Methane emissions from the oil & gas sector decline by 10% in 2020

19 January 2021

Methane emissions from the global oil and gas industry fell by an estimated 10% in 2020, according to data by the International Energy Agency (IEA), as energy companies slashed output in response to the historic shock of the Covid-19 crisis. IEA also warned that when the global economy recovers, these emissions could rebound strongly without greater action by companies, policy makers and regulators.

The IEA released two reports on methane emissions:

• Methane Tracker 2021—The 2021 update to the IEA’s Methane Tracker includes detailed estimates for 2020. For the first time, this year’s report incorporates data on large-scale methane releases detected by satellite, supplied by Kayrros, an earth observation firm.
• Driving Down Methane Leaks from the Oil and Gas Industry—This report summarizes policies and regulations that have already been adopted in a number of countries (Brazil, Canada, China, Iran, Iraq, Mexico, Nigeria, Norway, Russia, Saudi Arabia, UAE, USA) to reduce methane emissions from the oil & gas sector, and includes a “Regulatory Roadmap” and a “Regulatory Toolkit” for policy makers looking to develop new regulations to tackle CH₄ emissions within their jurisdictions.

The energy sector—including oil, natural gas, coal and bioenergy—is one of the largest sources of methane emissions. Methane emissions from the natural gas and oil supply chain (colloquially called “methane leaks”) include fugitive emissions, usually defined as unintentional methane losses in oil and gas operations, and venting, defined as deliberate release of natural gas during the production or distribution process. As flaring of vented gas is the norm within the oil and gas industry, wherever feasible, a proportion of the vented gas becomes converted to CO₂.

The IEA estimates that oil and gas operations worldwide emitted 72 million tonnes of methane into the atmosphere in 2020, around 10% lower than in 2019 and the lowest emission level since 2011. A large portion of this drop occurred because of the fall in oil and gas production over the course of the year—especially in countries and regions where production has a high emission intensity. The IEA report explicitly mentions lower production in Libya and Venezuela, as well as lower shale activity in the United States.

Converted into equivalent amounts of CO₂, 72 Mt of methane emissions are comparable to the total energy-related CO₂ emissions of the European Union, said the IEA. This conversion is based on the global warming potential of CH₄ over a time horizon of 100 years (GWP₁₀₀) equal to 30. However, it would be reasonable to consider GHG emission effects on a time scale shorter than 100 years. As the short-term warming effect of methane is higher, with GWP₂₀ of about 85, the 72 Mt of methane emissions would amount to almost triple of the EU energy-related CO₂ emissions on a twenty-year time scale.

The IEA analysis highlights that reducing methane emissions can be cost-effective for oil and gas companies. Unlike CO₂, there is already a price for methane everywhere in the world—the price of natural gas. This means the costs of improving operations or making repairs to reduce methane losses can often be paid for by the value of the additional gas that is brought to market.

Source: IEA