Oil Majors And Biden Administration Pledge To Control Methane Emissions

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At the COP 28 Climate Conference in Dubai, the fossil fuel companies are still wrangling about how they can increase their production while keeping the world from becoming a baked potato. One key way is to reduce direct methane leaks and emissions.

When it comes to methane gas — often incorrectly known as “natural gas” — we need to draw a sharp distinction between the gas that is burned and the gas that escapes into the atmosphere during extraction, transmission, and storage. Methane that escapes into the atmosphere is 80 times more powerful when it comes to causing the Earth to overheat than carbon dioxide. It doesn’t stay in the atmosphere as long, but while it is there it works overtime to heat things up.

For decades, oil producers have treated methane as an annoying nuisance. They think it is more trouble than it is worth to capture it. Gas producers also like to whine that plugging all the leaks in the system is just too gosh darn expensive — as if having a sustainable planet has no value to them.

Today the Washington Post is reporting  that many of the world’s biggest oil companies agreed in Dubai on Saturday that they would slash methane emissions from their wells and drilling by more than 80 percent by 2030, an ambitious plan that could help curb runaway global warming.

That pledge is an unexpected surprise, one which could be one of the most consequential results of COP 28. Sultan Al Jaber, the leader of the climate talks who is also the head of the Abu Dhabi National Oil Company, had pushed for the new agreement as a way to demonstrate how petro-states and oil and gas companies can speed the transition to cleaner energy. Al Jaber said he is committed to transparency and hoped more companies would join the pledge, which covers more than 40 percent of global oil production. “We must bring everyone in to be accountable,” he said.

The plan commits state owned giants such as Saudi Aramco, along with corporate super-majors including ExxonMobil, to limit emissions of methane from their drilling and production work. It also includes international monitoring efforts intended to hold companies to their promises. The agreement was announced the same day that officials said the US is promulgating new rules that will limit methane emissions from the oil and gas industry by nearly 80 percent over the next 15 years.

Halving methane emissions by 2030 could slow the rate of global warming by more than 25 percent and start a path to prevent another 0.5 degrees Celsius of warming by 2100, according to 2021 research by a team of scientists from the Environmental Defense Fund and several U.S. universities.

The energy sector ranks as the second largest source of methane emissions from human activity, and most of that comes from oil and gas, according to the International Energy Agency. The oil and gas industry alone accounts for 14 percent of the world’s annual methane emissions, the agency estimates. Currently the industry leaks about 2 to 3 percent of all the gas it produces directly into the atmosphere, according to the Environmental Defense Fund. The pact would require them to reduce those emissions to just 0.2 percent of their output.

“If you add it all together, what it amounts to is really momentum building at a time when we really need it,” said Gina McCarthy, who once was President Biden’s top climate adviser and was the first to introduce methane limits on oil and gas operations as EPA administrator under Barack Obama. “People are ready to rally around an answer.”

Natural Gas Is Not A Bridge Fuel

Some companies and environmentalists initially pitched vast and newly cheap supplies of natural gas as a cleaner alternative to coal, a “bridge fuel” until fully carbon-free sources of energy could supplant fossil fuels. But new science, showing that leaks from methane undid much of gas’s climate benefits, undercut those claims. It has ushered in a wave of regulatory crackdowns and political debates, and led oil and gas companies to spend millions to protect their businesses with new technology to detect and stop those leaks.

Levels of methane in the atmosphere have continued to rise. The National Oceanic and Atmospheric Administration recorded the fourth-largest annual increase in 2022 since measurements began in 1983. Levels are now 2.5 times what they were in pre-industrial times.

US officials have been working with Turkmenistan, the world’s fourth largest methane emitter, and Kazakhstan, the 12th largest. Both have joined the methane pact and Kazakhstan announced plans for new national standards in a bilateral deal with the United States. To receive the grant money, countries would have to commit to reducing their methane emissions from oil and gas production to nearly zero.

Al Jaber has spent this year prodding companies to join what he is calling the Oil and Gas Decarbonization Charter, which also requires commitments to stop burning off gas as waste — a process known as flaring — at their well sites by 2030 and effectively zero out all greenhouse gas emissions from their operations from 2050. While that is all welcome news, ADNOC with Al Jaber as its head, has refused to end flaring over the past decade and failed to report its own methane emissions for years.

The key element is getting giant and often secretive state-owned oil companies to join the commitment and agree to outside monitoring. Brazil’s and Libya’s state-owned producers, among others, are also part of the deal, and more than a dozen such companies are making first time commitments to eliminate emissions, which can now be tracked via satellites.

Several environmental and international groups Saturday also announced a coalition to do that, backed by $40 million from Bloomberg Philanthropies. The IEA, an arm of the UN, EDF, and RMI — groups that already gather or use satellites and data to track methane emissions — agreed to collaborate and expand their efforts to hold oil and gas companies to their new methane commitments. They said they would work together to share that data with financiers, commodity buyers and governments, and help countries, especially developing economies, to address their leaks. They also plan to advocate together for stronger government regulations.

JPMorgan Chase — a major funder of energy companies — had issued an analysis in the days leading up to COP 28 encouraging oil and gas companies to aggressively reduce emissions, calling it an opportunity for both businesses and climate. It cited IEA estimates that the industry could eliminate more than 75 percent of its methane emissions with existing and well-known technology.

US Announces New Methane Emissions Rules

US Methane emissions by source from US EPA
US Methane emissions by source from US EPA

Also in Dubai on December 2, EPA Administrator Michael Regan set forth final standards to limit methane at U.S. oil and gas wells. The agency said it would impose stricter requirements for preventing and stopping leaks on about 900,000 new and existing wells, a move the oil industry once fought for years but which now many leading companies accept.

The announcements reflect how the oil and gas industry — long vilified by climate activists and for good reason — has become central to global climate negotiations. Because methane is so potent, US officials, the companies and climate advocates are focusing on it as one of the fastest ways to limit the acceleration of global warming. If successfully implemented, the initiatives could be a historic climate achievement, supporters say.

“If those promises are met, it’s got the potential to cut temperatures we would otherwise see within the next decade … more than anything agreed to at prior COPs, more than anything I’ve seen in my entire career over 30 years,” said Fred Krupp, president of the Environmental Defense Fund. “There have been a lot of pledges made at COP that have never been fulfilled. We feel like we have to set up a robust accountability system.”

Some activist groups, however, said the rules fall short of addressing the real problem — fossil fuel production. “It’s not enough to tinker around the edges,” said Gabrielle Levy, associate director of methane gas communications for the group Climate Nexus. She said the world needs to take “concrete steps to cut those emissions at the source — by eliminating the source.”

Global efforts on methane have taken off in recent weeks, including a breakthrough at Sunnylands, Calif., in talks between U.S. climate envoy John F. Kerry and Xie Zhenhua, his counterpart from China, the world’s largest greenhouse gas emitter. China publicly committed for the first time to curbing methane and other greenhouse gases across its economy by 2035, but did not set any specific limits.

Regan said in a statement that Biden was taking “strong action” Saturday to make the industry move faster. “We’ve crafted these technology standards to advance American innovation and account for the industry’s leadership in accelerating methane technology.”

The new rule, which largely resembles proposals the administration made over the past two years, includes a phaseout of flaring at new wells as well as requirements for more leak monitoring with the help of new technology. Limits on emissions from valves, pumps and storage tanks and a program to spot giant, unintentional releases that are often short-lived but the biggest sources of methane emissions are also part of the package.

“Even as we press to phase out our reliance on fossil fuels, we must work to clean up existing operations rapidly and rigorously, and today’s announcement does just that,” said White House National Climate Adviser Ali Zaidi.

The EPA also will issue first time guidance to states that will have to set reduction requirements on existing sources of methane. The Clean Air Act places the details of such plans in the hands of state agencies, and the EPA is giving them two years to complete those plans under these new rules, the federal agency said. “They’re the strongest methane regulations on the planet,” Fred Krupp told the Washington Post.

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