Methane Mess Revealed in Climate Index

Methane is responsible for a surprisingly higher proportion of the oil and gas sector's greenhouse gas emissions than previously assumed, according to the updated Oil Climate Index plus Gas (OCI+), a tool for policymakers and investors housed by nonprofit RMI. Compared to the previous update in 2020, "the new thing is how much methane matters," says Deborah Gordon, who has been heading the project since its launch by the Carnegie Endowment for International Peace back in 2015.

"Now we have more sophisticated methane modules and we've added satellite data," Gordon tells Energy Intelligence. Those are "massively important" and allowed OCI+ researchers to find "huge variances" in methane leakages across resources. Many oil and gas assets saw their emissions rates updated from the previous version of OCI+, usually in the upward direction and usually because of methane leaks, says Gordon.

A spectacular example is the US' West Texas Permian Basin. Its total emissions are now estimated at almost 750 kilograms of CO2 equivalent per barrel of oil equivalent, up from 480 kg CO2e/boe in the original database. This is mostly due to the revaluation of upstream emissions — and leaks — at 306 kg CO2e/boe, up from 42 kg CO2e/boe. According to the OCI+, the Permian Basin is among the world's worst performers in terms of Scope 1 and 2 emissions from production, processing and transport, together with Russian gas fields such as Yamburgskoye, Urengoyskoye, Bovanenkovskoye and Zapolyarnoye, where upstream emissions are relatively low but transport leaks huge.

Considering Longevity

Methane accounts for half of the industry's Scope 1 and 2 emissions, the data shows, or almost 20% of its total emissions including Scope 3 emissions from products sold. This is under the assumption that the global warming potential (GWP) of methane is 82.5 times greater than that of CO2, which is its 20-year GWP, instead of 30 times if a 100-year time scale had been used. Both GWPs make sense. The 100-year GWP reflects the long lifetime of CO2, which is the main greenhouse gas and therefore more representative of long-term impacts of climate change. By contrast, 20-year GWPs prioritize gases with shorter lifetimes. They disregard impacts happening more than 20 years after the emissions occur, but focus attention on what can be done most rapidly to address climate change.

With the 100-year GWP, methane would only account for a quarter — instead of half — of the industry's Scope 1 and 2 emissions, and just under 10% — instead of 20% — of its total emissions. Likewise, the Permian Basin would remain among the worst global emitters, but with only 135 kg CO2e/boe in upstream emissions instead of 306 kg CO2e/boe. By comparison, weighted average upstream emissions in the OCI+ database amount to 60 kg CO2e/boe with a 100-year timescale, and 117 kg CO2e/boe with 20 years.

Sorting the Scopes

The OCI+ covers 52% of global oil production and 69% of global gas, up from 5% of just oil production in the original version. The underlying database includes 20,000 assets, but many of them were aggregated and the public version is down to around 600 data points, with a weighted average climate impact of 579 kg CO2e/boe with 20-year GWPs. Oil and gas are almost equally carbon intensive and the data does not show a significant difference between gas and oil Scope 3 emissions, at respectively 364 kg CO2e/boe and 391 kg CO2e/boe.

While Scope 3 emissions account for the majority of the industry's emissions, the OCI+ suggests that, because of methane leaks, the share of Scope 1 and 2 is significantly higher than usually estimated, at 65% or 75% depending on methane GWPs versus the usual 80%-95%. It is even less for some resources, such as Permian oil and Russian gas, which have disproportionately high Scope 1 and 2 emissions during production, processing or transport. Besides methane emissions, steam-based enhanced recovery and heavy oil production and upgrading are highly carbon intensive, and can cause upstream emissions to reach well above 250 kg CO2e/boe. By contrast, light oil grades and properly managed gas production generate only around 60 kg CO2e/boe — or 25 kg CO2e/boe with 100-year GWPs.

Ways to Improve

Besides addressing methane leaks, the oil and gas industry could substantially reduce its Scope 1 and 2 emissions by using electricity and renewable energy instead of its own products, Gordon notes. "It's a very oil and gas-oriented industry, even in its own operations." Instead of running on diesel or natural gas, the sector could "electrify itself" or, as in the United Arab Emirates, use concentrated solar energy to generate steam, she emphasizes. "I think the Global South has a lot of opportunity here because a lot of these countries are new producers, they're not legacy producers and don't have to replace equipment."