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Energy & Climate

Untapped Potential: Reducing Global Methane Emissions from Oil and Natural Gas Systems

We analyze current and potential future methane emissions from the oil and natural gas industry worldwide. ​

Based on the best currently available data, around 3.6 trillion cubic feet (Tcf) of natural gas escaped into the  atmosphere in 2012 from global oil and gas operations.  This wasted gas translates into roughly $30 billion of lost  revenue at average 2012 delivered prices, and about 3% of  global natural gas production.

Because the primary component of natural gas,  methane, is an extremely potent greenhouse gas (GHG),  methane leakage has important climate implications.  Methane escaping from oil and gas operations totaled  approximately 1,680 million metric tons of carbon dioxide equivalent (MtCO2e) in 2012, calculated based on  methane’s 100-year global warming potential (GWP). If it  were a country, oil and gas methane emissions would  rank as the world’s seventh largest emitter, coming in just under Russia. Using methane’s 20-year GWP – a  measure of the short-term climate impact of different  GHGs – increases the share of oil and gas methane to over  8% of global GHG (with emissions of 5,650 Mt CO2e), the  equivalent of about 40% of total CO2 emissions from  global coal combustion in 2012.

The 3.6 Tcf of lost natural gas across the world would  rank as the world’s seventh largest natural gas producer, with nearly as much escaped gas globally as Norway’s  total production in 2012.

The majority of oil and gas methane leakage comes from  a handful of countries: the top seven emitting countries  were responsible for over half of the global total in 2012;  the top 30, including the EU, accounted for three quarters.  The global methane emissions estimates included in this report, while more detailed and robust than anything  currently available, are limited by the lack of credible,  up-to-date estimates for most countries. Better  national  inventory practices and more regular reporting are  critical to improve our understanding of the scale of the  methane leakage challenge and to inform effective  mitigation strategies.

A Growing Problem Absent New Efforts

Global oil and gas methane emissions will grow absent  further efforts to reduce leakage. For example, in our  central oil and gas production growth scenario (and  using currently available leakage data), emissions  increase 23% between 2012 and 2030. A 23% increase  would add over 380 MTCO2e in 2030 (using a 100-year GWP), equivalent to Poland’s total GHG emissions in  2012. By comparison, the International Energy Agency (IEA) projects global energy-related CO2 emissions will  grow by only 15% between 2012 and 2030.

Cost-Effective Abatement Opportunities

For oil and gas producing countries, controlling  methane emissions can provide a significant and  potentially low-cost opportunity to achieve additional  GHG abatement in 2020 and beyond. If just the top 30 oil  and gas methane emitting countries were to reduce those  emissions 50% below 2012 levels by 2030, this would  prevent the loss of 1.8 Tcf of natural gas supply  worldwide. Additionally, a 50% decrease would reduce  overall global emissions by roughly 700 MTCO2e using a  100-year GWP, nearly the equivalent of total Canadian  GHG emissions in 2012. Reductions of 75% below 2012  levels in 2030 would increase natural gas supply by 2.7  Tcf and achieve over 1,000 MTCO2e of GHG abatement using a 100-year GWP, nearly the equivalent of  Germany’s total GHG emissions in 2012. Using a 20-year  GWP for methane, the 50% goal would achieve  reductions of over 2,300 MTCO2e (the equivalent of India  and the EU’s combined CO2 emissions from coal combustion in 2012) and the 75% goal would reduce  emissions by around 3,400 MTCO2e (nearly as much as  all CO2 emissions from coal combustion from OECD  countries in 2012).

What It Means

Methane emissions from oil and gas operations  worldwide represent a significant loss of natural gas  resources and is a material contributor to total GHG  emissions and global climate change. Despite its climate  significance, very few countries have taken steps to  regulate methane emissions from the oil and gas sector or set specific goals to reduce emissions in the future.  This leaves a potentially cost-effective source of GHG  abatement on the table, one that complements and  reinforces other GHG reduction efforts. For many  countries, tackling oil and gas methane emissions, including as a component of their Intended Nationally-Determined Contributions to the UN agreement to be  adopted this year in Paris, could make a meaningful   contribution to their overall GHG reductions by 2030.

Due to methane’s short-term climate impact, reduction  of methane leakage today can deliver immediate climate  benefits while nations pursue longer-term strategies to  reduce CO2. However, unless methane emissions are  taken into account, the overall GHG benefits of natural  gas will be overestimated. It will be essential for  countries to integrate better measurement and  management of oil and gas methane emissions into the  development, assessment and implementation of long-term  GHG mitigation plans to maximize GHG reductions  from those policies.

To do this, countries and their oil and gas industry  partners need to significantly improve measurement and  accounting of methane emissions from the sector.  Improved estimation methods and more frequent  reporting is critical both to improve our understanding  of the magnitude of the oil and gas methane challenge  and to enhance the effectiveness of GHG mitigation  strategies