Methane emissions challenge the global oil and gas industry and the role and reputation of natural gas in a decarbonizing world. Credibly demonstrating near zero methane emissions is both an imperative and a competitive differentiator for companies in the early phases of the energy transition.
However, the oil and gas industry has a methane emissions data problem. The majority of emissions data is derived from desktop calculations, not real-world measurements. Around the world, research reveals that methane emission inventories consistently underestimate, and in some cases overestimate, real emissions. This uncertainty can compromise the integrity and credibility of reported information for governments, civil society and investors.
Improving the accuracy of methane emission estimates is necessary to instill confidence that progress is being made. This report outlines an enhanced approach to measuring and reporting methane emissions.
While the journey begins with increased and improved data acquisition, it does not end there. This paper explores three critical actions that executives must champion to improve data accuracy and earn stakeholder confidence that methane commitments are real.
Major oil and gas producers face significant environmental, social and governance risk stemming from a vast portfolio of production assets in which they have stake, but are controlled by other third parties.
These non-operated assets are estimated to comprise on average 40% of supermajor production. Yet despite accelerating industry commitments to reduce greenhouse gas emissions in recent years, these assets remain largely unaccounted for in company ESG disclosures or targets. As customers, regulators and companies embrace a low-carbon economy, this accountability gap in emissions measurement, mitigation and target setting can have material risk-and-return implications for oil and gas investors.
Building on EDF’s 2018 report, the Next Frontier, this paper offers industry analysis and technical guidance for investors to pursue constructive dialogue with oil and gas companies on non-operated assets. Now is the time to call companies to action, encouraging them to establish targets that cover 100% of their production volumes, across all assets.