The document discusses the environmental impact of methane emissions from oil and gas operations, highlighting that natural gas contributes minimally to overall energy-related emissions but methane emissions present significant uncertainties. It emphasizes that a large portion of these emissions is technically avoidable, and implementing cost-effective measures could substantially reduce emissions by 2040. The findings indicate that addressing methane emissions could yield climate benefits comparable to shutting down all coal-fired power plants in China.

1. © OECD/IEA 2017 © OECD/IEA 2017
Oil and gas methane
emissions and the
environmental case
for natural gas
Tim Gould and Christophe McGlade

2. © OECD/IEA 2017
WEO-2017 fuel focus on natural gas
n Follows on from focus on renewables in the WEO-2016
Ø The full focus will be launched as part of the WEO on 14 November
n Covers all aspects of the outlook for natural gas:
Ø Projections for demand & supply to 2040, costs & inter-fuel competition
Ø How the rise of LNG is reshaping international gas trade, investment & gas security
Ø Gas in a changing energy world & the energy transition
n Clear that future role of gas closely linked to its ability to help address environmental
problems
n Broad consensus over combustion emissions of gas: significant uncertainty over
methane emissions from oil and gas operations
n Aim of the methane emissions analysis to investigate the sources of this uncertainty
and explore what actions can be taken

3. © OECD/IEA 2017
Combustion emissions from gas are low
Share of gas in total energy-related emissions of air pollutants and CO2, 2015
Compared with other sources, natural gas makes
only a minor contribution towards today’s emissions
20% 40% 60% 80% 100%
Carbon dioxide
Nitrogen oxides
Sulfur dioxide
Particulate matter
Gas Coal Oil Bioenergy Non-combustion
31 Mt
79 Mt
108 Mt
32 Gt

4. © OECD/IEA 2017
The energy sector is responsible for a quarter of
annual methane emissions
Sources of methane emissions, 2012
Attributing methane emissions to specific sources is difficult, but human activity
is likely to be responsible for the majority of the 570 Mt emissions in 2012
3%
Wetlands
30%
9%
Agriculture
24%
Waste
11%
Biomass burning
Biofuels
Fossil fuels
20%
Anthropogenic sources Natural sources
Source: Saunois et al. (2016)
3%
3%
Other

5. © OECD/IEA 2017
Emissions come from a wide variety of sources
along the oil and gas value chains
Regional and sectoral breakdown of methane from oil and gas operations, 2015
Natural gas operations account for around 55% of our estimated 76 Mt methane
emissions in 2015, with Eurasia and the Middle East the largest emitting regions
Eurasia
25%
Middle East
22%
North
America
17%
Africa
13%
Central and South
America
11%
Asia Pacific
9%
Europe 3%
By region
Gas upstream
37%
Gas downstream
19%
Flaring 4%
Oil downstream
0.3%
Oil upstream
41%
By sector

6. © OECD/IEA 2017
The lifecycle emissions of gas are lower than coal
Greenhouse-gas emission intensity of natural gas compared with coal
The global average emission intensity of gas is low enough for gas to result in fewer
GHG emissions than coal regardless of the timeframe considered
2%
4%
6%
8%
0 20 40 60 80 100 120
CH4 conversion to CO2
Coal better than gas
Gas better than coal for electricity only
Gas better than coal
GWP100 from IPCC (2014)
GWP20 from IPCC (2014)
Methane leakage rate
Average global gas emission intensity

7. © OECD/IEA 2017
Three quarters of current oil and gas methane
emissions are technically avoidable
Global marginal abatement cost curve for oil and gas methane emissions, 2015
It is technically possible to reduce the 76 Mt current oil and gas emissions by 58 Mt;
half (38 Mt) can be avoided using approaches with positive net present values
North America
Europe
Middle East
Asia Pacific
Latin America
Africa
Eurasia
-10
-5
0
5
10
60
Mt
0 10 20 30 40 50
USD/MBtu

8. © OECD/IEA 2017
Just implementing measures with no net cost
would yield huge benefits for the climate
Methane emissions in the New Policies Scenario with and without abatement measures
Implementing measures with positive net present values reduces methane emissions
to around 50 Mt in 2040, 55% lower than they would have been otherwise
10
20
30
40
50
60
70Million tonnes
2015 2020 2025 2030 2035 2040
GasOil
2015 2020 2025 2030 2035 2040
Emissions with no abatement Reductions due to abatement measures

9. © OECD/IEA 2017
Conclusions
n Methane emissions along the value chain threaten some of the emissions
advantages natural gas holds over the other fossil fuels
n Gas generates far fewer GHG emissions than coal when generating heat or
electricity regardless of the timeframe considered
n Over 75% of the current 76 Mt emissions can be technically avoided; around 40-
50% can be mitigated at no net cost
n These measures would have the same impact on climate change as immediately
shutting all existing coal-fired power plants in China
n Achieving these reductions requires a step-change in ambition; few countries
have specific mitigation frameworks in place