How oil and gas companies disguise their methane emissions

Methane is the main contributor to the formation of ground-level ozone — a hazardous air pollutant responsible for the deaths of 1mn people from respiratory illnesses globally each year. But an even bigger threat is to the climate. 

While it may not persist as long in the atmosphere as carbon dioxide, over a 20-year timescale methane is 80 times more potent at trapping heat. It has been responsible for an estimated 30 per cent of the world’s warming since the industrial revolution.

Some methane comes from natural sources such as wetlands and volcanic gas. But the bulk of emissions are caused by human activity — agriculture, landfill waste and the fossil fuel industry.

The problem has long been obscured because of a lack of tools to detect and measure it. Odourless and colourless, the gas is notoriously difficult to track. Until recently, methane surveys mostly took place on the ground with handheld devices or through aerial flyovers that detect it through its interactions with light waves.

Energy companies have found numerous ways to hide the magnitude of their emissions, according to analysis by the Financial Times. “Oil and gas is emitting far more methane than we realise,” says Eric Kort, professor of climate, space sciences and engineering at the University of Michigan.

As the current host of the world’s most important climate summit, Azerbaijan — which derives 90 per cent of its export revenues from fossil fuels — plans to unveil a pledge to tackle methane in organic waste. The US and China will also hold a side meeting on the subject. By contrast, emissions coming from the oil and gas industry are not leading this year’s agenda.

Methane reductions in the short term are the fastest way we have to avoid the worst effects of climate change

Yet emissions from the energy sector reached a record high in 2023 — a frustration to some analysts, who point out it is among the cheapest and quickest opportunities for tackling global warming currently available.

“Methane reductions in the short term are the fastest way we have to avoid the worst effects of climate change,” says Manfredi Caltagirone, head of the International Methane Emissions Observatory at the UN Environment Programme (UNEP). “[And] the sector with the highest reduction potential is the oil and gas industry.”

A previous COP summit held in 2021 launched the Global Methane Pledge, an initiative backed by more than 150 countries, which aims to cut global emissions by 30 per cent by 2030 compared with 2020 levels. According to recent data, however, aggregate methane emissions continue to increase.

There is now a rush to roll out new satellites and other tracking technology, alongside the introduction of new limits and rules. Earlier this year, the EU adopted sweeping methane regulations that, among other things, require oil, gas and coal companies to monitor, detect and repair methane leaks.

“We’re just now starting to . . . pull the curtain back on methane emissions globally,” says Riley Duren, Carbon Mapper’s chief executive. The company’s first satellite, Tanager-1, has detected plumes from oil and gas sites in locations as varied as Syria, Libya and Texas since launching in August, he says.

The question is whether these emissions can be detected — and governments and companies convinced to act — fast enough to make a meaningful difference.

“Until we get really accurate methane data on a global basis, it is going to be difficult to rein in emissions,” says Paul Bledsoe, a former Clinton White House climate adviser. “And we really are only at the beginning of that.”

For many people, carbon emissions have become synonymous with anything related to climate change. In fact, up to seven greenhouse gases are responsible for heating the earth’s atmosphere, and methane is the second-biggest contributor after CO₂. Yet only at last year’s COP28, held in Dubai, did countries agree that their next set of plans to tackle climate change needed to include all greenhouse gases across all sectors, not just CO₂. 

Meanwhile, methane emissions are rising at a record rate, according to a study published in September in the journal Earth System Science Data. Over the past two decades, they have increased by around 20 per cent. Atmospheric concentrations of the gas are now more than 2.6 times higher than in pre-industrial times, the highest they’ve been in at least 800,000 years.

Methane is mostly caused by human activity, but natural sources are helping to accelerate emissions, scientists say. As temperatures are driven up, wetlands emit more methane, as does melting permafrost — driving a “doom loop” of ever greater warming.

Although methane from agriculture has received more publicity, including calls for consumers to avoid dairy and eat less meat, the energy sector is the next most important human-related cause, responsible for a third of all methane emissions that are linked to human activity. The compound is the main component of natural gas as well as a byproduct of oil drilling. 

It finds its way into the environment in several ways: vented into the atmosphere from oil and gas fields for safety reasons or in emergencies, or “flared” from pipes or chimneys, which turns it primarily into smoke and carbon dioxide. (If the flaring is inefficient, pure methane is emitted too.)

Much also escapes by accident, either from leaks in piping and equipment, or because companies claim it’s too expensive to capture.

Mark Davis, chief executive at the flaring specialist Capterio, says that almost 7 per cent of gas produced is wasted through venting, flaring and leaks. If it captured this gas then sold it on, the sector could reduce emissions to the atmosphere by up to 6.8bn tonnes of CO₂ equivalent — around the same as total US greenhouse gas emissions in 2022 — and also make some $50bn in revenue per year, he argues.

Leakage from old plants and rusty equipment is a significant issue, not only in poorer nations such as Iran, Angola or Venezuela but in rich producers such as the US. Companies “prefer to expand production instead of fixing the leaks,” says Marcelo Mena, former environment minister of Chile and chief executive of the philanthropic Global Methane Hub.

Many companies have pledged to cut their methane emissions, including Socar, the state oil company of Azerbaijan. At COP28 last year, 50 companies backed an initiative to bring methane emissions down to near-zero in upstream oil and gas — the initial stage of production — and to end routine flaring by 2030. 

Yet according to the International Energy Agency, the industry’s methane emissions hit a new high in 2019 and have stayed near that level since. And they are almost certainly being undercounted: the IEA also estimates that global methane emissions from the energy sector are about 70 per cent greater than the amounts that nations have reported. 

According to a study published in Nature earlier this year and based on 1mn aerial measurements of wells, pipelines, storage and transmission facilities in six regions of the US, emissions were almost three times higher than estimates provided by the federal government.

That gas is worth some $1bn on the market, the researchers said. Meanwhile, the estimated cost to society is $9.3bn — a rough calculation of the consequent damage to agricultural productivity, human health and property. 

Josh Eisenfeld, who tracks methane emissions at Earthworks, a US non-profit focused on ending energy pollution, says a major problem is that the industry “is trying to self-police”. Much of the equipment used by oil and gas companies fails even to spot smaller methane leaks, he argues. 

The big international oil companies are a long way from the reductions in flaring that are needed

An investigation by Earthworks and Oil Change International found that “continuous emissions monitors”, used by producers to record the release of pollutants in real time, detected only one emissions event in Colorado — their own researchers recorded 23.

Methane flaring is also under the spotlight. The World Bank says the amount of gas currently flared each year, about 148bn cubic metres, could if captured power the whole of sub-Saharan Africa for a year.

A World Bank initiative to ban routine flaring — as opposed to in emergency situations — by 2030 has achieved industry and national support, but energy companies are only required to report emissions figures for facilities they themselves operate, even if other entities own large stakes. That lack of reporting has meant that big oil has been able to hide the issues’ true extent, suggests research shared exclusively with the FT from the Clean Air Task Force, an environmental group. 

More than half of the flaring associated with 10 big oil companies comes from assets they don’t directly operate. For BP, this figure was more than 85 per cent. (BP says it reports all flares from the upstream sites it operates, regardless of the size of its equity stake.)

Critics have also claimed that some “emergency” flaring was in fact being done routinely, further muddying the data. Davis says the “interpretation of the World Bank definition . . . varies widely by company”. 

There are also questions over the use of so-called enclosed combustors — structures designed to reduce air and light pollution. Scientists and campaigners have expressed concern that companies are using combustors to hide the true extent of their flares. In September, a group of countries that are pushing for ambitious climate action, including Kenya, Chile and Finland, issued an open letter in which they urged an end to the practice being used to cover up emissions

“The big international oil companies are a long way from the reductions in flaring that are needed,” says Jonathan Banks, global director for methane pollution prevention at CATF.

According to Duren, it’s not only catastrophic major leaks — such as the explosions at the Nord Stream pipelines in 2022, which produced dramatic footage as the gas bubbled up through the sea — that are significant. “Tackling super emitters is the fastest way to make significant action,” he says. “But we also have to address the large number of small emitters.”

Major producers insist they are stepping up action. A report released on Monday from the Oil and Gas Climate Initiative, which brings together 12 big oil and gas companies, said that they had collectively reduced upstream methane emissions by 55 per cent at sites they operate between 2017 and 2023. But these producers are just a small section of the industry.

A spokesperson for COP29 says, “Azerbaijan takes methane emissions from any source, be it oil and gas, agriculture or waste, extremely seriously and is taking steps to reduce them.”

As countries scramble for ways to meet the 2015 Paris agreement, which aimed to limit global temperature rises to well below 2C and ideally to 1.5C above pre-industrial levels, solving the methane crisis is likely to be a large part of the solution.

Technology, especially satellite technology, is evolving rapidly. Financed by private philanthropy or set up as commercial operations, alongside those launched by government space agencies, some satellites are designed to give an overall global picture of methane concentration while others are used to zoom in on individual leaks, even identifying the exact plant responsible.

“Remote sensing from satellite and aircraft really makes what has been traditionally invisible visible,” says Duren of Carbon Mapper. Since the start of 2022, at least 13 emissions-monitoring satellites have launched. 

Still, a comprehensive picture requires many more in orbit, perhaps hundreds — a costly endeavour that will require the backing of nation states. Improved on-the-ground measurements will also be necessary.

As new technology provides more detail, there is a growing expectation among campaigners that the oil and gas industry will push back. “They are going to attack the measurements. We are prepared for the ‘shoot-the-messenger’ tactics,” says Marcelo Mena of the Global Methane Hub.

In 2023, UNEP’s Methane Alert and Response System informed the Argentine government of a leak detected by satellite; it was promptly fixed. But Caltagirone said other governments and companies have not reacted so quickly. “The satellites are really, really revolutionary. [But] I also don’t think that satellites alone will fix the issue,” he says. 

There are also calls for countries to introduce new and much stricter regulations. The extension of the EU’s methane rules to businesses outside the bloc from 2027 is aimed at making it difficult for any company that fails to address leaks to sell its gas in Europe.

In the US, the Biden administration is set to introduce methane pricing — a tax on emitters of $900 per tonne of methane in 2024, rising to $1,500 per tonne in 2026. The final details may be announced in Baku, according to people familiar with the plans.

But the regulation is yet to come into effect. And many at the summit are anxious that the election of Donald Trump could hit progress on climate change, including methane emissions.

“Regulations making deep reductions under the Biden administration are in danger of being reversed, despite the US industry saying it’s prepared to limit methane more substantially,” says Bledsoe, the former White House climate adviser. Now is the time for China to step up, he adds.

Mena also wants the US, China and other countries to outline how they are tackling methane. Without this, he argues, there is little hope that the world might limit warming increases to 1.5C.

“We need to see other big emitters send a signal that they will address these emissions,” he says. “Frankly, there is no 1.5C without methane mitigation being explicit. And that’s the reality.”