Methane reductions are largely from divestments, says new study

Methane emission reductions in the oil and gas sector are largely from divestments, according to a new report published by GlobalData. 

While some of the largest oil and gas producers have lowered their emissions in line with sustainability goals, GlobalData notes that a large portion of those reductions come from divestments.

Miles Weinstein, Energy Transition Analyst at GlobalData, said: ‘When emissions are reduced by divestment, those emissions have not disappeared but simply moved around. Emission intensity has been reduced in many cases, but, in the face of increasing production, more efforts will be necessary to meet national and international climate targets. After all, the oil & gas industry is responsible for around a quarter of methane emissions globally.’

According to their latest report, global fossil fuel production will increase by 8% by 2026, and therefore more needs to be done to ensure methane emissions do not rise with it.

The report reveals that Hilcorp Energy has been the largest methane emitter among upstream operators for the third year in a row, with reported methane emissions at 3.4 Mt-CO2 in 2020.

Meanwhile, Energy Transfer, a midstream company, is the largest emitter overall with 6.1 Mt-CO2e.

Weinstein continues: ‘Hilcorp’s emission intensity tripled in 2017, the same year a large number of wells were acquired from ConocoPhillips. Meanwhile, ConocoPhillips’ emission intensity decreased 50% that year. Other companies have shared similar strategies that rapidly reduce their own emissions without greatly affecting the net total. However, many of the same companies do have plans in place to make real emissions reductions using technological improvements.’

The US is the second-largest methane emitter from oil & gas operations, at 12.3 Mt, under Russia, at 12.9 Mt.

Studies have suggested that the scope of the methane problem is larger than government reports have led people to believe due to the limitations of current measurement techniques.

Weinstein continues: ‘While the US has below-average emission intensity, there is a lot of room for improvement. The good news is that solutions to drastically reduce emissions are available today – in some cases at zero net cost or even net profit.’