View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Analysis
December 3, 2018

Moving on methane emissions

Methane emissions make up a significant percentage of the environmental pollution created by the oil and gas industry, and companies are now beginning to react. Giants Shell, BP and Total, among others, have pledged to dramatically reduce flaring and fugitive emissions, but how are they going about it?

By Molly Lempriere

Methane is often overlooked as a dangerous emission. Despite its potency as a greenhouse gas (GHG), the prevalence of carbon has led to the focus remaining firmly on combatting CO2 emissions.

Free Report
img

How are oil and gas companies strategizing in response to the electric vehicle market?

Electric mobility is a crucial element of the successful energy transition. Electric vehicles (EVs) are expected to account for over one-third of the new car sales worldwide by 2031, and so oil and gas companies are reacting with heavy investments across the EV value chain. Such investments are being made in a bid to remain relevant within this exciting segment.  GlobalData’s free report, Oil & Gas Sector Strategies in Electric Vehicles, reveals that transportation accounts for almost half of the petroleum products demand. However, the wider adoption of electric vehicles could slow the pace of petroleum products demand in the future.   Our report includes:  
  • Petroleum products demand forecast till 2026 by sector 
  • Potential targeted areas for oil & gas companies to enter the EV value chain 
  • EV strategies of oil & gas companies across major regions in the world 
Use this report to help navigate a new frontier for the oil & gas industry.  
by GlobalData
Enter your details here to receive your free Report.

In the oil and gas industry, methane is often just burnt off in flaring, however in recent years a number of the major oil and gas producers have pledged to reduce their methane emissions in an effort to improve the environmental impact of their operations.

“Methane is a more potent GHG than CO2,” explains a Shell spokesperson. “It has 34 times the global warming potential of CO2 over a 100-year time frame, according to the UN Intergovernmental Panel on Climate Change’s Fifth Assessment Report.”

Earlier this year Shell was applauded by the UN after committing to keep its methane intensity below 0.2% by 2025 across all of its oil and gas operations. But how is it going about this change, and what other companies doing to tackle methane?

Tackling emissions through technology and leadership

Currently, oil and gas operations are responsible for 31% of methane emissions in the US. This makes the industry the single biggest contributor; in 2017, Shell alone produced 123,000 tonnes of methane, equivalent to 5% of the company’s total emissions.

“To maintain this methane target, Shell is implementing programmes, including using infrared cameras to scan for methane emissions, deploying advanced technology to repair leaks, and replacing high-bleed pneumatically-operated controllers with low emission alternatives,” says a Shell spokesperson.

Improvements in technologies will likely play a large role in reducing emissions. In particular, monitoring technologies will help to minimise methane lost through leaks, or fugitive emissions, which some studies estimate accounts for as much as 90% of emissions. If those leaks can be quickly and efficiently identified and fixed, it could dramatically reduce emissions.

“Shell is involved in a broad range of initiatives focused on reducing the emissions intensity of methane throughout the full supply chain – from production to the final consumer,” says the spokesperson. “For example, in 2017, Shell brought together industry, international institutions, non-governmental organisations and academics to develop a set of Methane Guiding Principles, which focus on continually working to reduce emissions of methane throughout the gas industry and have now been signed by 16 companies.”

Reducing routine flaring

A further cause of methane emissions, which happens during the production and refining of oil and gas, is flaring. A colossal 143 billion cubic metres of methane-rich gas, or 3.5% of the world’s total gas production, is flared every year.

“Shell has been an active member of the World Bank-sponsored Global Gas Flaring Reduction partnership since 2002,” continues the spokesperson. “As part of the partnership, the World Bank has developed the Zero Routine Flaring by 2030 initiative, which Shell signed in 2015. This encourages governments, companies and development organisations to work together to end flaring.”

A number of technologies are under development that would be able to capture and utilise the methane currently flared during oil and gas operations. These include a method developed by MIT that can turn methane into methanol, which can then be sold on. Should such technologies prove financially beneficial, they could go a long way to reducing emissions.

“Shell’s industry-leading target makes clear that the race to near-zero methane emissions is on,” senior director at Environmental Defense Fund Ben Ratner said in a statement. “Strong commitments like this suggest to investors, governments, and business partners alike that an operator is serious about its positioning in a cleaner energy economy.”

An industry-wide movement

Other industry players have set similar targets to reduce their methane emissions, including a pledge made by members of the Oil and Gas Climate Initiative (OGCI) in September.

“Our aim is to work towards near-zero methane emissions from the full gas value chain in support of achieving the goals of the Paris Agreement. We have worked to make our ambition concrete, actionable and measurable, helping to ensure that natural gas can realise its full potential in a low-emis­sions future,” the heads of the OGCI member companies said.

BP and Total are both members of the OGCI, along with other major industry players. In May, Exxon Mobil announced that it would be reducing its emissions by 20% by 2020.

“Achieving the agreed intensity target of 0.25% by the end of 2025 would reduce collective emissions by 350,000 tonnes of methane annually, compared to the baseline of 0.32% in 2017,” according to the OGCI.

This could make a huge difference to the industry’s methane emissions, at a crucial time in efforts to reduce greenhouse gases.

There is still a way to go however, and continued collaboration and company commitment will be essential if reductions are to have a meaningful impact.

“Follow through with good data and transparency are vital – as is leadership in standing up for strong, sensible methane policy that can improve performance across the industry,” Ratner added.

Leadership is particularly pressing, as despite a commitment in 2016 by the US, Canadian and Mexican governments to move on methane emissions, little has been achieved. As such, it is time for the oil and gas industry themselves to step up.

“This is an industry wide issue and we need to fix this fast,” said Shell director of integrated gas and new energies, Maarten Wetselaar. “We must get a much more accurate understanding of how much we are emitting.”

Related Companies

Free Report
img

How are oil and gas companies strategizing in response to the electric vehicle market?

Electric mobility is a crucial element of the successful energy transition. Electric vehicles (EVs) are expected to account for over one-third of the new car sales worldwide by 2031, and so oil and gas companies are reacting with heavy investments across the EV value chain. Such investments are being made in a bid to remain relevant within this exciting segment.  GlobalData’s free report, Oil & Gas Sector Strategies in Electric Vehicles, reveals that transportation accounts for almost half of the petroleum products demand. However, the wider adoption of electric vehicles could slow the pace of petroleum products demand in the future.   Our report includes:  
  • Petroleum products demand forecast till 2026 by sector 
  • Potential targeted areas for oil & gas companies to enter the EV value chain 
  • EV strategies of oil & gas companies across major regions in the world 
Use this report to help navigate a new frontier for the oil & gas industry.  
by GlobalData
Enter your details here to receive your free Report.

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Friday. The industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Offshore Technology