Stay informed with our newsletter.

Icon
Sustainability
January 23, 2024

ESG Watch: New satellites mean oil and gas companies will have no place to hide on methane emissions

The Environmental Defense Fund’s MethaneSat, will use Google’s AI technology to help it identify leaks, principally from oil and gas facilities and pipelines. © EDF/Handout via REUTERS 

Summary

  • 157 countries signed COP26 Global Methane Pledge to cut global methane emissions by 30% by 2030
  • But IEA found methane emissions from production and use of fossil fuels increased in 2023
  • Reporting of methane emissions far below IEA estimates
  • Multiple satellites will form 'system-of-systems' to help spot and stop global methane leakage
  • Satellite monitoring by OGCI in 2022-23 helped operators eliminate plumes that could have emitted 1m tonnes of CO2 a year

Cutting methane emissions is imperative in the battle against climate change – it is 80 times more potent a greenhouse gas than CO2 but only remains in the atmosphere 20 years, compared with a century or so for CO2. That means that stopping methane emissions has a much more immediate and powerful impact.

At COP26 in Glasgow, 157 countries signed the Global Methane Pledge, committing to cut global methane emissions by 30% from 2020 levels by 2030. This week, policymakers, companies and industry experts are in Geneva for the annual Global Methane Forum trying to accelerate action.

A report this month from the International Energy Agency found that the production and use of fossil fuels resulted in close to 120 million tonnes of methane emissions in 2023, a small rise from 2022, with another 10 million tonnes from bioenergy. The report, however, did not cover emissions from landfill and livestock, which account for about a third, opens new tab of human-caused methane emissions.

The IEA report said, however, that it expects global efforts to cut methane emissions from the energy sector will accelerate this year.

Until recently, it has been hard to detect leaks, as they are invisible to the naked eye. But a number of satellites have been launched that can detect methane leaks from space, and more are on the way. The U.S. and European Union have also recently announced rules that will require companies to improve the monitoring and repair of leaks.

Companies have been encouraged to sign up to initiatives such as the World Bank’s Zero Routine Flaring by 2030 initiative, the Oil and Gas Decarbonization Charter (which was launched at 2023’s COP28 summit in the United Arab Emirates) and the Near Zero Methane Emissions by 2050 scheme, developed in 2018 by industry body the Oil and Gas Climate Initiative (OGCI).

But disclosure of methane emissions remains significantly below par. The IEA said that “methane emissions implied by existing oil and gas company reporting are 95% lower than the IEA’s estimate for 2023, while emissions levels reported by countries are about 50% lower”.

Flames emerge from flare stacks at an oil field near Basra, Iraq. Satellites monitoring emissions will help investors engage with oil and gas companies over assets where western companies are partners with oil companies in markets such as Iraq. © REUTERS/Essam Al-Sudani

It said satellites will be able to provide “timely information that may otherwise be left out of disclosures”.

The most recent satellite launch, the Environmental Defense Fund’s (EDF’s) MethaneSat will use Google’s AI technology to help it identify leaks, principally from oil and gas facilities and pipelines. Later this year, the Carbon Mapper coalition will launch two satellites that will focus on point-source methane super-emitters.

Japan has been monitoring methane emissions with its Greenhouse Gases Observing Satellite (GOSAT) since 2009, and the European Space Agency will be launching two satellites to monitor CO2 emissions in 2026. Together, these satellites will form a “system-of-systems” that can help spot and stop methane leakage around the globe, providing the most complete picture yet of the extent of the problem, according to EDF.

The impact of this system could be very powerful. A satellite monitoring campaign carried out by the OGCI in 2022-23 over Algeria, Kazakhstan and Egypt helped operators to eliminate methane plumes that could have emitted around 1 million tonnes of CO2 a year if they had not been dealt with, the initiative said in a recently-published report detailing the results of its latest campaign.

The scheme, which previously identified leaks in Iraqi oil fields, “demonstrates how a systematic effort to raise awareness, deploy new technologies and initiate engagement can support local operators, including national oil companies and joint-venture partners, in their efforts to remove methane emissions at scale,” says Bjorn Otto Sverdrup, chair of the OGCI.

Now in its fourth year, the OGCI campaign uses observations by greenhouse gas monitoring company GHGSat, which is part-funded by OGCI’s Climate Investment fund, and confidential engagement with local operators to help them identify and address the sources of the emissions by sharing expertise and best practice to accelerate the reductions.

While OGCI prefers to talk to operators privately, as might be expected from an oil and gas industry body, others including civil society groups such as Rocky Mountain Institute (RMI) and EDF, as well as investors, will engage more publicly. Once information about leaks is out in the open, it not only allows operators to identify and address leaks, it increases the pressure on emitters to act.

A pump jack in the Permian Basin near Midland, Texas, U.S. Linking methane leaks to specific operators is a challenge in the Permian Basin where there are many wells owned by multiple companies. REUTERS/Nick Oxford

Having this type of information will also be crucial to developing emissions-reduction strategies, says Deborah Gordon, senior principal at the RMI. “If we’re going to reduce oil and gas consumption, we want to know which resources we want to get rid of. We don’t want to keep the most carbon-intensive barrels.”

RMI is involved in Carbon Mapper as part of a consortium that also includes the state of California and the NASA Jet Propulsion Lab.

Satellites will be incredibly useful for verification purposes, says Amir Sokolowski, director of the climate team at environmental disclosure group CDP. Efforts to quantify and tackle methane leaks have previously been based on individual sites and it has been difficult for investors and regulators to compare company performance. “Now everyone will be using the same methodology and sources of information it will enable comparability between companies.”

One of the key hopes for the satellite data is that it will help to link leaks to specific operators, which is a particular challenge in areas such as the Permian Basin in the south-west U.S., where there are many wells drilling for shale assets, owned by multiple operators.

“Sometimes, the operators we contact about leaks we have found have no idea they have a leak,” Gordon says. “Equipment is often in the middle of nowhere, but equally some facilities such as refineries are very close to population centres.” Sometimes they do know but are waiting to act until it is time to carry out routine maintenance. “We point out that there might be a better way to deal with it than dumping it into the atmosphere.”

Investors are also hungry for this information, adds Ben Lofthouse, head of global equity income at Janus Henderson. “We can’t really tell what will happen with a company’s decarbonisation plan for 2030 or 2050. It’s just numbers on a spreadsheet and there are a lot of assumptions involved. This (tackling methane) is something visible that we can focus on in the short term.

“Some fossil fuel-intensive parts of the world have been investing heavily in cleaning up their operations because the industry wants a licence to operate. I can see a situation when there is more data available where there will be a lot more robust conversations with interested parties, including investors, about addressing emissions.”

A screen grab from thermographic video footage shot with an infrared camera shows what appears to be methane gas leaking from a stack at an LNG terminal in Italy. CATF/James Turitto/Handout via Reuters

The satellites should also help investors to engage with oil and gas companies over one particularly problematic area – non-operated assets, where western companies are partners, often with state-owned oil companies in markets such as Iraq. “There is often a lack of infrastructure that means gas is still being flared and no one is really taking responsibility for it,” Lofthouse says. “Non-operated assets are rarely in scope for reporting.”

Satellites are not a silver bullet: coverage remains incomplete and it is difficult for satellites to detect the source of leaks from assets such as landfills and agriculture.

And while the granularity of the data satellites can provide is improving, there are still limits to the size of the leaks they can see. Operators and oil and gas companies are still working to understand how accurate satellite data is and how best to use it. Satellites need to be part of a portfolio of techniques and technologies, including using aircraft flying over facilities, drones and on-site leak detection programmes.

As an emerging area, the use of satellite data currently lacks a regulatory framework, according to Harvard University’s Salata Institute for Climate and Sustainability. However, in time, the information they provide will help regulators to target their efforts where they will have the most impact and speed the development of new, evidence-based policy. It will also enable public pressure to be brought to bear more effectively in areas that until now have been quite opaque.

In addition, RMI points out, open-source emissions data promotes innovation. Transparent emissions data enables businesses and researchers to develop new technologies for leak detection, capture and utilisation, leading to a more robust market for methane mitigation solutions.

The data provided by satellites will be crucial to make the problem of methane emissions more transparent, and to accelerate action and the development of new solutions to cut them.

“We need to ramp up action now. The best way to deal with this issue is to make it visible. This brave new world of satellites will be instrumental in that,” Gordon says.

Source: Reuters

Stay informed with our newsletter.