Operating the modern world without fossil fuels appears to be a distinctly difficult task, if not entirely impossible to achieve if we do not make serious adjustments to the global energy consumption mix. Coal has dominated the global electricity generation for much of the last 200 years, sending huge quantities of carbon dioxides, sulphur oxides and nitrogen oxides into the atmosphere – it is an abundant, easy to burn for fuel and cheaper to burn than most other alternatives. It is also the greatest burden on the atmosphere and global heating, heating that we know must be restricted to 1.5°C.

In sourcing a suitable alternative for coal or heavy fuel oils, natural gas or liquefied natural gas (LNG) is the go-to solution. It is widely abundant, it is often cheaper to produce than oil and it generates power nearly as effectively. Although iconsidered by many to be the most suitable route to lowering carbon dioxide emissions and potentially reverse the damage to the atmosphere, natural gas comes with a major emissions problem itself – methane. While it does not emit carbon dioxide in the same quantities, it is a major cause of global methane emissions – a gas with more intense heating properties albeit that last far shorter in the atmosphere.

As a response to this emissions threat, a global initiative led by governments and energy, finance and investment industry actors have joined forces to limit the potentially harmful affects of methane emissions to establish the Global Methane Pledge.

The Energy Council looks at how this initiative was formed, what they hope to achieve and what concerns this may hold for natural gas producers (and consumers) as we ramp up our global LNG consumption.

The Methane Problem

Reducing the methane produced from human activity is a core objective of the energy transition. The IEA’s “Net-Zero Scenario” states that to achieve net-zero by 2050 there must be a 75% reduction in methane emissions from oil and gas production between 2020 – 2030, a short eight years away.[ The problem is pronounced due to methane’s intense heating capacity, up to 80 times greater than carbon dioxide.

The drastic need to make these reductions is necessary due to the natural methane emissions society has less ability to abate, roughly 40% of the total – from wetlands, permafrost and livestock ‘gastroenteric releases’. The sixty-percent remaining methane emissions are man-made, and within that portion, oil and gas activities account for half of all methane emissions. Such a significant impact cannot be overlooked and must be challenged, fortunately however our capability to abate these emissions is within reach for a relatively small price of $13 billion, according to the IEA – a cost that should be seen as an investment.

“This is less than the total value of the captured methane that could be sold (based on average natural gas prices from 2017 to 2021), meaning that related methane emissions could be reduced by almost 75% at an overall savings to the global oil and gas industry”.

What the Pledge promises

A range of disparate national missions that have historically sought to place domestic concerns before global problems has muddied emissions targets. Paris Climate Agreements made significant steps to build consensus, however these have not been strictly adhered to without any punishment for non-compliance.

The Global Methane Pledge seeks to acknowledge the agreements that have preceded it and to build greater action upon those collaborations. Led by the US and the EU, together with 110 other countries, the Pledge was launched at COP26 to “catalyze global action and strengthen support for existing international methane emission reduction initiatives to advance technical and policy work that will serve to underpin Participants’ domestic actions.”

Without concerted action from across the globe, society and industry, such an initiative would simply not be successful. Fortunately, led by the US and EU, the coalition comprises 100 countries which “represent over 50% of anthropogenic emissions and over two-thirds of global GDP.”

Together the efforts intend to achieve a 30% reduction in global methane levels (against 2020 levels) to remove up to 8 gigatons of carbon dioxide equivalent emissions by 2030. Such a reduction would inhibit 0.2°C of atmospheric heating by 2050, each degree a crucial step to stopping massive climate consequences.

By agreeing to this pledge industrial actors, development agencies, financial institutions and national governments are actively engaging on knowledge and resource transfers to be successful. As a result, the hope that action can prevent catastrophe is beginning to build once more.

Methane Reduction Solutions & What Lies Ahead

Reducing global methane emissions are somewhat easier to abate than carbon dioxide emissions due to the limited circumstances in which they form; notably, natural gas flaring, leakages and system inefficiencies. Herein, it is conservatively estimated by the IEA that developing more effective Leak Detection and Repair (LDAR) programmes could effectively remove 14.5Mt on methane annually. In addition, outlawing ‘non-emergency gas flaring and venting’ could reduce methane emissions by 15.5Mt.

With the emergence of emissions trading systems, it appears increasingly likely that all abatement measures could be achieved with very little capital lost if a methane price of $450/tonne can be achieved. This needs both political and industrial desire to achieve, but is seemingly at the precipice to be realized.

It is important for climate action to not become narrowly focused toward carbon emissions, as methane plays its own significant heating role – but it is where we can replace coal’s emissions while reducing methane emissions, all without the loss of effective power generation capacity.

Other alternatives, such as hydrogen (blue or green), biofuels and synthetic replacements – each have significant cost constraints that inhibit their wider uptake. Green hydrogen is expected to become the ‘fuel of the future’, but even with global investment initiatives and multi-billion dollar projects in development, the global oil and gas markets will experience little competition from that sector in the near future.

This is not the case with natural gas and methane emissions – the opportunity exists to radically reduce emissions for little to no-extra cost of production. And to largely eliminate emissions with strategic investments of capital and some bold shifts to operating procedures.