Ambitious Methane Reduction Target Announced by OGCI

| USA: Tulsa OK | Source: Total

The Oklahoma-headquartered, international Oil and Gas Climate Initiative (OGCI), now made up of 13 major oil and gas companies, has declared its intention to collectively reduce the average methane intensity of its aggregated upstream gas and oil operations by one fifth to below 0.25% by 2025, and if possible will push to 0.20%, corresponding to a reduction by one third. The natural gas for transportation industry welcomes this initiative to further reduce emissions from the gas value chain.

The methane intensity refers to the methane that gets lost in the atmosphere when producing oil and gas, as a percentage of the gas sold. This effort represents a significant milestone in tackling a key issue in the fight against climate change and underlines OGCI’s stance in working together to support the goals of the Paris Agreement.

Achieving the agreed intensity target of 0.25% by the end of 2025 would reduce collective emissions by 350,000 tonnes of methane annually, compared to the baseline of 0.32% in 20171. OGCI will seek to go beyond this target, to achieve as much as one-third reduction in the same timeframe.

“Our aim is to work towards near zero methane emissions from the full gas value chain in support of achieving the goals of the Paris Agreement. We have worked to make our ambition concrete, actionable and measurable, helping to ensure that natural gas can realize its full potential in a low-emissions future,” the heads of the OGCI member companies said.

To reduce the OGCI’s collective methane emissions intensity, member companies will target key emissions sources. OGCI members are also engaging with other companies in the industry to help ensure that methane emissions are addressed across the full gas value chain.

OGCI New Members

This methane target comes as OGCI welcomes Chevron Corporation, Exxon Mobil Corporation, and Occidental Petroleum, three US majors that together represent 5% of global oil and gas production, to the initiative.

The new OGCI members support the collective methane reduction target and are aligned with OGCI collective goals, including recognition and support of the Paris Agreement, collective reporting, and a commitment to the aims of Zero Routine Flaring by 2030. They reinforce the capacity of OGCI’s work programs and share OGCI’s focus on developing a collective roadmap on carbon capture, use and storage. In addition, each will commit $100 million dollars to the OGCI Climate Investments fund.

Through its USD +1 billion investment fund OGCI Climate Investments, OGCI aims to increase the ambition, speed and scale of initiatives to reduce greenhouse gases. Today, OGCI Climate Investments announced its 2018 investments, focused on recycling and storing CO2 and on reducing methane emissions. Deployment of these technical solutions will support OGCI’s mandate.

In order to expand its global impact, OGCI Climate Investments today jointly announced with CNPC (the Chinese National Petroleum Corporation) that they are partnering to create OGCI Climate Investments China, an investment fund focused on China.

Launched in 2014, OGCI is now made up of 13 oil and gas companies: BP, Chevron, CNPC, Eni, Equinor, ExxonMobil, Occidental, Pemex, Petrobras, Repsol, Saudi Aramco, Shell and Total.

OGCI Baseline

The OGCI baseline in 2017 is 0.32% for the existing 10 member companies and accounts for total upstream methane emissions from all operated gas and oil assets. Emissions intensity is calculated as a share of marketed gas. The reduction is calculated on the basis of the volume of natural gas that reached the market in 2017. It should be noted that the 0.32% baseline and the collective annual reduction of 350,000 tonnes of methane emissions to reach the collective methane intensity target do not reflect the contribution of the three new US member companies (Chevron Corporation, Exxon Mobil Corporation, and Occidental Petroleum), that officially joined OGCI today.

The detailed methodology and assumptions are publicly available on the OGCI website.

European Study by NGVA Europe

Findings published in a 2017 study by Thinkstep for client Natural & Bio Gas Vehicle Association (NGVA) Europe, entitled Greenhouse Gas Intensity of Natural Gas, demonstrate the importances of considering the full life cycle of natural gas, from production and processing, to supply and use when comparing the benefits of different fuels. An analysis of Well-to-Wheel – GHG Emissions for SI (CNG) and HPDI (LNG) heavy duty vehicles in long haul use (weight percentage related to CNG/LNG dispensed in the tank) found that for CNG 77% of emissions occurred prior to fuel dispensing and vehicle use, and for LNG the same emission sources accounted for 70%.

Two research findings are cited:

  • Approximately a third of methane emissions are a result of oil and gas production and transmission.
  • In Europe, methane leakage from the transmission and distribution grids is estimated to be between 0.5% and 0.9% of the total of anthropogenic GHG emission

The efforts of OGCI and others are therefore likely to add significant impetus to the continued and expanded use of natural gas fuel for land and marine transportation.

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