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September 17, 2018

Shell pledges to reduce methane emissions in oil and gas sector

Energy giant Shell has announced new targets to reduce its methane emissions from oil and natural gas extraction and transportation operations.

By Talal Husseini

Energy giant Shell has announced new targets to reduce its methane emissions from oil and natural gas extraction and transportation operations.

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Methane, a primary component of natural gas, often leaks into the atmosphere from wells, pipes, storage tanks and processing plants.

Shell pledged to limit methane emissions to less than 0.2% of the total level of natural gas extracted from any single project. While currently there is no way of accurately measuring methane emissions across the entire company, Shell said some projects emit up to 0.8% methane.

Shell Integrated Gas and New Energies director Maarten Wetselaar said in a press release: “This methane target complements Shell’s ambition to cut the net carbon footprint of our energy products by around half by 2050, which we announced in November 2017.

“It is a further demonstration of our continued focus on tackling greenhouse gas emissions. Such efforts are a critical part of Shell’s strategy to thrive during the global energy transition by providing more and cleaner energy.”

The target pledge comes at a time when the US Government is attempting to rewrite the previous rules on limiting methane emissions. Wetselaar said the company wants the limits to stay in place, conceding that US regulation could still be improved.

He added: “Everybody should want their product to stay in the pipe and be sold to the customer rather than leak it. It’s essentially uncontroversial. Nobody in the industry should want to leak any methane.”

Other oil and gas giants, including ExxonMobil and BP, have planned similar commitments, with the former saying that it would cut methane emissions by 15% by 2020 and reduce flaring by 25%.

BP announced in April it would keep emissions steady through to 2025, with a goal of limiting methane emission intensity to 0.2%.

Next week, the Oil and Gas Climate Initiative, led by CEOs of the world’s largest energy companies, will hold its annual meeting to announce a mutual methane target by the end of this year.

Methane emissions are the new priority

Traditionally, carbon emissions have dominated the discourse around climate change, but the fight against methane is becoming more prominent.  This is in part due to the support for natural gas as a more environmentally friendly alternative to coal, with investors preparing for a shift in the global energy mix.

UN Environment’s energy and climate branch head Mark Radka said in Shell’s press release: “Methane is a potent greenhouse gas, but it has a relatively short lifetime in the atmosphere. That means reducing methane emissions brings immediate climate benefits, buying some time while we work out longer term solutions.

“This commitment by Shell is encouraging in itself but also because of the signals it sends to the rest of the industry.”

According to Shell, natural gas is an important ‘bridging’ fuel, which can be used to support renewables such as solar and wind power.

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Free Report
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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.

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