are properly regulated and that all of their suppliers work to achieve the same. Transparency, they said, is critical to their success.
Methane is a potent greenhouse gas and it is a key component of natural gas, or 84 times more potent than CO2. Minimizing those emissions had been a top priority of the Obama administration, which had sought to reduce those levels by 45% from a 2012 threshold before 2025 under a May 2016 regulatory order. But the Trump administration had wanted to toss the ruling, calling it an expensive undertaking for business and one that was not necessary because the oil and gas industry had been limiting those releases on their own.
But BP, Eni, Exxon Mobil, Respol, Shell, Statoil, Total and Wintershall vowed to cut their methane levels last week. They said that they would improve the accuracy of their data and push those up-and-down their supply chains to take similar actions.
To do so, they have created Guiding Principles — ones supported by the Environmental Defense Fund and the International Energy Agency, as well as some oil and natural gas groups.
“Our analysis at the International Energy Agency shows that credible action to minimize methane emissions is essential to the achievement of global climate goals,” said Tim Gould, head of supply, World Energy Outlook,” for the agency, in a release.
“The commitment by companies to the Guiding Principles is a very important step,” he added, and the agency looks forward to wider participation by the oil and gas industry. “The opportunity is considerable — implementing all of the cost-effective methane abatement measures worldwide would have the same effect on long-term climate change as closing all existing coal-fired power plants in China.”
ICF International said that oil and gas companies could cut their
emissions by 40% below the projected 2018 levels. And it wouldn’t be
expensive — less than one cent per thousand cubic feet of natural gas
produced. That amounts to a capital investment of $2.2 billion, which
which Oil & Gas Journal data shows to be less than 1% of annual industry
capital expenditure.
The investment in those technologies will be needed. BP said in its global
energy outlook that between 2015 and 2035 oil, natural gas and coal will
each comprise about 27 percent of the energy mix.
Notably, Exxon is the only US-based oil company on the list. Its industry representative, the American Petroleum Institute, had said that its members have reduced their methane emissions on their own and that further regulations would be both duplicative and expensive.
It points to a study by EPA that said methane emissions have been falling, making the trade group question why the new rules have even been necessary. The report released in March shows that methane emissions from all petroleum systems decreased by 28 percent since 1990. EPA attributed this improvement to decreases in emissions from associated gas venting and flaring.
The Obama administration had calculated that 375 billion cubic feet of methane has entered the atmosphere beginning in 2014. If escaping natural gas could be captured and resold, industry could increase its revenues by as much as $188 million a year, it added, pointing to a General Accountability Study that also said 40% of methane releases could be recaptured and marketed.