Global methane emissions from oil and gas

Our new estimates for 2019 show a slight rise in methane emissions from oil and gas compared with the previous year, but there is a great deal of uncertainty over what might happen in 2020. In the case of CO₂, it seems almost certain that global emissions will fall this year because of the global slump in economic output, transport activity and fossil-fuel combustion caused by the coronavirus (COVID-19) pandemic.

However, a similar drop in methane emissions from oil and gas cannot be taken for granted, even if oil and gas consumption falls. For example, a decline in revenues from oil and gas operations could mean that companies pay less attention to efforts to tackle methane emissions. Low natural gas prices may lead to increases in flaring or venting, and regulatory oversight of oil and gas operations could be scaled back.

This highlights that energy market trends are not the only force affecting methane emissions from oil and gas. Fluctuations in these emissions also reflect choices made by individual operators and policy makers. Where there is a concerted drive to reduce them, they go down; and the reverse also tends to be true. Our Methane Tracker shows that methane leaks are not an inevitable part of today’s oil and gas business. They can be reduced cost-effectively – and this has to happen if the world is to address climate change.

In this article, we examine four key areas in the measurement of methane emissions and efforts to reduce them:

• The growing importance of satellite and other aerial measurements
• The way that measurement campaigns are factored into our latest estimates
• The cost-effectiveness of abatement in a world of low gas prices
• The role for governments in driving down methane emissions

One of the most recent and promising advances in understanding the level of methane emissions worldwide is the use of satellites. Various different satellites in operation today can provide estimates of the atmospheric concentration of methane across geographic areas.

For example, the satellite Sentinel 5P (Precursor), part of the European Space Agency (ESA) Copernicus program, provides readings of methane concentration across areas of 5 km by 7.5 km, covering the whole world on average every four days. The satellite GHGSat covers a much smaller area each day but can provide data at a very fine spatial resolution (around 50 m by 50 m). The coverage and accuracy of these readings is only going to improve, especially with the envisaged launches of the Environmental Defense Fund’s MethaneSat, ESA’s Sentinel 5 and additional satellites from GHGSat.

A key advantage of satellites is that they can help locate large emitting sources promptly. Once a leak has been found, it can often be fixed relatively quickly. Previously, leak detection mainly relied on the use of handheld thermal cameras to identify sources of emissions, which could be slow and cumbersome. Satellites and other aerial measurement methods, such as drones or planes, can provide a much quicker and more comprehensive view.

Satellites can also help improve our understanding of the nature of methane emissions from oil and gas facilities. Readings of changes in the atmospheric concentration of methane can be used to estimate the rate of emissions from a source that would have caused such a change.

Data analytics firm Kayrros has used readings from the satellite Sentinel 5P to detect and interpret large methane plumes across a number of oil and gas producing regions. For example, Kayrros analysts spotted plumes coming from three different oil and gas facilities in Algeria in January 2020. These plumes were caused by sources emitting more than 25 tonnes of methane per hour. A methane leak of that scale is roughly equivalent to the CO₂ emissions from a 750 megawatt coal power plant.

While the duration and location of these huge plumes can vary considerably, Kayrros detected an average of about 100 of them worldwide at any one time. Oil and gas operations are believed to cause around half of them, with the remainder coming from coal mines, agriculture and other sources. On an annual basis, these ultra-emitting oil and gas sources would result in just over 10 million tonnes (Mt) of methane. That is around 15% of our latest estimate of global methane emissions from oil and gas. A critical question for the industry and for policy makers across all countries is how to tackle these very large emissions sources.

The increasing amount of data and information from satellites will continue to improve global understanding of methane emissions levels and the opportunities to reduce them. However, satellites do have some limitations:

• Existing satellites cannot provide data over snowy, marshy or offshore areas. The data from Kayrros relies on extrapolations for areas that are difficult to examine directly.
• The process of using changes in the atmospheric concentration of methane to estimate emissions from a particular source can rely on a large level of auxiliary data and be subject to a high degree of uncertainty. The emissions estimates from Kayrros currently carry an uncertainty of plus or minus 30%, mainly stemming from uncertainty in weather models.
• Satellites often only provide data for large emitting sources. They may fail to capture small-scale emissions sources such as faulty components, which could add up to a large overall amount of emissions.

The ability to identify big leaks by satellite will not solve the challenge presented by methane emissions from oil and gas by itself. Tackling them requires companies to pursue and maintain high operational standards, and policy makers to put in place well-designed regulations.

Our Methane Tracker provides estimates for the ways in which methane emissions from oil and gas can be reduced. Since methane is a valuable product and can often be sold if it is captured, this revenue can help offset some of the costs of deploying the measures needed to prevent the emissions. Natural gas prices are obviously a crucial variable in this calculation. While natural gas prices today are relatively low, we estimate that around one-third of our latest estimate of methane emissions from oil and gas operations could still be avoided at no net cost.

Nonetheless, because methane is such a potent greenhouse gas, even those measures that cost more money than they save are still a very cost-effective way to reduce emissions. For example, with a greenhouse gas price of only $15 per tonne of CO₂-equivalent (well below what many companies claim to be using to screen their upstream investments), it would be cost effective to deploy all measures that cost less than $10 per million British thermal units.

The message is clear: even with an over-supplied gas market, reducing methane emissions from oil and gas operations is amongst the lowest of low-hanging fruit for mitigating climate change. Even as energy markets are buffeted from all angles, companies and policy makers cannot afford to lose sight of this potential.

The picture revealed by our latest updates to the Methane Tracker is a sobering one in many ways. Estimated emissions from oil and gas operations remain very large. Moreover, the health and economic crises caused by the coronavirus are naturally dominating the near-term agendas of companies and policy makers.

However, there are grounds for a more upbeat view. Methane emissions are large, but the evidence makes it clear that a substantial amount can be reduced cost-effectively. The best-performing companies and countries are showing the way. And advances in measurement capabilities and data transparency mean that disparities in performance between companies and countries will be increasingly visible, making it harder for laggards to go unnoticed. This remains a huge opportunity to reduce greenhouse gas emissions – not just for 2020, but for good.