Development of a Profitable Greenhouse Gas Emissions Reduction Strategy

For most companies, a discussion of greenhouse gas (GHG) emissions reductions equates to reducing CO₂ emissions, which is typically cost-prohibitive. However, a different approach adopted by numerous companies throughout the world addresses methane emissions instead. Even the United Nations Environment Programme (UNEP) has shifted its focus from CO₂ to short lived climate forcers, such as methane, in the post Kyoto Protocol world. Methane emissions reductions can significantly reduce a company’s overall GHG emissions while also recovering a valuable energy resource. This paper will outline a strategy for cost-effectively reducing emissions of GHGs. Key steps include 1) development of an internal GHG emissions tier 3 inventory, 2) field verification of emissions estimates, 3) project identification, prioritization, and design, and 4) economic assessments of mitigation projects.

Methane, a powerful GHG with a global warming potential of 25 over 100 years¹, is the primary component of natural gas. Methane emissions can be found throughout the entire natural gas value chain (production, processing, transmission and distribution of gas) and in upstream oil production. Typically, there are 3 types of methane emissions: fugitive (unintentional leaks), vented (intentional or designed releases) and as an unburned hydrocarbon from combustion. A robust GHG emissions reduction strategy would allow companies to evaluate and address emissions of all types.

Although volumetric methane emissions on a company level are not as high as CO₂ emissions, because of the high global warming potential, methane on a CO₂ equivalent basis is equal to or higher than CO₂. Methane is often much simpler to address when considering costs and technical constraints. As a result, companies focusing on methane are able to make progress toward their GHG emissions reduction goals. Given the environmental impacts of methane, its economic value as an energy resource, and the relative ease of implementing mitigation projects, methane emissions reduction projects become an attractive area of focus for oil and gas companies as they look to reduce their GHG emissions and improve efficiency and economic co-benefits.

Development of a GHG emissions reduction strategy would streamline the process of addressing emissions and better position the company to undertake these endeavors. Implementation of an efficient approach, which has been successfully used by a large number of companies in the United States as well as globally, enables companies to better understand their current impact on the climate, identify potential project opportunities, and, lastly, follow through with implementation of key projects.