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International

Freedom Isn’t Free…of Methane

Last week, the US Department of Energy started referring to natural gas as “molecules of freedom” or “freedom gas,” referring to the ability of natural gas from the United States to provide “a diverse and affordable source of clean energy” for the world. It’s true that natural gas is often viewed as being cleaner than coal, and is seen by many as a fossil fuel that can play a critical role as a “bridge” fuel in the global transition to renewable energy. But natural gas has a problem: it leaks methane, a superpotent greenhouse gas (GHG) that has a short-term climate impact over 80 times greater than an equivalent amount of CO2. Even though natural gas emits less CO2 than coal when combusted, its methane emissions put the environmental credentials of natural gas into question. There is reason to believe that, when methane emissions are taken into account, the climate profile of natural gas could be no better than that of coal.

Did You Know…

Methane is very effective at trapping the infrared radiation (heat) reflecting from the Earth’s surface, so much so that its short-term impact on climate is over 80 times greater than an equivalent amount of CO2. Experts estimate that methane emissions will drive one-quarter of the global warming we will experience over the next 20 years, and the oil and gas industry is responsible for 14%–20% of these emissions.
An Immediate Opportunity for Positive Climate Impact

Tackling methane emissions from oil and gas production presents an important opportunity to make an immediate impact on mitigating climate change for two reasons. First, while methane is a superpotent greenhouse gas, it lives in the atmosphere for only about a decade, meaning that reductions now can have a major short-term impact on slowing global warming. Second, the global oil and gas industry is dominated by a few multinational giants, the actions of which can set the tone and practice for the industry as a whole. These players are well aware of how their carbon footprints affect perceptions of their organizations by the public and by potential investors, who are increasingly considering climate risk in their investment decisions. Substantive action by these major players has the potential to serve as a tipping point to change industry practices as a whole. And if this one industry takes action to eliminate its methane emissions, we can buy critical time for the climate, and for further, deeper decarbonization of our economy. (Beyond addressing these methane emissions, eliminating the use of fossil fuels in buildings and reducing demand for natural gas by meeting buildings’ energy needs with clean electricity—the focus of Rocky Mountain Institute’s new Building Electrification Program—is also essential for reducing emissions.)

 

It’s Not Either/Or: Using Economic Incentives to Fix the Methane Problem

The International Energy Agency (IEA) and the America’s Pledge coalition of cities, corporations, and others have identified oil and gas methane emissions as a top target in reducing global greenhouse gas emissions. Numerous efforts are underway to increase transparency and directly measure methane emissions from oil and gas operations, including extensive research efforts led by the Environmental Defense Fund. In addition, a growing number of states—including Colorado, Ohio, Pennsylvania, California, Utah, and New Mexico—are putting regulatory frameworks in place to limit emissions from oil and gas operations. US federal regulations on methane are also likely to arrive within the next decade.

While efforts like these are essential to tackling the methane problem, we have an additional tool at our disposal to help drive near-term emission reductions at the scale the climate needs: economic incentives. Such incentives can support a sustainable new structure for an oil and gas industry focused on addressing its methane emissions. Bringing key industry players to the table—both the large oil and gas producers, and the large oil and gas consumers—is critical to catalyzing change.

Shifting the Market: Stimulating Supply and Demand for Low-Emission Gas

Rocky Mountain Institute (RMI) is engaging directly with major oil and gas companies to identify, adopt, and scale best practices that eliminate methane emissions from the oil and gas value chain. Specifically, we’re focused on driving change by:

  • Providing actionable, data-driven insights and tools to raise awareness and spur action;
  • Deploying technical solutions that enable methane mapping, monitoring, and mitigation; and
  • Establishing a market for certified low-emission gas.

To help establish a market for climate-responsible gas, we’re bringing together large thermal-energy purchasers, including utilities and industrial buyers, that are looking for lower carbon inputs to energy generation and manufacturing. We will partner with sellers and with these buyers, as well as with methane emission data providers and certification bodies. By this means, we will develop and deploy a market for certified low-emission natural gas that provides an economic incentive to reduce methane emissions from the oil and gas value chain.

Currently, our work is centered on the Permian Basin, the world’s second-most productive oil field, which is located in the United States and largely in Texas. Leveraging Texas’s position as a global leader in the oil and gas industry, we are working to catalyze a new future that captures the positive climate impact of significantly reducing methane emissions while moving solutions into a viable market opportunity.

A Foundation to Grow On

For more than three decades, RMI has worked as an independent, apolitical, nonprofit think-and-do tank to transform global energy use to create a clean, prosperous, and secure low-carbon future. To build on that foundation and help us advance this important and impactful work, two methane experts have recently joined our team.

Cate Hight, a principal, joins RMI after spending 10 years at the US Environmental Protection Agency, where she managed the oil and gas program of the Global Methane Initiative, a public–private partnership of 45 countries and private-sector actors dedicated to methane abatement, recovery, and use. Cate also played lead roles in the development of important greenhouse gas regulations, including the Clean Power Plan, the Clean Energy Incentive Program, and the GHG Reporting Program. She coauthored the annual Inventory of US Greenhouse Gas (GHG) Emissions and Sinks, and led the agency’s work on carbon market development, including the market-based mechanisms in Article 6 of the Paris Agreement.

Taku Ide, a principal, founded Koveva in 2011 and worked closely with leading companies in both the oil and gas and coal sectors to minimize methane emissions from their operations. Koveva developed a standardized protocol to map, monitor, and mitigate methane emissions, drawing heavily on his team’s experience in reducing methane emissions–related risks from operations in the San Juan Basin, Colorado. Prior to launching Koveva, Taku earned both his M.S. and Ph.D. in petroleum engineering from Stanford University, where he focused on GHG emissions reduction, modeling subsurface methane flow in underground coal seam reservoirs, and quantification of methane and CO2 emissions from the San Juan Basin. His research appears in a number of peer-reviewed journals, and he is the lead author of a US patent that disrupts the flow of fugitive methane emissions toward underground coal fires.

Methane Emissions Matter

Reducing methane emissions from oil and gas operations is among the most impactful actions we can take in the near term to help avert catastrophic climate change and improve the environmental performance of a fuel source that is key in the global transition to renewable energy. This is not an opportunity that we can afford to miss.

Learn more about RMI’s efforts to reduce methane emissions from the oil and gas industry here.