New Metrics Released by IEA, UNEP, and EDF to Monitor Oil and Gas Companies’ Progress on Methane Commitments

The OGDC is a flagship program launched at last year’s UN climate talks (COP28) in the United Arab Emirates. With 54 companies now signed on, the OGDC is well-positioned to help the industry as a whole accelerate its efforts to tackle climate change. The independent methane accountability initiative was created by the IEA, IMEO and EDF to provide oversight of efforts being made by the whole industry, track progress and help ensure companies deliver on their promises.

“To achieve steep cuts in methane pollution, producers must make changes now. These investments take years to implement,” said Fred Krupp, President of Environmental Defense Fund. “This accountability framework will help assure that oil and gas companies deliver the necessary reductions in time. No one can wait until 2030 and wave a magic wand. We need to see progress every year, with companies showing their work along the way.”

Methane is a powerful driver of climate change. Emissions from fossil fuel operations and other sources are responsible for at least 30% of today’s unprecedented global warming. If achieved in full and on time, the OGDC commitments would cut upstream methane emissions around 15% by 2030. If all of the top 100 producing companies including the OGDC signatories were to do the same, upstream oil and gas methane emissions would be cut globally in half by 2030.

“Recent commitments, such as the OGDC, represent a tangible step forward for oil and gas companies looking to align their operations with the Paris Agreement. Now, companies must quickly transform their promises into action,” said IEA Executive Director Fatih Birol. “Methane emissions from fossil fuel operations are a major contributor to global warming, and tackling them is one of the fastest and lowest-cost ways to keep climate change in check. This new initiative will ensure accountability and transparency across the entire oil and gas industry and help deliver meaningful progress soon.”

The IEA estimates that oil and gas operations resulted in close to 80 million t of methane emissions in 2023 (equivalent to around 120 billion m3 of natural gas). Methane emissions have remained near these levels for over a decade. In addition, nearly 150 billion m3 of natural gas was flared worldwide in 2023.

Reducing methane emissions and flaring is a critical test of the oil and gas industry’s commitment to climate action because mitigation opportunities are large, fixes are cost-effective and controlling leaks improves operational efficiency. This makes it even more important for the OGDC to fulfil its potential to accelerate efforts from the whole oil and gas industry to help tackle climate change.

“The warming climate is harming human health, food systems and natural habitats, bringing enormous cost to societies. Cutting methane emissions is a crucial way to reduce these impacts as the clean energy transition continues,” said Inger Andersen, Under-Secretary-General of the United Nations and Executive Director of UNEP. “Progress on these commitments in this decade must be a top priority.”

The new framework looks at the detailed plans of oil and gas companies. This includes an emphasis on year-over-year improvement in planning and execution, providing much-needed transparency for financial institutions, government ministries, commercial gas buyers, NGOs, and the public. It says company reporting should follow protocols in the Oil & Gas Methane Partnership. Created by UNEP in 2014 and enhanced in 2020, OGMP 2.0 is the only comprehensive measurement-based international reporting framework for the sector.

Together, the IEA, IMEO and EDF will publish an independent assessment annually covering OGDC signatories and other producers around the world, tracking progress against the new metrics. The first of these scorecards is planned for next year and it will assess whether companies have the necessary targets, plans and reporting processes in place.

Subsequent scorecards will quantitively assess the levels of each criterion, whether specific targets are in line with the OGDC and the need to limit warming to 1.5°C, and track progress towards established goals.

Transparency on the emissions levels and actions being taken to address them will be crucial for the industry to assure stakeholders of the progress being made. This includes reporting empirical methane emissions data using robust measurement standards and protocols, such as those established by the OGMP 2.0. These data, combined with the increasing capacity of monitoring emissions through new remote sensing instruments, such as EDF’s MethaneSAT and Carbon Mapper’s Tanager Satellite, will help ensure the accountability of commitments.

A total of 25 metrics will provide a comprehensive and transparent snapshot of the oil and gas sector’s progress in meeting its commitments. They cover emissions reductions and investments in clean energy, methods for achieving these targets, and the evaluation of how companies publicly disclose and report information relevant to achieving their OGDC commitments.

The new framework is the first product of an independent methane accountability initiative launched last year at COP28. By combining transparency and accountability with cutting-edge data, it aims to make methane emissions from the oil and gas sector visible and quantifiable, engage emerging and developing economies to address methane leakage in domestic oil and gas production, and push for stronger government policies and regulations on methane purchase and trade policies worldwide.

Read the article online at: https://www.oilfieldtechnology.com/special-reports/23092024/iea-unep-and-edf-announce-comprehensive-metrics-to-report-action-and-measure-progress-by-oil-and-gas-companies-on-methane-commitments/