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IEA calls for 'urgent' action to cut methane emissions from oil, gas sector

Highlights

Urges companies, governments, regulators to act

10% drop in emissions in 2020 due to lower output

Emissions could rebound without greater actions

London — The International Energy Agency on Jan. 18 called on on companies, governments and regulators to take "urgent action" to cut methane emissions from the oil and gas sector, and warned that emissions could rebound from 2020 levels unless more methane leaks were addressed.

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Methane is a much more potent greenhouse gas than carbon dioxide, with some estimates suggesting it is 84 times more potent than CO2 over a 20-year timeframe.

According to the IEA's 2021 update of its Methane Tracker, oil and gas operations worldwide emitted more than 70 million mt of methane into the atmosphere last year, broadly equivalent to the total energy-related CO2 emissions from the entire EU.

While this was a 10% reduction compared with 2020, the IEA said it was more a result of producers slashing output in response to the historic shock of the COVID-19 crisis, rather than dedicated effort to prevent methane leakage.

"A large part of the drop in methane emissions in 2020 occurred not because companies were taking more care to avoid methane leaks from their operations, but simply because they were producing less oil and gas," the IEA said.

"As such, there is clearly a risk that this downward trend will be reversed by an increase in production to fuel a rebound in global economic activity," it said.

IEA Executive Director Fatih Birol called on the oil and gas industry to make sure there is no resurgence in methane emissions as the world economy recovers.

"There is no good reason to allow these harmful leaks to continue, and there is every reason for responsible operators to ensure that they are addressed," Birol said.

"Alongside ambitious efforts to decarbonize our economies, early action on methane emissions will be critical for avoiding the worst effects of climate change. There has never been a greater sense of urgency about this issue than there is today," he said.

'How-to' guide

To help accelerate these efforts, the IEA said it was releasing a "how-to" guide that governments and regulators can use to bring down methane emissions from oil and gas operations.

It said that reducing methane emissions would be cost-effective for oil and gas companies given that methane lost into the atmosphere could be sold as natural gas.

"The costs of improving operations or making repairs to prevent leaks can often be paid for by the value of the additional gas that is brought to market," it said.

Birol said that while industry should act "visibly and quickly," there is also a strong role for governments to play.

Government policy, he said, could incentivize early action by companies, push for transparency and improvements in performance, and support innovation in getting results.

"One important avenue, especially for countries with large oil and gas sectors, will be to include commitments on methane in their new or updated pledges in advance of the COP meeting," he said.

"This is also the moment for companies to put all their weight behind this effort."

Consumer behavior

The IEA said the case for action was not just environmental or reputational.

"There are increasing signs that consumers are starting to look carefully at the emissions profile of different sources of gas when making decisions on what to buy," it said.

"A gas producer without a credible story on methane abatement is also one that is taking commercial risks."

In November, France's Engie halted talks over a potential long-term supply agreement with US LNG developer NextDecade amid pressure not to import LNG produced from shale gas.

The not-for-profit MiQ partnership in late 2020 launched a certification scheme that would see gas suppliers able to differentiate themselves by offering gas with proven lower methane intensity.

MiQ has set up an independent framework that would lead to gas being graded from A to F, depending on the volume of methane emissions at the upstream level.