Abating methane can have a relatively quick impact on reducing global warming
The extraction and transportation of oil, gas and even coal release methane through defective valves or pipes. Representative photo: iStock. Over $75 billion in funding is required to slash just energy-related methane emissions by 75 per cent by 2030, two-thirds of which would be generated through oil and gas operations, a new report by the International Energy Agency (IEA) said.
Around $55 billion would be required in upstream oil and gas facilities. Over $20 billion would be required in downstream facilities, noted the report titled Financing Reductions in Oil and Gas Methane Emissions.
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The extraction and transportation of oil, gas and even coal release methane through defective valves or pipes, referred to as fugitive emissions. Fixing the malfunctioning parts and processes by employing leak detection and repair (LDAR) programmes prevents methane emissions amounting to 13 million tonnes (Mt) according to the IEA’s 2030 Net Zero Emissions (NZE) scenario, the report noted.
Therefore, roughly 70 per cent of the proposed amount to abate methane emissions is capital expenditure on new equipment. Of which, 30 per cent is only pertaining to operating costs, primarily related to LDAR programmes, the report said.
Around 6 Mt of methane emissions may be avoided using vapour recovery units by capturing the gas before flaring or venting by 2030.
The practice of burning pressurised natural gas during oil extraction, either as a safety concern or because of being uneconomical to sell, is known as flaring and releases methane emissions. Similarly, venting is the process of directly releasing methane gas into the atmosphere during oil and gas extraction.
Furthermore, around 21 Mt of methane release can be avoided by replacing pumps, controllers, compressors and other equipment with low- or zero-emissions alternatives, the report stated.
“The final 6 Mt is avoided through additional processes and measures such as blowdown capture, reduced emissions completion and routing tank vents to recovery systems,” the paper said.
With the rapid deployment of the above-mentioned technologies, methane emissions from oil and gas operations will fall to 17 Mt in 2030 from 80 Mt in 2022, according to the NZE scenario for 2050.
The energy sector contributes to nearly 40 per cent of anthropogenic methane emissions, while methane emissions are also generated from agriculture and waste.
However, tackling methane emissions from the oil and gas sector amounting to 80 Mt is essential to limiting global warming in the short term as it has immense potential for abatement, the report said.
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Reduction in methane emissions accounts for more than 15 per cent of all greenhouse gas emissions reductions in the IEA’s NZE scenario by 2030.
Abating methane is a low-hanging fruit — it can have a relatively quick impact on reducing global warming since methane lasts in the atmosphere for only about a decade, said Avantika Goswami, programme manager, Climate Change at Delhi-based think tank Centre for Science and Environment.
“And considering that technologies to abate methane in oil and gas have been deemed to be cost-effective and mature today, the sector must step up and take the lead, particularly in developed countries like the US and the Middle Eastern oil and gas producers,” she added.
Just under $34 billion in spending is needed in high-income countries, $27 billion in upper-middle-income countries, $13 billion in lower-middle-income countries and $3 billion in low-income countries, the report stated.
Globally, the sale of captured methane would fetch oil and gas producers returns at $45 billion, the researchers hypothesised. Still, institutional and economic barriers prevent the mobilisation of investment.
“More than 40 per cent of the emissions reductions to 2030 come from measures with no net cost (assuming an 8 per cent rate of return over the lifetime of the measure),” the report said.
This is because the capital and operating costs of the abatement measures are less than the market value of the additional gas that is captured and can be sold, the report added.
Oil and gas companies should bear the primary financial responsibility of methane abatement measures as the global oil and gas industry’s net income doubled to nearly $4 trillion in 2022, IEA emphasised. Of which, 2 per cent of the expenditure would be enough for methane emissions reductions across the supply chain according to the NZE scenario by 2030.
A new international effort is needed from governments, industry and philanthropy to fill the financing gaps identified in this report, notably the $15-20 billion of spending required in low- and middle-income countries, the paper read.
“Non-binding pledges like the Global Methane Pledges are unlikely to drive this action — the mandate must be driven by governments,” Goswami added.
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