Snowballers: operational emissions that quickly add up

Small-scale operational emissions come from innumerable sources that have a huge cumulative effect. These sources include leaking valves, pneumatic devices, venting from tanks and wellheads, and incomplete combustion in generators and flare stacks.

Estimates of the scale of absolute emissions and the contribution of each source vary widely. Few jurisdictions report emissions in detail and those that do often exclude key sources. Data from the from the U.S. Environmental Protection Agency (US EPA) excludes facilities emitting less than 25,000 t/year, for example. Identifying and quantifying losses consistently is a serious challenge.  

With limitations to all three classes, more precise and regular methane measurements are needed to assess routine methane loss from all oil and gas facilities.

A key determinant in those assessments will be the average level of emissions from a typical field. We estimate methane emissions in our Emissions Benchmarking Tool. Typical methane losses per field are small — less than 500 kg/hr (around 0.65 mmcfd), which is below the measurable resolution of most current satellites – but around 96% of all fields have emissions on this scale, making it a large, cumulative problem. More significant emissions from larger fields are often spread across multiple production facilities, making them harder to quantify.

The future of methane detection and monitoring

Consistent methane monitoring through satellites presents several challenges. Geostationary satellites can provide images with high temporal frequency, but a dedicated GHG Geostationary sensor is not yet operational. Orbital satellites provide near-global geographical coverage, but the lower frequency of their measurements over a particular point limits the data’s applicability for user cases such as consistent monitoring and regulatory enforcement.

Methane is also highly dispersible; a methane molecule can travel from North America to South Asia in less than two weeks. Frequency gaps, therefore, make it difficult to track the source of methane Translating any satellite imaging into facility-level emissions data also requires a sizeable, continuous amount of granular weather and atmospheric measurements on the ground.

Additionally, current satellite technology has trouble detecting methane emissions in offshore operations. Satellites use spectrometers to measure different molecules in the atmosphere by observing levels of solar energy absorbed at different electromagnetic wavelengths. However, similarities in the absorption profiles of water, methane and other pollutants make measurements over water, especially in rough seas, particularly difficult. As more finely tuned spectrometers become mainstream, it will be possible to discern between methane and other ambient molecules.

Future innovations to methane tracking instruments promise solutions to all these issues and more.

As measurement improves and becomes less costly, the ability and willingness of both companies and governments to tackle methane will be highly influenced by the ‘what’ and the ‘where’ of emissions. There is a direct commercial imperative to act in regulated environments where carbon or methane costs apply. The incentives might be less obvious elsewhere, with little or no government push.

Oil and gas producers must turbocharge abatement

Action on methane remains one of the most achievable ways for oil and gas companies to make a sizeable dent in their scope 1 and 2 emissions. OGCI member companies have already reduced upstream methane intensity by nearly 45% in the past five years. However, the whole industry must grasp the nettle to have real impact.

1. Monetisation

Companies' immediate focus should be on getting captured emissions into the sales stream. Additional revenues can help offset abatement costs. However, the cost of addressing methane leaks is often greater than the revenue loss and leaves companies with insufficient incentive for action.

Proactive upstream players can work with third-party midstream providers to avoid flaring and venting. Tougher regulation, including carbon prices and specific charges for methane leaks, will encourage operators to access markets by investing in domestic or export infrastructure.

Methane reduction as a service may also have a future. This is currently monetised in the relatively uncertain offset market amid growing interest. The American Carbon Registry recently published a methodology to generate offsets from plugging methane leaks resulting from orphan and abandoned oil and gas wells. While prices for these offsets remain low, as more stringent regulations come into play those offsets should become more valuable.

Advocating for additional financial incentives can be effective. Gas buyers are becoming increasingly focused on the methane emissions associated with their energy supplies, and the UN Environment Programme has proposed a methane supply index to allow gas buyers to understand associated methane emissions. Operators in the US and Europe are already successfully negotiating premium pricing for certified low-methane-emitting production.

2. Deployment of known solutions

Doubling down on existing mitigation efforts brings immediate benefits. Most methane reduction methods using existing technology and equipment are relatively simple and cost-effective. Reducing venting and flaring is an urgent task that does not require technological improvements and is fairly straightforward if operators have access to infrastructure, gas markets and incentives.

More regulatory support will be required in hotspots such as Africa, Russia and Asia. For routine operational emissions, progress can easily be made by better monitoring for leaks, tightening valves and swapping out high-bleed devices.

3. Partnerships and collaboration

Groups advocating for rapid methane reductions, such as the UN, the OGCI and the Methane Guiding Principles, are leading the way on best practices, but need broader participation. OGCI members include most of the world’s largest upstream companies but represent only a fraction of global emissions.

The industry must work with joint-venture partners and others to expand efforts. For example, the Majors’ operated methane targets exclude the 41% of their portfolios operated by others. Widening this to include non-operated assets would improve monitoring and spread resources and costs.

More transparency on best practices and the participation of non-industry partners would lead to more efficient research and development. This could help shift the emphasis from ‘naming and shaming’ to collaborative innovation on cutting harder-to-abate emissions.

Industry methane targets should also be overhauled. Currently self-set and self-monitored, there are multiple methodologies, timeframes and goals. The upstream sector would benefit by working together on target setting; so far only the Majors have signed up to standardisation.

Governments must step up to the plate

Similarly, government action will be vital to reducing methane losses. We see three high-level actions that could stimulate more progress globally.

1. Greater ambition

Voluntary pledges can only take the world so far. Ambition must translate into implementable and enforceable policy. An obvious starting point is global collaboration on stopping all large-scale flaring and venting of methane. Efforts in the US and Europe to address small-scale methane leaks are touted as positive steps but must go further.

2. Consistent enforcement

Lofty targets and financial penalties for non-compliance are meaningless unless effectively enforced. Sidesteps must be avoided and loopholes closed. Policymakers and regulators must also collaborate with industry to set realistic targets and timelines for emission reductions while ensuring that fees and fines are levied appropriately.

3. Financial support for technology

Governments should support funding to improve both measurement technology and abatement solutions. As part of the US IRA, US$350 million in funding is available to help monitor and reduce methane emissions, while in Canada, the CleanBC Industry Fund has granted Cdn$113 million for decarbonisation initiatives.

A flexible approach to technology makes sense. While the IRA allows the use of any applicable technology, it also requires blanket OGI surveys. Where this results in cost duplication, producers will be discouraged from adopting potentially more accurate leak detection technologies.

Similarly, over-dependence on a single technology can stymie progress. Satellites are not a silver bullet; but they are part of the solution. Excitement over the role of satellites must not overshadow opportunities to use existing monitoring methods as data accuracy improves.