IEA decries $40 billion methane leaks from energy system

The value of the 180 Bcm of globally leaked methane in 2021 was $40 billion, Tim Gould, chief economist at the International Energy Agency said Feb. 23, as he delivered a report highlighting wasted methane from the global energy system.

Global methane emissions from the energy sector are about 70% greater than the amount national governments have officially reported and this comes amid short supply of gas in global markets and discussions about how to invest in reducing emissions, he said at a press conference as he delivered the report.

"Alongside the negative effects of global warming, this [180 Bcm leakage] is an astonishing waste of gas in a year when gas markets have been extremely tight," Gould said. "Based on natural gas prices in 2021 that's more than $40 billion of value just disappearing into the air."

About 40% of oil and gas emissions could be reduced at no net cost using well-known technologies based on gas prices in recent years, and at current high prices nearly all abatement options are cost-effective, Christophe McGlade, the lead author of the report, said during the press conference.

S&P Global Platts assessed Dutch TTF Day Ahead prices at an average of $16.03/MMBtu in 2021, compared with $3.18/MMBtu in 2020.

The 180 Bcm would have been comfortably enough to ease today's price pressures, the report said.

Norway, Saudi Arabia and UAE are demonstrating proven technologies in minimizing methane leakage, the IEA said.

Underreporting of emissions

"As more measured data becomes available, it is increasingly clear that many national inventories significantly underreport methane emissions' levels, particularly those from oil and gas operations," McGlade said.

The IEA estimates that it is technically possible to avoid over 70% of today's methane emissions from global oil and gas operations.

Methane is responsible for around 30% of the rise in global temperatures since the industrial revolution. It dissipates faster than CO2 but is a much more powerful greenhouse gas during its shorter lifespan, meaning that cutting methane emissions would have a rapid effect on global warming.

The energy sector accounts for around 40% of methane emissions from human activity, the IEA said.

The largest anthropogenic source is agriculture, responsible for around one quarter of emissions, closely followed by the energy sector, which includes emissions from coal, oil, natural gas and biofuels.

The 2022 update of the IEA Global Methane Tracker includes emissions from coal for the first time. Country-by-country estimates in the tracker show China is the largest source of global energy-related methane emissions at 28 million mt, followed by Russia at 18 million mt and the US at 17 million mt.