Energy industry fails to tackle methane emissions despite soaring profits, IEA says

Global fossil fuel industry emissions of methane increased to a near record in 2022, prompting a call from the International Energy Agency for oil and gas companies to use “windfall” profits to clean up leaks of the potent global warming gas.

The latest report from the IEA estimated the industry was responsible for 135mn tonnes of methane released into the atmosphere last year, only slightly below the record high in 2019.

Methane is the main component of gas and accounts for about 30 per cent of the global temperature rise since the industrial revolution, with the energy industry making up about a third of human-induced methane, second only to agriculture.

Cutting methane emissions is regarded by climate change experts as among the cheapest and quickest opportunities for tackling global warming, as it is more potent than carbon dioxide but shorter lived.

Fatih Birol, IEA executive director, urged policymakers to double down the energy industry pressure to clean up its methane pollution, mainly from leakage and distribution.

“From our point of view, there is no excuse for oil and gas industry not to move quickly. And no excuse for the governments not to step in and make this happen,” he said.

Oil and gas companies reported a bumper year in 2022, after Russia’s war on Ukraine created an energy crisis that forced Europe to turn to fossil fuels.

Birol said the oil and gas industry’s income jumped to about $4tn last year, compared to about $1.4-$1.5tn in previous years. “I make the IEA point very clearly: we would like to see a significant chunk of this $4tn go into investments into clean energy transitions, including tackling methane emissions.”

By investing 3 per cent of oil and gas companies’ 2022 “windfall income” in existing technologies, such as leak detection and repair, methane emissions from the sector could be reduced by 75 per cent, he said.

“Tackling methane is one of the most important, if not the most important things, that can be done in tackling near-term global warming.”

The report calculated that, based on average gas prices from 2017-21, about 40 per cent of methane leakage could be stopped at zero net cost, because the price of preventing emissions was below the market value of the captured gas.

The IEA said about 75 per cent of the methane wasted each year from oil and gas operations could be “retained and brought to market using tried and tested policies and technologies” — a volume greater than EU natural gas imports from Russia before the war on Ukraine.

More than 150 countries have endorsed a pledge to cut methane emissions by 30 per cent by 2030, including the US and the United Arab Emirates. However, China and Russia, among the biggest emitters, are not signatories to the agreement struck at the UN COP26 climate summit.

Each day oil and gas operations around the world released the same amount of methane as last September’s Nord Stream explosion, referring to the damaged pipeline taking gas from Russia to Europe, the IEA said.

Despite the advent of satellite monitoring of methane flares, the report also found that emissions from very large leaks detected by satellite fell by almost 10 per cent in 2022 compared with 2021.