Methane Emissions: Corporate Reduction Targets and Management Strategies

At our upcoming North American Gas Forum, energy leaders will be discussing advances in energy and innovation for a safer climate and healthier environment. One topic central to this conversation is methane emissions, and recent corporate commitments to reduction targets, with companies like Eni set to achieve 80 percent reduction of their fugitive emissions by 2025. For an insider perspective about methane management, we called upon Ben Ratner, leader of the Energy & Innovation team at EDF+Business. Over the past several years, Ben and his department have been vocal advocates of establishing and implementing quantitative methane goals for the oil and gas industry.

During our conversation, Ben shared his perspective on recent methane emissions target announcements, and how high-level corporate commitment to methane reduction is setting a precedent for the industry.

ED: You’ve mentioned before that 2018 is an important year for multinational corporations to make methane management a key part of their global agenda. Why is this year so critical?

BR: For one thing, a group of large oil and gas companies signed on to five principles to reduce methane emissions across the world, and across the value chain. They did this in November 2017 with a list including ExxonMobil, BP, Shell, Equinor (formerly Statoil) and others. In fact, since that time, companies like Chevron, Qatar Petroleum and others have signed on. Those principles were a good first step. But 2018 is a critical year to operationalize them, with concrete action needed to reduce emissions, propel technology forward, and improve transparency. And now that OGCI has committed to release a target in 2018, this is really an important year for follow through.

As you may know, we released a white paper earlier this spring, of which I was lead author. It is called “Taking Aim: Hitting the mark on oil and gas methane targets,” which is all about the importance of setting quantitative targets on methane emissions. With input from leading institutional investors and other experts, we outline the five keys to a strong methane target. EDF and others will be looking hard to see that the target OGCI releases is ambitious, comes with transparent data including emission measurement, and has the appropriate scope. So 2018 could be a defining year on moving from words to actions.

ED: The Environmental Defense Fund has been calling on companies to set clear agendas and commit to absolute targets, including a 75 percent reduction by 2025 as a proposed mandate. Do you feel that this is attainable?

I think for companies to achieve a 75 percent reduction in methane emissions by 2025 is absolutely attainable and feasible. Last year, the International Energy Agency conducted an economic analysis of methane reduction opportunities globally. IEA concluded that around 75 percent can be captured cost effectively. And by the way, that’s just with today’s technology and practices. This is a dynamic space. New technology – whether it’s for monitoring, or machine learning and predictive analytics for prevention of emissions – is coming to the market every month. With that, companies can meet or beat a 75 percent emission reduction by 2025, on the path to virtually eliminating this needless waste of natural gas.

ED: Which companies seem to be leaning in the most?

BR: Equinor is well-established as a leader of technology and sustainability, and they have shown a very active interest in the methane space. Equinor has a broader commitment in its platform around digitization of the oil fields, and bringing advances in technology to bear for cleaner, more efficient production activities that have an environmental benefit while delivering operational and safety benefits as well. Equinor is an example of a cutting-edge company moving to continuous methane monitoring sending a signal that others should catch on and pay attention to what they could do differently.

ExxonMobil has made strides in the States and globally as well. Last year, XTO Energy president, Sara Ortwein, committed XTO Energy to continuously reduce its methane emissions. They are investing in training for staff and contractors and using technology to find and fix leaks both in new and existing infrastructure. And its parent company, ExxonMobil, is one of the signers to the global methane principles I mentioned, and recently announced targets to cut methane emissions and flaring by 2020. While ExxonMobil must increase the stringency of its targets for the longer term, its initial steps are positive. ExxonMobil is also a constructive advisor to EDF and Stanford on advancing mobile monitoring such as drone mounted sensors; so that’s another company that we have seen stepping forward.

And lastly, I would highlight BP. BP recently became the first top ten global energy producer with a quantitative methane target. BP set a target to achieve 0.20 percent leakage rate of the natural gas that they produce, operate, and market around the world. That’s a stringent and immediate target. They need to expand it in future years to include methane emissions from oil production – a well-known major source, as indicated by a recent IEA analysis. But the BP target does set a benchmark. And so what I expect now is that other companies will find themselves under increasing pressure from investors and others to set a methane target of their own. Proactive companies won’t wait any longer.

ED: Does a vocal and public commitment to a defined methane reduction target renew investor confidence?

BR: Yes. Investors’ attention on the methane issues is as high as I’ve ever seen it. You will see investors becoming more confident in companies that have a good story to tell about the methane management system they have, including targets and results. So setting a strong target and performing against it with credible, rigorous, and transparent data is a way to inspire investor confidence. But not enough has been done. And methane emissions from oil and gas remain frankly a stain on the reputation and future of natural gas. It remains a persistent concern for institutional investors who refuse to choose between earnings and responsibility.

The future of gas is one of the reasons that securing and defending regulations in places like North America is so important. Even if a few companies do the right thing and set targets and use technologies and do trainings, there is a massive industry out there of hundreds if not thousands of actors. Without rules to level the playing field, investors can’t have confidence in the sector-level response to this issue. With the Trump administration attempting to suspend or weaken methane rules, it’s incumbent on operators to make their voice heard for sensible tweaks, not destructive swipes. The scalpel, not the axe for regulatory reform.

ED: What are some of the ways that you see technology moving forward to decrease emissions, and what are some of the things that need to happen within the technology space?

BR: One great example is that Equinor is taking early leadership to pioneer continuous methane monitoring. Shell is seriously helping on that initiative as well. Continuous monitoring has high potential. It’s good for the environment because it provides 24/7/365 protection and notification of the leaks. And it’s good for the industry because it is automated. Continuous monitoring can provide a rapid alert through the cloud if there’s a problem at a site. Isn’t that something that you would want to know about as a company, so you can deploy your people in the field to the right site at the right time? You can prevent a problem from persisting, and maybe even snowballing into something worse. That’s a promising innovation – methane monitoring in the age of oilfield digitization. We are really looking to companies like Shell and Equinor – and groups like the Oil and Gas Climate Initiative – to help continuous monitoring reach a larger, more operational scale in the industry.

Another example is that there is innovation in mobile monitoring. I just came back from Colorado, where I visited with Stanford and a number of talented entrepreneurs and industry collaborators on the Stanford/EDF Mobile Monitoring Challenge. This is a great project that my colleague, Isabel Mogstad, leads for us. And in that project, we’re identifying even better, faster, cheaper technologies for monitoring, whether drone, light aircraft, or truck-based. So those innovations are emerging, and what we need from companies is investment for validation and scale. Not just with their capital, but with their collaboration.

ED: How do you see majors approaching methane management strategy in regard to governmental policy?

BR: It’s been cautious, and there’s a need for more leadership by the majors and other companies on policy. For example, ExxonMobil came out with a blog on methane regulations several months ago by XTO Energy President Sara Ortwein. It’s called, “Methane Regulation: Stay Pragmatic and Seek The Possible.” The promise of that blog was ExxonMobil recognizing the value of government regulation to bring all of the industry along in methane emission reductions. But the power of it remains to be seen – will companies like theirs intervene constructively when the rubber meets the road in the regulatory arena? The real test is whether “forward thinkers” become forward actors, bringing their lobbying activities in line with their rhetoric. Until that happens, many in our community will maintain a cynical view of good-sounding statements. After all, how many energy producers support a carbon tax in theory without rolling up their sleeves in practice to make it a political reality?

Discuss Corporate Monitoring Strategies at the North American Gas Forum
October 14 – 16, 2018
The ongoing dialogue around methane emissions and corporate reduction targets will no doubt continue throughout the year, and Global energy leaders will be discussing this topic live at our North American Gas Forum in October. The North American Gas Forum is a key event to bring together industry, regulators, policy makers and government, with 45+ speakers in attendance and an impressive line-up of industry decision makers from across the natural gas value chain.
To learn more, and to reserve your spot, please visit

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