Responsible for over a quarter of observed global warming, methane emissions are critical in efforts to achieve the goals laid out in the Paris Agreement. Analysis by the UN estimates that limiting global warming to below 1.5°C will require a 40-45% reduction in methane emissions by 2030. However, misaligned corporate and governmental initiatives are letting methane reductions slip through the cracks. Despite targets and funding directed towards methane mitigation, 2022 saw emissions from the energy sector increase by over 2 million tonnes compared with 2021.
This is largely due to a significant disparity in governmental and corporate approaches. Most oil and gas producing firms have set emission intensity targets rather than absolute reduction targets. These goals can be achieved whilst increasing production, as planned, up until the middle of the decade. The global average methane intensity of oil and gas production has fallen by approximately 5% since 2019, even as continued increases in production have caused overall emissions to rise.
Governments, on the other hand, are striving towards absolute reduction targets, as laid out in commitments such as the Paris Agreement and the Global Methane Pledge. They are, however, unlikely to meet these goals if emissions from the oil and gas industry are allowed to keep growing. To address this, governments could start to force firms to set absolute reduction targets, restrict importation from countries that haven’t committed to reduction targets or are failing to reduce emissions, or introduce fining measures comparable with the new Waste Emissions Charge seen in the US.
With oil and gas production unlikely to be any lower than forecast, as fossil fuel dependence persists and global energy demand increases, significant measures will need to be implemented to address the methane issue. To avoid the financial, legal and reputational ramifications of more rigorous regulation, oil and gas firms must increase their investment in methane mitigation.
