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Methane abatement and regulation

The technologies that can prevent vented and fugitive emissions are reasonably well-known. The challenge is to incentivise the deployment of these abatement technologies via voluntary or regulatory means. In some cases, investment in abatement technologies is economic, as the gas saved quickly pays for the installation of better equipment or the implementation of new operating procedures. Where reduced emissions do not pay for themselves—or where barriers prevent companies from taking action that would otherwise be cost-effective—policy and regulatory interventions may serve to incentivise companies to take steps to reduce their emissions.

Voluntary initiatives, often industry-led, have played important roles in developing new approaches to abatement and in demonstrating what is possible and practicable. However, there are limits to what can be achieved by voluntary action alone, because the pool of those willing to take such action is limited, and because the actions themselves may fall short of what is desirable from a public policy perspective. Periods of lower natural gas prices – as seen in 2020 – also reduce the economic incentives to act, even though methane abatement offers some of the most cost-effective opportunities for emissions reduction. Sound policy and regulation have important roles to play to bring emissions into line with the trajectory in the Sustainable Development Scenario.

The IEA has prepared a detailed “how-to” guide for countries looking to develop policies and regulations in this area. The Regulatory Roadmap and Toolkit, launched in January 2021, describes in detail the experience of jurisdictions that have already adopted methane-specific regulations. It then seeks to translate that experience into a step-by-step guide to aid regulators in gathering the information they need to design, draft and implement an effective regulatory scheme.

One clear insight of this guide is that policy makers working to address oil and gas methane have a great deal to learn from each other. Many countries have already put in place regulatory requirements to address methane, and policy makers should look to this existing experience in designing new policy and regulation, drawing inspiration from the approaches most applicable to their local situation.

There is a great deal of diversity among regulatory approaches, and it should come as no surprise that different approaches have different advantages and disadvantages depending on the circumstances. In particular, the effectiveness of a policy provision may depend on the range of existing administrative authorities and regulatory capacity, the nature of the industry and the local emissions profile.

Another important insight is that certain regulatory approaches can lead to more economically efficient outcomes when compared to traditional, “command-and-control” requirements. This is because performance-based and economic instruments enable an operator to identify the most effective abatement options available across its operations rather than requiring specific measures.

On the other hand, performance-based and economic instruments typically require robust measurement and reporting regimes to function properly. Given this tradeoff, it may be preferable to proceed with targeted command-and-control requirements as a “first step” rather than waiting until better data are available. Over time, it may be possible to incorporate aspects of other approaches into a primarily prescriptive regime, such as broad facility or company level targets that complement other requirements. 

Overview of abatement technologies and costs

A wide variety of technologies and measures are available to reduce methane emissions from oil and gas operations. The options deployed vary by country, depending on the prevailing emissions sources, gas prices and capital and labour costs, but the global averages for the key options in the marginal abatement cost curve are shown below.

Marginal abatement cost curve for oil- and gas-related methane emissions by mitigation measure, 2020


The main mitigation measures included in the IEA marginal abatement cost curves are described below.

Many pieces of equipment in the oil and natural gas value chains emit natural gas in their regular course of operation, including valves, and gas-driven pneumatic controllers and pumps. Retrofitting these devices or replacing them with lower-emitting versions can reduce emissions.

Early replacement of devices: Pneumatic devices are used throughout production sites and compression facilities to control and operate valves and pumps with changes in pressure. Gas-driven automatic pneumatics release a small amount of natural gas as part of their control functions. Devices can be categorised as low-, intermittent- or high-bleed, based on the rate of gas that escapes. Intermittent-bleed devices release gas only when actuating. Replacing higher-bleed devices with lower-bleed devices reduces emissions. The earlier devices are swapped out, the more emissions will be avoided.

Replace pumps: Pneumatic pumps that use pressurised natural gas as a power source also vent natural gas in the ordinary course of their operation: these emissions can be eliminated through replacement with electrical pumps powered by solar or other generators, or connected to the grid.

Replace with electric motor: Gas-driven pneumatic devices continuously release small amounts of gas, even when specified as "low-bleed." These devices can be replaced with "zero-bleed" technologies that use electrical power to operate, instead of pressurised natural gas. An electric motor can also replace a diesel or gas engine used onsite during drilling and well completion.

Replace compressor seal or rod: Different kinds of compressors are used across the oil and natural gas supply chains to move product through the system, and the methane abatement cost curve include several activities that reduce the possibilities for gas to escape.

Replace with instrument air systems: Pumps and controllers that vent natural gas by design can be replaced by instrument air systems, which pressurise ambient air to perform the same functions without emitting methane.

There are a number of opportunities across the supply chain to install new devices that can reduce or avoid large sources of vented emissions.

Vapour Recovery Units (VRUs) : VRUs are small compressors designed to capture emissions that build up in pieces of equipment across the oil and natural gas supply chains. For instance, VRUs can capture gases that accumulate in oil storage tanks and that are otherwise periodically vented to the atmosphere to prevent explosion.

Blowdown capture: Gas blowdowns are conducted at wellheads or elsewhere along the supply chain when equipment (e.g. vessels, compressors) must be depressurised. Blowdowns can be triggered by emergency signals or routine start up or shut down procedures. When this happens, operators open up the well to remove the liquids and gas. Emissions are mitigated when excess gas is recovered and used onsite or sent to the sales line, instead of being vented or flared. 

Install flares: While still a source of CO2 and methane emissions, flaring is preferable to direct release of the methane gas to the atmosphere. Flares can be installed at oil and gas production sites where gas production exceeds onsite demand or nearby pipeline capacity, to combust methane emissions. Portable flares can expand a facility’s flare capacity and provide an outlet for gas captured during well workovers or completions.

Install plunger: Periodically over the life of a producing well, downhole liquids need to be removed to facilitate continued flow of product (often called "liquid unloading"). Traditionally, a well operator opens the well and vents methane, relieving pressure and drawing liquids up through the wellbore. Plunger lifts may be installed to extract liquids more efficiently, while limiting the escape of methane. As pressure from accumulating fluids builds up, it pushes on the plunger. The plunger draws up gas and liquids in its wake. If a certain threshold of reservoir pressure is achieved through withdrawal of the plunger, gas can go directly to the sales line with no venting. 

Leak detection and repair (LDAR) refers to the process of locating and repairing fugitive leaks. LDAR encompasses several techniques and equipment types. One common approach is the use of infrared cameras, which make methane leaks visible. LDAR can be applied across the supply chain—to upstream activities (including well development, gathering, processing) and/or downstream activities (such as transmission or distribution lines).

In the cost curve, we include varying frequencies of these programmes, from monthly to yearly—the more frequent LDAR programmes are, the less the amount of gas that tends to be saved as a result of each programme, while the costs remain stable. This is what one would expect from effective programmes.

The cost of inspection differs depending on the value chain segment in question—LDAR programmes tend to be more cost effective for upstream operations since it takes longer to inspect compressors on transmission pipelines, relative to those concentrated in a production facility.

IEA analysis includes technologies and techniques in addition to the categories above. The “Other” label includes approaches such as: installing methane-reducing catalysts; deploying microturbines or other technologies that allow for local productive use of associated gas in remote locations: conducting a pipeline pump-down before maintenance; and reduced-emission or "green" completions.