An end to the Methane Plague in Oil & Gas?
Good news wrapped in a dire crisis.
In the summer of 2022; Thousands died in record-breaking heat waves in Europe. Dozens were killed by never before seen urban flooding in Korea and the US. More than 1,500 people died in the flooding in Pakistan and the effects are far more long-lasting.
At the current emissions rate, climate change is projected to cause an additional 250,000 deaths per year from malnutrition, insect-borne diseases, and heat stress between 2030 and 2050. The World Bank estimates that climate change could lead to the displacement of more than 140 million people within their home countries in sub-Saharan Africa, South Asia, and Latin America by 2050¹.
Now the world needs change. Both in the short term and long term. The immediate challenge is how to reduce the rate of warming in the next few years and reducing methane emissions will give us a quick win. Why is that?
Why Methane now?
Methane is a colorless, odorless flammable gas that is the primary component of natural gas. This greenhouse gas is short-lived with a lifetime of about a decade before it is broken down but traps large quantities of heat during its short tenure. It possesses a global warming potential that is more than 25 times greater than carbon dioxide over a 100-year period.
In 2019, Canada alone contributed to 98MT of Methane gas emitted while Oil & Gas facilities contributed to 37% of Canada’s anthropogenic CH4 emissions, leading to the industry being the biggest source of emissions². The main culprit is upstream activities, such as the production and field processing of light and heavy crude oils, bitumen, natural gas, and natural gas liquids.
We can’t undo the damage that’s been done but methane being short-lived, can be reduced significantly in the near future if drastic action is taken.
Why Oil & Gas now?
Methane emissions come from a diverse set of sources and industries. Agricultural emissions from cattle, fermentation, rice, etc. contribute a significant portion of emissions, trailing the oil and fossil fuel sector. But why focus on the Oil & Gas industry now? In 2020, The North American oil and gas market had a revenue of $290bn which was made possible due to the incredible technological innovations in extraction, connectivity, processing, and overall efficiency³. The industry is already heavily concentrated with revolutionary technology. It is not the only industry whose emissions should be reduced but it is one of the few industries that have proven that emissions can be reduced by using the latest tech. This is great news and proves that the challenge of reducing emissions in Oil & Gas can be faced.
There has been a revolution in methane emissions monitoring and recordings such as satellite imaging through GHGSat and Optical Gas Imaging (OGI) used in Leak Detection & Repair (LDAR).
In order to achieve real change, it is imperative that more transparent data is collected on emissions. The industry needs to adopt the existing technology used for monitoring and reducing emissions and a drastic change in policy to reach the Net Zero Goal by 2050.
A real policy change?
There is growing momentum for greater action on climate change among governments, businesses, and individuals around the world as seen at the 26th Conference of Parties in Fall of 2021. There is an increasing number of countries making zero-emissions commitments, with countries accounting for 88% of global emissions, 90% of global GDP, and 85% of the global population making net-zero commitments³.
On November 11th, 2022, the US Environmental Protection Agency (EPA) is proposing to update its November 2021 proposal to achieve a more comprehensive reduction of emissions of methane and other harmful air pollution from the oil and natural gas industry. The supplementary proposal requires the reduction of methane emissions by 87% below 2005 levels in 2030 and saving enough natural gas from 2023 to 2035 to heat an estimated 3.5 million homes for the winter. The proposal is aimed to be finalized by 2023⁴.
Meanwhile, a day before the announcement of the supplemental proposal, Environment and Climate Change Canada (ECCC) proposed a regulatory framework to achieve a 75% reduction in O&G methane emissions by 2030 relative to 2012 levels. It is important to note that the Canadian proposed framework is not yet a draft rule, so details are limited at this time³.
How will this help?
Apart from the numerous environmental benefits new regulations in North America would bring, the monetary benefits cannot go unnoticed.
For Example, the EPA has estimated that the proposal would:
- Avoid 36 million tons of methane emissions from 2023 to 2035, equivalent to 810 million metric tons of carbon dioxide.
- Avoid 9.7 million tons of smog-forming VOC emissions and 390,000 tons of toxic air pollutants.
- Yield $3.1 to $3.2 billion in climate benefits per year and have total net benefits of $34 to $36 billion from 2023 to 2035.
- Increase recovery of natural gas valued at $3.3 to $4.6 billion from 2023 to 2035.
The ECCC estimates that the clean economy of tomorrow could create up to 400k to jobs the contribution of clean technology to Canada’s GDP is expected to increase from $26 billion in 2016 to $80 billion by 2026⁶. And this year, global clean technology activity is expected to exceed $2.5 trillion⁶.
But is it possible?
The 2015 Paris Agreement set an ambitious goal of limiting the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels. A steep goal that drew a lot of criticism and emphasized the unrealistic nature of the goal since we are at 1°C above pre-industrial levels as of 2022. According to the International Energy Agency (IEA), a sustainable development scenario was proposed, outlining key steps needed to achieve this feat, which, based on the current situation in the Oil & Gas industry, as seen below, seems very daunting.
But to get close, we need a joint effort from every industry. The main challenge we face is, does the industry have the will to change. We have the technological tools and incentives in place which is a piece of good news wrapped in a dire crisis. Policies by the EPA and ECCC might just be the radicle change we need.
My sister, Keerthana and I are working to develop an edge-based cloud architecture that is a stepping stone in the right direction to create this change: https://medium.com/@keetu.jk/its-about-real-time-to-reduce-methane-emissions-aff9deeafb6e
References
- https://www.nrdc.org/stories/what-are-effects-climate-change
- https://www.canada.ca/en/services/environment/weather/climatechange/climate-plan/climate-plan-overview/emissions-reduction-2030/plan/
- https://www.researchandmarkets.com/reports/5360240/oil-and-gas-in-north-america-market-summary
- https://www.epa.gov/system/files/documents/2022-11/OIl and Gas Supplemental. Overview Fact Sheet.pdf
- https://highwoodemissions.com/
- IEA, Oil and gas sector methane emissions, historical and in the Sustainable Development Scenario, 2000–2030, IEA, Paris https://www.iea.org/data-and-statistics/charts/oil-and-gas-sector-methane-emissions-historical-and-in-the-sustainable-development-scenario-2000-2030, IEA. Licence: CC BY 4.0
