Methane emissions from the global oil and gas industry fell by an estimated 10% in 2020 as producers slashed output in response to the historic shock of the Covid-19 crisis, the International Energy Agency said today, warning that these emissions could rebound strongly without greater action by companies, policy makers and regulators.
Methane is a much more potent greenhouse gas than carbon dioxide (CO2) and makes a major contribution to global warming. According to the IEA’s 2021 update of its Methane Tracker, oil and gas operations worldwide emitted more than 70 million tonnes of methane into the atmosphere last year. This is broadly equivalent to the total energy-related CO2 emissions from the entire European Union.
The new IEA analysis indicates that a large part of the drop in methane emissions in 2020 occurred not because companies were taking more care to avoid methane leaks from their operations, but simply because they were producing less oil and gas. As such, there is clearly a risk that this downward trend will be reversed by an increase in production to fuel a rebound in global economic activity.
“The immediate task now for the oil and gas industry is to make sure that there is no resurgence in methane emissions, even as the world economy recovers, and that 2019 becomes their historical peak. There is no good reason to allow these harmful leaks to continue, and there is every reason for responsible operators to ensure that they are addressed,” said Dr Fatih Birol, the IEA Executive Director.
“Alongside ambitious efforts to decarbonise our economies, early action on methane emissions will be critical for avoiding the worst effects of climate change. There has never been a greater sense of urgency about this issue than there is today, said Dr Birol. “To help accelerate these efforts, the IEA is today releasing a ‘how-to’ guide that governments and regulators can use to bring down methane emissions from oil and gas operations.”
IEA analysis highlights that reducing methane emissions is very cost-effective for oil and gas companies. Unlike CO2, there is already a price for methane everywhere in the world – the price of natural gas. This means the costs of improving operations or making repairs to prevent leaks can often be paid for by the value of the additional gas that is brought to market.
“We believe that industry must act, visibly and quickly,” Dr Birol said. “But there is also a strong role for government policies; to incentivise early action by companies, push for transparency and improvements in performance, and support innovation in getting results.”
The new IEA report, Driving Down Methane Leaks from the Oil and Gas Industry: A Regulatory Roadmap and Toolkit, offers a step-by-step guide for anyone trying develop or to update regulation on methane. Its advice draws on analysis of how more than 50 countries, states or provinces – from the United States to Nigeria, from Iraq to China and Russia – have tackled methane emissions from a regulatory perspective.
“In this crucial year for climate action leading up to COP26 in Glasgow in November, this is the moment for governments to raise ambitions not only on CO2 but also on methane,” Dr Birol said. “One important avenue, especially for countries with large oil and gas sectors, will be to include commitments on methane in their new or updated pledges in advance of the COP meeting. This is also the moment for companies to put all their weight behind this effort.”
The case for action is not just environmental or reputational. There are increasing signs that consumers are starting to look carefully at the emissions profile of different sources of gas when making decisions on what to buy. A gas producer without a credible story on methane abatement is also one that is taking commercial risks.
Strength of IEA-ASEAN energy cooperation highlighted at Ministerial meeting
IEA Executive Director Fatih Birol spoke today to Energy Ministers from across Southeast Asia about the latest global and regional energy trends, pathways to net zero emissions and the importance of clean energy investment.
He was participating in the seventh annual dialogue between the IEA and Ministers from the Association of Southeast Asian Nations (ASEAN) – the economic bloc comprised of 10 Southeast Asian economies. The meeting was hosted via video link by Brunei Darussalam, which is chairing ASEAN’s 39th annual Ministers on Energy Meeting (AMEM).
“The IEA remains firmly committed to assisting ASEAN and its member states in developing pathways towards net zero that respect their capacities and capabilities,” Dr Birol told the Ministers. “One of the key messages from the IEA’s Roadmap to Net Zero by 2050 Roadmap is that not all countries are starting the race to net zero from the same place. I have and will continue to underscore the importance of ensuring that a greater share of global clean energy investment is directed towards the emerging and developing economies including in Southeast Asia to unlock new economic growth possibilities and emissions reductions.’’
This year’s ministerial marks the tenth anniversary of IEA-ASEAN energy cooperation, which was established with a Memorandum of Understanding at the 2011 AMEM in Brunei’s capital, Bandar Seri Begawan. The Ministers and Dr Birol welcomed the adoption of a Commemorative Statement on IEA-ASEAN Energy Cooperation.
The IEA has significantly scaled up its work with ASEAN and its Member States over the past six years. Indonesia and Thailand became IEA Association Countries in 2015, and Singapore did so the following year. In 2019, under Thailand’s Chairmanship, the IEA was named a Strategic Partner of ASEAN.
The IEA is committed to continue working with ASEAN and its Member States on key energy priorities, including energy security, energy efficiency, clean energy, energy investments and decarbonisation.
“On this, the tenth anniversary of our collaboration, the IEA is more determined than ever to continue to work hand in hand with our partners in the region to help achieve your energy goals,’’ Dr Birol said. “I very much look forward to the next ten years.”
The ASEAN Chair in 2022 will be held by Cambodia.
Indonesia’s First Pumped Storage Hydropower Plant to Support Energy Transition
The World Bank’s Board of Executive Directors today approved a US$380 million loan to develop Indonesia’s first pumped storage hydropower plant, aiming to improve power generation capacity during peak demand, while supporting the country’s energy transition and decarbonization goals.
“The Indonesian government is committed to reduce greenhouse gas emissions through, among others, development of renewable energy, energy conservation, and use of clean energy technology. Emission reduction in the energy sector will be driven by new and renewable energy generation and application of energy efficiency,” said Arifin Tasrif, Minister of Energy and Mineral Resources of the Republic of Indonesia.
Over 80 percent of the power generated for the Java-Bali grid, which supplies electricity to 70 percent of the country’s population, comes from fossil fuels. A key measure to support Indonesia’s decarbonization agenda is the development of energy storage to enable integration of renewable energy into the grid. Pumped storage hydropower plays a crucial role in this approach.
The financing will support the construction of the Upper Cisokan pumped storage hydropower plant, to be located between Jakarta and Bandung, with an expected capacity of 1,040 MW. The facility will have significant power generation capacity to meet peak demand, provide significant storage capacity to enable a larger penetration of renewable energies and, because of its close location to two large demand centers, will alleviate increasing transmission loads on the grid. As a result, a more environmentally friendly and reliable supply of electricity will benefit consumers in Java and Bali.
“We are excited about this project as it will be the first of its kind for Indonesia. It represents a turning point for Indonesia’s decarbonization pathway. The World Bank will continue to support Indonesia in its efforts to achieve resilient, sustainable, and inclusive development that will benefit the people of Indonesia now and in the future,” said Satu Kahkonen, World Bank Country Director for Indonesia and Timor-Leste.
Pumped storage hydropower makes use of two water reservoirs at different elevations. At times of low electricity demand or when there is abundant generation from clean power sources, such as solar energy, power from the grid is used to pump water to the upper reservoir. Power is generated during peak demand, usually evening hours, as water moves down to the lower reservoir using a turbine, when electricity generation costs are high.
The project will help enhance the system flexibility and efficiency in balancing supply and demand, and therefore improve the reliability and quality of electricity services in Java and Bali. It also aims to support the government to integrate variable renewable energy into the Java-Bali grid, and to do so in an environmentally and socially sustainable manner.
Iran determined to boost oil exports despite sanctions
Iranian Oil Minister Javad Oji has said the Islamic Republic is determined to increase its oil exports despite the U.S. sanctions on the country’s oil industry, adding that the use of oil sanctions as a “political tool” would harm the market.
“There is strong will in Iran to increase oil exports despite the unjust and illegal U.S. sanctions; I promise that good things will happen regarding Iran’s oil sales in the coming months,” Oji told the state TV.
As reported by IRIB, Oji noted that Iran can barter its crude oil for goods or even for services and investment not only in the oil industry but also in other sectors as well.
“Oil sales have dropped dramatically since the imposition of unjust sanctions, but this capacity exists in the Oil Ministry and all the industry’s departments to increase oil sales,” the minister said.
Iranian oil exports have plunged under U.S. sanctions, which were reimposed three years ago after Washington abandoned Tehran’s 2015 nuclear deal with six powers.
“Iran will return to its pre-sanctions crude production level as soon as U.S. sanctions on Iran are lifted,” Oji said.
“We are against using oil as a political tool that would harm the oil market.”
Since April 9, Tehran and six world powers have been in talks to revive the nuclear pact. The sixth round of the negotiations adjourned on June 20. The next round of talks has yet to be scheduled.
Oji said Iran backed a decision made by the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, on Wednesday to stick to a policy from July of phasing out record output cuts by adding 400,000 barrels per day (bpd) a month to the market.
Iran has been gradually boosting crude oil production to get ready for a strong comeback into the global market as the talks with world powers over the nuclear deal show signs of progress.
According to a Bloomberg report, National Iranian Oil Company (NIOC) officials have stated that the country’s oil fields are going through overhaul operations and connections with oil buyers are being re-established.
“In the most optimistic estimates, the country could return to pre-sanctions production levels of almost four million barrels a day in as little as three months,” the report published in May stated.
American Weaponry in the Hands of the Taliban
The hasty withdrawal of the U.S. forces from Afghanistan attests to both the indifference of the U.S. administration as regards...
Deloitte reports FY2021 revenue
Deloitte today reported aggregate global revenue of US$50.2 billion for the fiscal year ending 31 May 2021 (FY2021), a 5.5%...
Action on Trade is Necessary for Businesses to Unlock Net Zero Targets
For businesses to reach their emission targets, the global trading system needs to adapt, and businesses are calling for the...
Lebanon crisis: More international assistance needed urgently
Lebanon’s enduring economic crisis risks reversing decades of gains in people’s wellbeing, the head of the UN World Health Organization (WHO) said on Friday. Speaking from the...
77 million children have spent 18 months out of class
The UN Children’s Fund (UNICEF) says the world is facing an education crisis due to the COVID pandemic, that has left nearly 77...
Synchronicity in Economic Policy amid the Pandemic
Synchronicity is an ever present reality for those who have eyes to see. –Carl Jung The Covid pandemic has elicited...
Paris climate deal could go up in smoke without action
Unless wealthy nations commit to tackling emissions now, the world is on a “catastrophic pathway” to 2.7-degrees of heating by...
Economy3 days ago
Russia, China and EU are pushing towards de-dollarization: Will India follow?
Finance4 days ago
Instagram: Why It Is the Best Social Media Platform for Marketing
Intelligence4 days ago
How Taliban Victory Inspired Central Asian Jihadists
Southeast Asia4 days ago
The new AUKUS partnership comes at the cost of sidelining France, a key Indo-Pacific player
Southeast Asia4 days ago
Visit of Chinese Foreign Minister to Southeast Asia
Middle East1 day ago
Turkey’s Destruction of Cultural Heritage in Cyprus, Turkey, Artsakh
South Asia3 days ago
Panjshir – the last stronghold of democracy in Afghanistan
Americas4 days ago
Biden’s credibility restoration plan