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World oil, gas companies commit to increased methane emissions transparency


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World oil, gas companies commit to increased methane emissions transparency

A wide range of oil and gas companies agreed on Nov. 23 to report methane emissions with a much higher level of transparency as part of a reboot of the Oil and Gas Methane Partnership.

"The new OGMP 2.0 framework is the new gold standard reporting framework that will improve the reporting accuracy and transparency of anthropogenic methane emissions in the oil and gas sector," the partnership said.

The Oil and Gas Methane Partnership, or OGMP, has 62 member companies including European majors BP PLC, Royal Dutch Shell PLC, Eni SpA, Equinor ASA, Repsol SA and Total SA, as well as numerous gas grid operators, mostly from Europe. The 62 companies represent some 30% of the world's oil and gas production.

Methane released directly into the atmosphere is a highly potent greenhouse gas, with more than 80 times the warming power of CO2 over a 20-year period.

OGMP 2.0 will aim to deliver a 45% reduction in the industry's methane emissions by 2025, and a 60%-75% reduction by 2030. The framework includes not only a company's own operations, but also the many joint ventures responsible for a substantial share of their production.

Total CEO Patrick Pouyanne, speaking on a webcast press conference, said the future of gas was "intrinsically linked" to methane emissions and that OGMP 2.0 was a "new important step for this initiative."

"Natural gas has an important role to play in the energy transition, but [it] will play this role only if our industry is able to manage methane emissions," Pouyanne said.

OGMP 2.0

At the core of the new effort is a measurement-based methane-reporting framework that will make it easier for officials, investors and the public to accurately track and compare performance across companies in ways that have not been possible before.

As laid out in the EU methane strategy published in October, the European Commission is planning to draw up legislative proposals on compulsory measurement, reporting and verification for all energy-related methane emissions, building on the OGMP 2.0 framework.

A senior EC official said earlier this month that legislative proposals expected in 2021 would focus on "low-cost" initiatives for the energy sector. Malcolm McDowell, policy officer at the EC's energy directorate, said voluntary initiatives had been a good start on the road to cutting methane emissions but that legislation would be needed.

"We feel that we need to go further than just voluntary initiatives," he said during a webinar hosted by gas industry body Eurogas.

McDowell said the legislative focus in 2021 would cover methane emissions detection and repair and the elimination of gas flaring.

The OGMP 2.0 framework will apply to the full oil and gas value chain, not only upstream production. It would also include midstream transportation and downstream processing and refining — areas with substantial emissions potential that are often left out of reporting at present.

"The goal is to enable the oil and gas industry to realize deep reductions in methane emissions over the next decade in a way that is transparent to civil society and governments," the partnership said.

Costs and technology

One of the sticking points around reducing methane emissions has been cost. However, according to the International Energy Agency, about three-quarters of methane emissions could be reduced with technology that exists today and close to half at zero net cost.

Reducing methane emissions from the energy sector by 90% would shave two-tenths of a degree Celsius from the forecast rise in the planet's average temperature by 2050, the partnership said. Cutting fossil methane emissions by 75% could prevent up to 6 gigatonnes of CO2 equivalent emissions annually, or almost 10% of the planet's 2019 greenhouse gas emissions, it said.

"To win the race to net zero emissions, we need everyone on board," said Inger Andersen, executive director of the UN Environment Programme.

"We recognize the leadership of companies that have joined such an ambitious methane reporting framework [and] look forward to seeing actions that turn commitments into actual emissions reduction," Andersen said.

EU Energy Commissioner Kadri Simson said a "clear commitment" to measuring and monitoring emissions was an important first step. "There are many more steps to take to cut emissions along the entire value chain and I hope to work closely with all European and international partners to reach this goal," Simson said.

Eni CEO Claudio Descalzi said reducing methane emissions was a "crucial effort" in the industry's pathway to decarbonization.

"As a factor on which we can have an immediate and concrete positive impact, OGMP 2.0 offers an internationally recognized blueprint to companies across our industry willing to make improvements in their emission reductions in all phases of the value chain," Descalzi said.

Stuart Elliott is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.