Methane Tracker 2020

Reducing the environmental impact of oil and gas supply is a pivotal element of global energy transitions

Methane from oil & gas

There is very little dispute about the emissions associated with combustion of fossil fuels and the differences between them: CO2 emissions per unit of energy produced from gas are around 40% lower than coal and around 20% lower than oil. However, there is much less consensus over the indirect emissions on the path from oil or gas production to final consumer, in particular the level of methane emissions that can occur – whether by accident or by design – along the way.

Total indirect greenhouse gas (GHG) emissions from oil and gas operations today are around 5 200 million tonnes (Mt) of carbon-dioxide equivalent (CO2-eq), 15% of total energy sector GHG emissions. Methane, a much more powerful (though shorter-lived) GHG than CO2, is the largest single component of these indirect emissions.

The World Energy Outlook includes detailed analysis of the indirect emissions associated with producing, processing and transporting the oil and natural gas consumed today.

This analysis highlighted the very broad range in the indirect emissions intensity of different sources of oil and gas. The most-emitting sources of oil and gas produce more than four times the indirect emissions than the least-emitting sources. Indirect emissions from oil are between 10% and 30% of its full lifecycle emissions intensity, while for natural gas they are between 15% and 40%.

Spectrum of the well-to-tank emissions intensity of global oil production, 2018

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Spectrum of the well-to-tank emissions intensity of global gas production, 2018

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Sources of methane emissions

We estimate there were 82 Mt methane emissions from oil and gas operations in 2019, split in roughly equal parts between the two.

These emissions came from a wide variety of sources along the oil and gas value chains, from conventional and unconventional production, from the collection and processing of gas, as well as from its transmission and distribution to end-use consumers. Some emissions are accidental, for example because of a faulty seal or leaking valve, while others are deliberate, often carried out for safety reasons or due to the design of the facility or equipment.

The CO2 emissions from the combustion of natural gas are certainly lower than those from coal. But are they also lower when assessing full lifecycle greenhouse-gas emissions, after taking account of methane emissions released during the supply of the respective fuels?

Most of the gas and coal produced today is used for power generation and as a source of heat for industry and buildings.

Our detailed estimates, taking into account both CO2 and methane, show a wide variation across different sources of coal and gas. Nonetheless, an estimated 98% of gas consumed today has a lower lifecycle emissions intensity than coal when used for power or heat (this comparison excludes any coal use for which gas could not be a reasonable substitute, such as coking coal used in steel production).

This analysis shows that, on average, coal-to-gas switching reduces emissions by 50% when producing electricity and by 33% when providing heat.

Full lifecycle emissions intensity of global coal and gas supply for power generation, 2018

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Full lifecycle emissions intensity of global coal and gas supply for heat generation, 2018

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This comparison underpins the emissions gains seen in many countries from switching from coal to natural gas, but it sets the bar too low. The environmental case for gas does not depend on beating the emissions performance of the most carbon-intensive fuel, but in ensuring that its emissions intensity is as low as practicable.

The longer-term comparison between the fuels also depends on the extent to which emissions are mitigated by large-scale deployment of carbon capture, utilisation and storage technologies.

Despite the emergence of new data from satellites and other measurement campaigns, there remains a high degree of uncertainty in estimates of methane emissions from oil and gas operations globally.

For example, a recent paper published in Nature examined historical ice cores and found that prior to 1950, natural geological sources of methane were much smaller (around 1-2 Mt/year) than has been generally assumed (between 40-60 Mt/year). As a result, the paper concluded that the aggregate level of methane emissions from fossil fuel production and consumption in recent years has been closer to 175 Mt/year rather than 120 Mt/year (as in IEA estimates).

What is clear is that the concentration of methane in the atmosphere has risen steadily since the mid-2000s. However, the cause of this increase is the subject of an active debate in the scientific community.  Possible explanations include:

  • The natural mechanisms that break down methane in the atmosphere are becoming weaker
  • There has been a rise in biogenic sources of methane (e.g. from agriculture or waste)
  • There has been a rise in natural sources of emissions (e.g. wetlands and other flood zones)
  • There has been a rise in emissions from the extraction of fossil fuels

Further research is ongoing by a number of scholars, but it is still not entirely clear which of these reasons is the dominant factor. The only way to reduce this uncertainty – and to improve understanding of abatement opportunities – is to continue to improve data transparency, and expand and deepen measurement activities. We are keeping a close eye on this and will further update and refine our estimates as more information becomes available.