IEA (2021), Driving Down Methane Leaks from the Oil and Gas Industry, IEA, Paris https://www.iea.org/reports/driving-down-methane-leaks-from-the-oil-and-gas-industry, License: CC BY 4.0
Resources and definitions
- The IEA Methane Tracker provides emissions profiles and information about abatement options while the Policies Database provides examples of methane regulations and policies.
- United Nations Environment Programme has been actively promoting methane mitigation, organising training opportunities on this topic. It is part of the Climate & Clean Air Coalition (CCAC) Mineral Methane Initiative, which calls on countries, organisations and companies to commit to reducing oil and gas methane by 45% over estimated 2015 levels by 2025 and 60% to 75% by 2030. The CCAC also provides expert assistance at no cost and regularly issues articles on methane action.
- The Global Methane Alliance brings together governments, financing institutions, international organisations such as United Nations Environment Programme, non‑governmental organisations and industry to support methane reduction targets from the oil and gas industry. The related Oil and Gas Methane Partnership has issued a series of technical guidance documents on quantification and mitigation options for methane emissions from upstream oil and gas operations.
- The Clean Air Task Force has developed a tool (the Country Methane Abatement Tool [CoMAT]) to help countries estimate how much methane pollution they can reduce from their oil and gas industries as well as a compendium that offers a source-by-source summary of the best regulatory policy in North America.
- The Environmental Defense Fund has developed several in-depth resources on methane, and is expected to launch a satellite (MethaneSAT) in 2021 focused on methane observation.
- The Global Methane Initiative is an international public-private partnership focused on reducing barriers to the recovery and use of methane as a clean energy source. It provides technical support for methane-to-energy projects as well as a number of information resources.
- The Oil and Gas Climate Initiative is a consortium that aims to accelerate the industry response to climate change, including actions to reduce methane emissions.
- The Methane Guiding Principles are a voluntary, international multi‑stakeholder partnership between industry and non‑industry organisations with a focus on priority areas for action across the natural gas supply chain. Alongside information regarding its five guiding principles, it publishes best practice guides and toolkits.
- The Florence School of Regulation has organised a series of webinars and published policy briefs that discuss methane reduction opportunities.
Policy type definitions
The following definitions are used throughout this report when categorising policy types, including the categories referenced in the Tables found in the Overview (“Methane policies in selected producing countries categorised by regulatory approach.”). These categories correspond to specific tags in the IEA Policies Database.
Category 1: Prescriptive – Regulations that direct regulated entities to undertake or not to undertake specific actions or procedures. This command-and-control approach focuses on setting procedural, equipment or technological requirements such as the installation or replacement of specific devices.
- Permitting requirements – Permits are a means of granting authorisation for specific operations or procedures (e.g. pollution permits, drilling permits). Permits also include conditions that limit their validity, which may be temporal, technological or spatial.
- Leak detection and repair (LDAR) – Requirements to implement fugitive emissions management plans that include the process of locating and repairing fugitive leaks. Policies may address the type of equipment used, frequency of inspection, the leak threshold that triggers repair requirements and the length of time allowed to conduct the repairs.
- Restrictions on flaring or venting – Regulations that limit the amount of flaring or venting allowed or that prescribe the equipment or process for flaring or venting. This includes limitations on total volume, banning of such activities in routine proceedings (allowed only for safety reasons or special conditions), the need to request authorisations beforehand, or specifications of equipment or procedures.
- Technology standards – Requirements that outline the equipment, technology or procedure that must be employed in a regulated activity (e.g. requires the use of no-bleed pneumatic devices; both high- and low-pressure gas-liquid separation stages must be used to minimise vapour released from produced hydrocarbon liquid; vented natural gas from liquids unloading must be collected). This includes best available technology requirements, which refer to a benchmark technology or procedure for reducing emissions that is considered reasonably practicable and evolves according to technological development.
- Enforcement and related provisions – Encompasses enforcement, inspections and auditing requirements. Enforcement provisions authorise enforcement actions, set enforcement policy, specify sanctions or outline procedural requirements. Regulatory inspection provisions authorise officials to conduct onsite verification in order to assess compliance and enforce regulations. Auditing provisions establish verification processes whereby officials or third parties observe and report on the validity of the information provided by oil and gas operators.
Category 2: Performance- or outcome-based – Regulations that establish a performance standard for regulated entities, but do not dictate how the target must be achieved. An absolute or relative performance target can be applied at the national level, through economy- or sector-wide targets; at the company level; at the level of each facility; or even to individual types of equipment.
- National or sectoral reduction targets or plans (strategic targets) – These refer to reduction goals, including the definition of baselines, intermediate goals and means of assessing progress, reviewing objectives and achieving established targets. At national level (e.g. net-zero greenhouse gas emissions by 2050) or sectoral level (e.g. 50% methane reductions in the oil and gas industry in 2030 from the 2010 baseline), these generally serve as a strategic instrument and do not impose specific requirements on companies.
- Facility or company emissions standards – Regulations that limit emissions through a performance metric set at the facility or company-level (e.g. each company must reduce emissions by 20% on a per unit basis). They generally cover different aspects related to atmospheric emissions, such as quantity (e.g. volume) or characteristics (e.g. concentration). This includes company or facility specific limits and associated reduction plans.
- Process or equipment standards – Regulations that limit emissions through a performance metric set at the process- or equipment-level (e.g. glycol dehydration units must control emissions by 95%). They generally cover different aspects related to atmospheric emissions, such as leak rates, discharge characteristics (e.g. temperature) or means (e.g. minimum height of discharge).
- Flaring or venting standards – Regulations that limit the amount of flaring or venting for the purpose of disposal allowed through a performance metric (e.g. minimum gas utilisation rates, admissible volume as a percentage of output) or establish other performance requirements (e.g. flaring must be designed for 98% efficiency). Regulations aimed primarily at fugitive emissions are not included in this category.
Category 3: Economic approach – Regulations that use economic provisions to induce action by applying financial penalties or incentives. This may include taxes, subsidies or market-based instruments, such as tradeable emissions permits or credits, that allow firms to choose among different strategies to address emissions (e.g. directly reduce emissions or pay for offsets), effectively changing the cost curve of abatement.
- Taxes, fees and charges – Taxes, fees or other charges that are levied on emissions, including nationwide carbon taxes applied to methane or royalties and other charges imposed on flared, vented or unaccounted for gas. Taxes, fees and charges may be further divided into two sub-categories:
o Taxes, fees and charges on gas disposal (flaring or venting) – This refers to taxes, fees and charges that are are levied when operators dispose of excess gas by flaring or venting.
o Taxes, fees and charges on other emissions – This refers to all other taxes, fees and charges, including those levied on fugitive emissions and methane emitted as a result of operation of equipment or certain processes (e.g. emissions from high- or intermittent-bleed pneumatic devices).
- Emissions trading schemes and certified reduction credits (emissions trading and credits) – Emissions trading schemes typically define an emissions limit and allocate emissions allowances among the regulated community. These allowances can then be traded among companies according to their needs and capabilities. Certified reduction credits allow entities that go beyond established requirements to be accredited as voluntary methane reductions, which may be traded. This item also includes any requirement that allow companies to achieve emissions reduction requirements by buying tradable credits.
- Loans, grants and other financial incentives (other financial incentives) – This includes all types of positive financial incentives that governments pay provide to reduce emissions. This could include direct provision of loans or grants to invest in reduction measures or other incentives such as allowing cost recovery for abatement costs via reductions in royalties, taxes or fees.
Category 4: Information-based approach – Regulations that are designed to improve the state of information about emissions, and may include requirements that regulated entities estimate, measure and report their emissions to public bodies.
- Emissions estimates and quantification (emissions estimates) – Requirements to estimate methane emissions through the use of activity factors and emission factors.
- Measurement requirements – Mandatory data collection for activities, equipment or production flows (e.g. volume of gas flared or vented, fugitive emissions leak rates from compressors), requiring operators to record, process and submit requested information. They support the definition of activity or emission factors that are specific to measured devices, facilities and settings.
- Reporting requirements – Regulated entities must record and report required information. This can include reporting emissions monitoring data, key events (e.g. accidents, flaring), state of facilities or operational data. Regulations can indicate if information must be disclosed to the public or sent to regulatory authorities.
- Public disclosure – Requirements for regulated entities to share specified information related to methane emissions with the public (e.g. requirements to publish methane emission reports online, to undertake public information campaigns, or to disclose information upon public request). This also includes instruments that require public bodies to make specified information received from regulated entities available to the public.