Why global oil and gas suddenly increased methane emissions
When the coronavirus spread around the world, there was a drop in industrial activity and oil and gas drilling. This, as expected, led to a reduction in emissions of almost all greenhouse gases. However, methane emissions not only did not decrease, but even increased by a third.
A recent report from analyst firm Kayrros showed that global methane emissions increased 32% in the first eight months of 2020 compared to the same period in 2019. This was due to an increase in leaks, almost always from the oil and gas and transportation industries.
“This increase in methane emissions is of concern and completely contradicts the direction set by the 2015 Paris Climate Agreement,” said in a comment to the report Kayrros President Antoine Rostan.
“While energy industry stakeholders talk a lot about the fight against climate change, global emissions of this gas continue to skyrocket. In 2019 alone, we tracked the cumulative volume of visible large methane leaks of 10 million tonnes. That's the equivalent of over 800 million tonnes of CO2 over a 20-year period. ”
“ The Achilles heel of the oil and gas industry is methane emissions, ”the head of the International Energy Agency, Fatih Birol, said last year. “And the good news for the industry is that it can be corrected with existing technology, using best practices.”
Indeed, many companies — both in Europe and the US — take methane emissions seriously. They set targets for monitoring methane leaks and are working to reduce them. However, there is one serious difficulty: these promises are made only for projects where these companies are operators. However, there are many projects that are so-called unmanaged assets or joint ventures.
Private companies alone will not be able to reduce methane emissions
A recent EPF study in partnership with Rockefeller Asset Management has shown that Big Oil's emissions ambitions may fall short of investors and regulators simply because large companies do not have the necessary control over all projects.
“Between 70% and 90% of the producing assets of large oil and gas companies are joint ventures. At the same time, the emission reduction targets announced by these companies apply only to projects that they fully control, ”said Meredith Block, Senior Vice President of Rockefeller Asset Management and Senior Analyst at ESG.
The share of unmanaged assets in the nine largest public oil companies is quite high – 40%. Most of all have Total, where they make up 66% of all projects, and Eni, where this figure reaches 60%. Exxon is next with 58%. BP, Chevron and Equinor are doing better with unmanaged assets at 36%, 35% and 40%, respectively.
This means that, on average, 40% of large oil projects are decided by another company to cut emissions. And these are often state-owned oil companies, which, as a rule, have their own priorities, since they are not responsible to shareholders, but to the government.
“State-owned companies control almost 58% of world oil production and 51% of gas production,” – the EDF report / Rockefeller Asset Management. This means that solving the methane problem will require their participation along with private corporations. : ///
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