Dr. Roland Kupers is an advisor to the United Nations Environment Program on methane. He made for 2Celsius two short presentations. One to introduce the International Methane Emissions Observatory (IMEO) and one specific program that we have set up, an oil and gas called the Oil and Gas Methane Partnership (OGMP). Here below are the main points of his presentations (Video at the bottom of the page).
The first thing to point out is that methane really matters. The emissions of methane and curbing them is absolutely critical to limiting climate change. As you may remember, one of the the main events at the last Cop 26 was the Global Methane Pledge, which was led by the European Union and the US and signed by 110 countries committing to a 30% methane reduction target by 2031.
Of the notable things, as you probably know, at least at the time, is that Romania was not amongst 110 signatory countries. I’m not sure whether that’s changed or not, but that was notable at the time, particularly because Romania is one of the main oil and gas producing countries in the EU.
But this was a typical pledge, as one does at these events.
And what really matters is how these things get implemented and how they make a difference on the ground. Making a pledge and signing a piece of paper, in a sense, is the easy part.
And IMEO, which had been announced just before at the G20 meeting in October, is the implementation vehicle.
So, methane really matters because we essentially cannot reach one and a half degrees warming or even two degrees warming without aggressive curbing of methane emissions. And methane lives much more shortly in the atmosphere than CO2.
But one easy way to think about it is that methane determines the speed at which global warming occurs and the CO2 determines the absolute level we get to.
Since we started very late on climate policy, we absolutely need to slow down the warming. And methane is absolutely critical to slowing it down.
Also, there’s a particular role for the oil and gas industry because only with decarbonisation, we can only get to a particular climate mitigation, and methane mitigation is absolutely critical to reaching the target.
One of the things you may have seen in the preparation work is I worked for Shell for twelve years, and I was the head of Shell’s LNG business. So, I understand the industry relatively well is that you can actually reduce methane emissions from the fossil fuel sector by something like 70%.
About half of the reductions pay for themselves because the gas is recovered and can be sold. So it’s actually, in a sense, a very good news item.
So why fossil methane? Sometimes people say, why don’t you focus on cows and rice fields and waste? Quite simply, it’s because oil and gas, the fossil sector is about a third of the man made emissions, but the abatement potential is by far the biggest.
In oil and gas and coal, you can reduce something like 60% to 70% quite easily. And in waste and agriculture, it’s just harder. The best way to think about it is that fossil fuel companies are relatively well organized and well capitalized and well managed.
It’s a lot easier to talk to such a sector and take action in such a sector than convincing millions of farmers to change their practice. So we know the solutions, but it’s easier and there’s a path to implementation for the fossil sector.
One of the great challenges is that we have, frankly, lousy data on this sector, and we need to get much better. And this is one of the things that the Observatory is focusing on. And basically we need more empirical data. We haven’t measured enough. Most of the data we have is based on emission factors.
And there’s a very large study that has been undertaken by IMEO and a number of partners to actually measure emissions levels in Romania.
And what that looks like is what we’re trying to define is what’s the gold standard of these measurement campaigns, and that’s looking top down by satellites and airplanes and doing measurements on the ground, and then making sure that we understand how the two relate.
They’re never the same, but you can understand how they relate and they reinforce your confidence that the data is accurate. So that’s one of the things that IMEO is focusing on.
The other thing is there are so many diverse sources of data. You get these press releases from a satellite company that says that they see some emissions somewhere and then some airplane monitoring company puts out a Press release. But the actual value is from integrating all of these different data sets into a single image that also characterizes its uncertainty. And that is what IMEO is going to concentrate on.
So what is the International Methane Emissions Observatory?
It’s an Institute that was set up only in the last couple of years under UNEP, with funding from the European Commission and the United States government. And we’re discussing actively with other governments to enter. We have a budget of about €100 million over five years, and it really is intended to be the hub of the methane ecosystem.
Most of the money is not for the Observatory itself. It’s to fund activities in other institutions, academic studies, engagement, etc. What we want to move from is a situation today where there’s limited empirical data that’s not very comparable, that, frankly, there isn’t a lot of awareness at a corporate level.
When I was in Shell, and one of the jobs I had in Shell is I was the head of sustainability and said I did the corporate transparency for the Shell group about 20 years ago, and we reported on methane. But there wasn’t this awareness that, first of all, the data was of poor quality and that it really mattered to the climate. That awareness is now growing rapidly. And so there are only a limited amount of societal actors also engaged in methane advocacy. A lot of the NGOs are not that engaged so far.
We want to get where IMEO is the trusted source of integrated methane emissions data. And we hope that the UN identity will help with that and that we engage others at the asset level.
Where do methane emissions get reduced?
Is it by somebody in a plant doing something different on the Monday morning, organizing valves to be updated, changed, tank leakages to be mitigated? This isn’t a corporate or a government activity. It’s actual engineers fixing something. So we’re very focused on getting to the people who need to get the tools and the motivation in their hands to do the actual fixing. And the great thing about engineers is that they like fixing things. So if you can motivate them, that’s actually quite doable.
We want to create a broader partnership of societal actors who drive this advocacy for methane reduction.
But what is the inside of this Institute look like?
The Observatory has three main work streams. One is focused on transparency, and that’s holding companies accountable for their methane emissions. And the main instrument for that is the oil and gas methane partnership, which I’ll discuss further.
We’re also currently negotiating a metallurgical coal methane partnership. So we’re doing the same thing for the metallurgical coal, and that’s the coal that’s going into steel production, thermal coal that goes into electricity, has an easy replacement.
We should just stop using it.
But metallurgical coal for steel production is very difficult to replace and will be with us for decades. And there’s quite a lot of methane emissions associated with it.
So that needs to be curbed as well. The second big work, as I mentioned briefly before, is to close the knowledge gap. We know more than enough to act. It’s not that we have to study some more before we do something, but in parallel with starting to take action, we need to close the knowledge gap, get better data, and help companies focus on the areas where you can make the biggest difference.
The point is going after the large leaks first and the smaller ones afterwards. And the third activity is a set of programs to help with implementation. We’re working with governments, ministries, and also national oil companies around the world to help create this awareness on methane emissions so that’s as far as it concerns us.
The Observatory houses the Oil and Gas Methane Partnership.
Oil and Gas Methane Partnership and it’s the Oil and Gas Methane Partnership 2.0, because there was obviously a first version that was launched in 2014 and that was the precursor to this one that we have today.
The second incarnation of this program, based on the learnings from the first one, is a comprehensive measurement based on the reporting framework. So companies report, but they do it based on actual measurements at the asset level. And the asset is so important because that’s where the change happens.
As I mentioned before, it’s totally global in terms of coverage and scope and includes 80 companies today. And that’s just a year after the launch. Those companies represent over 50% of the global oil and gas production in over 60 countries. So we’re hoping to grow rapidly and get other companies on board. The reason so many companies have joined is because it is advantageous for these companies to do so.
The program was designed together with the industry so that it makes sense, so that it works in the reality of the operations of companies. In addition to the production, we cover over 20% of the transmission and 10% of storage and over 15% of LNG terminals.
So what is OGMP?
It aims to be the gold standard of methane reporting. There are lots of reports. I reported on Shell’s methane emissions 20 years ago, and that was a number that was published in a report, but it didn’t help anybody understand how it was derived and how good it was.
Thus we’ve created OGMP to be a comprehensive measurement based transparency framework for the oil and gas industry. And it is the only one that does that, and it does so in the following way. Member companies report on all material sources of methane emissions. And we have a materiality definition because the point is not going after the tiniest emissions, but it’s going after the material emissions because that’s cost effective.
Companies report both on the operated and non operated assets. And this is absolutely critical because a lot
of gas assets are in nonoperated joint ventures around the world along the entire value chain. So it’s upstream, midstream and downstream. OGMP provides the assurance and verification that the member companies are managing emissions responsibly. And this is a great advantage for companies because in this day and age, self reported numbers are met with wide skepticism.
So what we provide is the credibility that these numbers are actually solid. The EU strategy in particular has mentioned in 2020 OGMP as the best existing vehicle for improving measurement, reporting and verification capability in the energy sector. And indeed, it functions as the foundation of the methodology and also the reporting of the European Commission’s methane regulation that was announced in 2021.
How does it work?
Essentially, we’ve defined five levels of reporting that go from level one, which is just a number. Company says: I’m not telling you where it comes from, but these are my methane emissions. And that, frankly, is where most of emissions around company reports are today.
Now, inside the company, there may well be more detail, because obviously, companies don’t just invent these
numbers, but many of them are based, which is level three, on fairly generic emission factors that sometimes were derived 20 or 30 years ago based on quite iffy science.
Therefore, what we want companies is to move to level four, which is specific, measured emission factors so that you’ve actually gone and measured sufficient assets using instruments that there’s a good conviction that that is the actual level of emissions and then to level five, where you’ve also taken site level.
So either satellite or airplane measurements and did the reconciliation of the site and source level. And that’s level five; it is what we define as gold standard measurement. Now, it takes time to do these things right. Realize that companies have many assets, and you need to start with one first and then roll it out a couple more and then to the entire base.
And so we have this five year schedule, which we’ve established together with companies, is that companies have three years to reach gold standard for operated assets and five years for non operated assets. That’s generally the consensus of the time it would take to work through the entire asset base.
The good thing is that as long as you’re on that timeline, you are gold standard. So gold standard is not just the destination, but is also the credible path there? Because we recognize it’s in large oil and gas companies. It takes time to do things. You can’t do them instantaneously and doing the best you can.
The very best that’s possible is gold standard.
What are the OGMP requirements?
If you join OGMP you have to define and disclose a target. So it’s not only reporting because transparency is useless. If you also aren’t trying to reduce, the companies have to disclose a 2025 target and another optional target. They have to submit an implementation plan on their pathway to gold standard, but you can’t simply say magically, in year three, I will be at level five with everything. There has to be a pretty obvious pathway to get from one or the other.
And you report to UNEP annually on the methane emissions for both operated and non operated assets. So what’s reported publicly is the reduction targets of the companies, but only the aggregated emissions, both by core sources and for the company entirely, and progress toward targets.
UNEP does not disclose. It retains confidential the reports on an asset level basis. It’s a real partnership. So if we find anything strange or whatever report is shared with the companies before it’s published, this isn’t a good partnership. The idea is really that we do something constructive and the confidential asset level data or country level emissions will not be publicly disclosed.
Company performance targets are really important. They need to be reported on and ratcheted with time.They can be either intensity targets or percentage of total gas volume or an absolute target, but they have to be consistent with the overall industry target, where we need to get to for one and a half percent reduction, and that’s 45% by 2025 and about three quarters of reduction by 2030.
And that’s roughly consistent with the Global Methane Pledge as well.
Get Romania into OGMP!
One of the things I will completely admit is that we sincerely hope that the Romanian companies and those who operate in Romania will consider joining our OGMP.
It’s two things. It’s credibility and transparency. It really is the way to demonstrate that on this particular issue, you are doing what is needed as a company.
It’s very clear that fossil companies deliver fuels that emit CO2, and that’s a fact of life. But losing a lot of the methane along the way is really embarrassing, and that’s a problem we should and can tackle.
But if companies do that, they also need a way to get credit for that and to distinguish the good from the bad operators. And so, OGMP delivers that.
And again, it’s a partnership. And so there’s a lot of knowledge and experience sharing. What we already see is that there are all sorts of side conversations between companies in the context of OGMP here, like, “oh, what are you doing in Thailand or in the US somewhere? And can we learn from that? Do you have experience with this plane operator, this satellite data? How does it work?”
So there’s a lot of sharing, and we organize workshops where companies can talk to each other and really turn together. And we’re also developing tackling complicated subjects together.
Ukraine and uncertainty
There are two aspects to the Ukraine crisis for the narrow issue of gas. There’s a million things to be said on others. So essentially what the EU is trying to do is two things: replace Russian imports with other LNG imports and an acceleration of the renewables program.
UNEP’s position is that we should replace as quickly as possible.
So the opportunity is a very rapid acceleration of renewables.
But still, there’s going to have to be a certain amount of LNG imports. And frankly, the sources are quite easy to identify. It’s Qatar and the United States that have very large volumes that could be supplied to Europe. Those are the two main sources. The others are fairly marginal.
Qatar is a member of OGMP, and all of its assets are covered. So we well understand the methane footprint.
The US is more complicated. It’s much more spotty. About 15% of US gas assets are covered in OGMP. And that’s also the subject of discussions between the US and the European Commission that gas imports into Europe will also need to meet proper environmental footprint. But there is the option of Qatari volumes which are covered under OGMP and some US volumes as well.
So I don’t think the Ukraine crisis changed this enormously.
And one of the great mistakes we should avoid is to think that all of a sudden environmental issues don’t matter anymore because there will be conflicts and disasters along the way. As dramatic as all these things are, we also need to deal with climate change because that doesn’t go away and doesn’t get delayed.
And we can actually do both. There’s absolutely no reason not to mitigate methane emissions in the oil and gas industry.
A Russian story
We have very little data on Russian emissions and every time we’ve engaged with Gazprom (and we have a lot both in Russia and with their representatives externally) they say, oh, no, we’re completely transparent. We’d love to do joint science studies and every time we approach them with a particular science study program they refuse.
So basically Gazprom data is what an OGMP we would call level one data. In other words, it’s just a number and we have no idea as to its accuracy.
That being said, if you’re comparing it to Shell, there are also level one data that are currently reported. So in a sense, we’re looking at vague versus vague reporting numbers. The difference is that Shell is a member of OGMP and a very active one and we see in the reports that they’re very rapidly progressing and doing measurements all around the world and doing top down, bottom up reconciliation both for their operated and their nonoperated joint ventures. Some of them which are with Gazprom, by the way, although they’re now divesting of them.
So the difference is that with Shell in very few years we’ll have excellent data and for Gasprom we’ll just have whatever numbers they give us until Gazprom joins OGMP.
So the countries have signed up to the pledge, and they need to encourage their companies to do better. But the best way to do that is for those companies to sign up to OGMP. The second best way, and that’s also happening certainly in the EU, but is to introduce regulation. The problem is that regulation takes a long time and will be implemented in Europe, perhaps will be implemented in the US, but will not be credibly implemented within the required time frame in Russia and Iraq, in Iran, in Nigeria, in Mozambique, in Kazakhstan and all the places where the emissions are, so that they go together.
The development of regulation is important, but is likely to be too slow. But companies join OGMP, and that is encouraged by their governments. And we’re seeing that. IMEO is one of the critical implementation vehicles for the global meeting pledge. It’s really seen as the instrument, one of the instruments for getting the global methane pledge executed.
But leadership in society doesn’t just reside with governments.
We all have to do something. And this is such an obvious problem to tackle. And this is what we’re seeing, is that rapidly, company after company realizes that in our industry, this is the thing we need to contribute. And it’s not a very big deal. It’s a little bit like the implementation of safety as a leading principle several decades ago. And all oil and gas companies need to mitigate their methane emissions.
It’s just part of the way you do business and you operate an oil and gas company. We work together with the entire methane ecosystem. And so the Global Flaring Initiative is one of the elements, and it’s been around for a long time, and it is important to eliminate flares, and they’re working on that.
What we are working on, which is complementary to that, is increasing the efficiency of flaring.
Companies don’t flare for fun. They flare because they can’t get rid of the gas. The main sources of flaring are in places like Southern Iraq and in North Dakota and in the Niger Delta, all sorts of places where the gas, frankly, is stranded. It takes billions and billions to be able to evacuate it and bring it to market and build power plants. So that’s not going to happen anytime soon.
But what you also see and this is a critical improvement is that the quality of flaring is often terrible. The best flares burn 99.9% of the gas that goes into them. Some flares only burn half of the gas, and the other half is just vented essentially. And so it’s all over the place between 50 and 99.9%.
So our ambition is to help companies get all of their flares above 99% emissions, and many of them are not. And in addition, if the Global Flare Initiative of the World Bank can help them eliminate the flares, great, but let’s not wait for that. In order to flare properly, it costs only thousands or hundreds of thousands of dollars to flare efficiently. It costs typically billions to eliminate flares.
And so we shouldn’t let the better get in the way of the good. So both are important, but we think that there’s unsufficient attention to flaring well and flaring efficiently. And that’s what we intend to help companies measure and realize and make the relatively easy improvements to do that.
Costs are complicated and they vary all over the place. But it’s also important that we don’t do safety measures only if we make money on them. We do them to save lives. And we should also reduce methane emissions because it’s the right thing to do in that industry for the climate. It’s, in a sense, the least you can do. So much of it is economical, but that shouldn’t be.