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    EU methane strategy: Should we leap before we look? [GGP]

Summary

The European Commission’s forthcoming methane reduction strategy for oil, gas, coal mines, waste and agriculture should not wait for more accurate data before requiring emission cuts, stakeholders are urging.

by: Caroline Gentry, Clean Energy Insight

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Complimentary, Global Gas Perspectives, Insights, EU

EU methane strategy: Should we leap before we look? [GGP]

Fixing leaks and cutting down on flaring and venting is critical for natural gas to claim the high ground over coal when it comes to greenhouse gas emissions. Methane was flagged as a priority in the Commission’s Green Deal, and a study including how to measure, monitor and mitigate emissions, an assessment of existing policies from around the world and recommendations for mitigation will be published in August, said Monika Zsigri, Policy Officer in the Commission’s energy division. There is still time for stakeholder input, she said. A methane strategy will be published well before the end of the year, possibly followed by a legislative proposal.

Europe is somewhat behind on methane regulation compared with other countries, and the Commission’s comments during two stakeholder calls last week suggest the emphasis will initially be more on measurement than enforcing reductions, said Jonathan Banks of the Clean Air Task Force.

“We recognise that we will never have perfect data, but there are also things that can be done right now in the EU to start reducing emissions.  Starting with that lower hanging fruit, like finding and fixing leaks and upgrading existing equipment, will immediately begin to improve our understanding of emissions in the atmosphere and help refine our ongoing emissions reduction strategies,” he told Clean Energy Insights.  “Put another way, waiting to act until perfect emissions data exist would result in unnecessary and costly delay - harming the climate, public health, and even the gas industry's social license to operate.”

At the same time there are many gaps in the data sets, said Stephanie Saunier, Managing Director, Carbon Limits – one of the study’s participants. There are for example very limited data on abandoned coal mines, and a high degree of variance between facilities even within the same segment. “It’s not as robust as we would hope in an ideal world,” she said during the stakeholder call.

Many countries estimate emissions based on calculations using outdated emission factors and activity levels. The Commission wants Member States to calculate emissions according to the Tier 3 methodology of the Intergovernmental Panel on Climate Change, which is more onerous than Tier 1 or Tier 2, which most are using now.

Without accurate and verifiable measurements, oil and gas companies may be accused of ‘greenwashing’ and hiding the extent of greenhouse gas releases into the atmosphere. Some studies are showing positive results, for example the TNO / Netherlands Oil and Gas Exploration and Production Association project on offshore Dutch oil and gas production, where measured methane values are comparable with data reported by industry. The European Union MEMO2  (MEthane goes MObile – MEasurements and MOdelling) project carried out two studies to combine bottom-up and top-down quantification: the ROmanian Methane Emissions from Oil & gas (ROMEO) and CoMet to measure methane from oil and gas fields in Romania and coal mines in Poland. Initial results were shown at the EGU 2019.

Other studies have suggested that emissions from natural gas production could be higher than previously thought, for example because flares have malfunctioned or there have been very large leaks. While this is bad news from an environmental perspective, it could create an economic incentive to fix the problems.

From a purely economic perspective, many efficiency upgrades make sense. The International Energy Agency says in its methane tracker that 75% of methane emissions from the oil and gas sector could be cut with existing technologies, half of which would pay for themselves with the sale of the fuel saved. A study by the Environmental Defense Fund (EDF) and others used satellite data to show that methane emissions across the US Permian Basin in the 11 months to March 2019 leaked at a rate of 3.7% of the overall production - enough to supply two million homes with natural gas. The Climate and Clean Air Coalition (CCAC) and Clearstone Engineering recently shared results of a project in Colombia which identified profitable opportunities to recover condensable liquids from flared associated gas.

There are already some notable success stories: Nigeria has seen a massive decrease in flaring and is instead selling the gas that would otherwise have been wasted.  But the oil and gas producers have typically not considered this a priority issue, until now. Further, the pipes and the gas they carry usually belong to two different companies, creating a market disconnect. And even if a company would stand to gain from an efficiency upgrade, competition is high for available capital and the returns from other investments are usually higher and faster.

Certain types of equipment such as pneumatic controllers and pumps are even designed to leak gas. Some countries require companies to use newer no-bleed technology for new projects and retrofit existing stock, which should be a no-regrets policy, said Banks. However, many European companies have already taken voluntary steps to reduce emissions, aligned with the Methane Guiding Principles Best Practice Guides and the US Natural Gas STAR Program Recommended Technologies to Reduce Methane Emissions. More than 20 European companies and 14 supporting organisations have signed on to the Methane Guiding Principles, a commitment to manage methane emissions along the gas value chain.

Europe’s methane mission is different to that in heavy gas-producing countries, as it imports most of its gas from countries such as Russia, Qatar and Algeria. The idea of imposing emissions standards on imported gas or a ‘methane supply index’ is being floated, and there is a currently voluntary initiative to cover the proof of origin for all gases in energy supply. Also, the International Standards Organisation will work on a low carbon LNG label to account for emissions throughout the LNG value chain. Another suggestion is to extend the EU emissions trading system to include methane emissions from the natural gas sector and methane from coal seams. But it will be difficult for Europe to push policy on other countries unless it has clean hands itself, Banks says.

One significant gas industry milestone was the preparation of the comprehensive report Potential ways of the gas industry can contribute to the reduction of methane emissions”, requested by the European Commission and presented in June 2019 in the Madrid Forum for Gas coordinated by GIE and Marcogaz with the involvement of around 20 associations representing the entire value chain. The report presents the current status of emissions in Europe, current activities, including ongoing initiatives and commitments, and identifies challenges and opportunities.

GIE and Marcogaz have continued to raise awareness of this topic and identify concrete action points,  create guidelines to help companies set reduction targets, make methane policy recommendations, reconcile top-down and bottom-up best practises for measuring, reporting and verification, and elaborate a reporting template. Francisco de la Flor, Board Member of GIE and Marcogaz says, “a huge amount of work is ongoing and the mid and downstream companies are there, contributing with knowledge and expertise in their own companies and actively participating in the process opened by the authorities”.

The Commission may also collaborate with other initiatives such as the CCAC, the Oil and Gas Methane Partnership and the US Methane Task Force. Companies who introduce methane containment measures now will be in a privileged position compared with those who delay adoption while waiting for data and measurement to improve, said Brendan Devlin, Advisor to the Commission. “If you see a tsunami do you first judge how large it is before you run? There are no benefits to delaying action”.

Caroline Gentry is an energy markets and sustainability journalist with a background in gas, power and emissions markets at Argus Media and other publishing houses both in the UK and the US, as well as working as a renewable energy advocate for a climate NGO in developing countries. For more information: www.cleanenergyinsights.co.uk 

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