$39 billion

The gas wasted globally each year is worth $39 billion (more than the 2017 GDP of Bahrain) - at conservative prices.

257 billion m3

257 billion cubic metres of gas is wasted globally every year (enough to power almost 1 billion western homes).

84X worse than CO2

Methane is a greenhouse gas which is 84 times worse for the climate than CO2 over a 20-year time frame.

 

What is the methane challenge of natural gas?

Today, natural gas provides around 23% of the global total primary energy and it's on the increase. That’s in part because natural gas is widely viewed as a critical fuel to enable the decarbonisation of our global energy systems and, therefore, the delivery of the energy transition. Conventional estimations of the carbon intensity of natural gas put it is 50% lower than coal and 25% lower than liquid fossil liquid.

However, gas (which is mostly methane, or CH4) has a problem. The equivalent of 47% of the consumption of Europe is wasted each year through flaring, venting and leaking, making its advantage over coal much less clear. Yet, by fixing this waste globally each year, we could reduce emissions by over 7 billion tonnes of CO2e¹, halve the CO2e intensity of natural gas, bring an additional 257 BCM² to market, create revenues of up to $39 billion³ and enable markets to offer consumers cleaner, lower-methane gas products. 

1 CO2-equivalent. Our calculations of the total CO2 emissions account both for CO2 emissions, but also those of methane, noting that methane is 84x more toxic to the environment over a 20-year timescale. 2 According to the IPCC. 3 BCM = Billion Cubic Metres. Data from the World Bank and IEA

 
 
Although there will always be some end-use emissions from natural gas (unless the CO2 is sequestered), “bad” gas supply chains can be transformed into “good” gas supply chains by cleaning up emissions from operations, flaring, venting and leaking.

Although there will always be some end-use emissions from natural gas (unless the CO2 is sequestered), “bad” gas supply chains can be transformed into “good” gas supply chains by cleaning up emissions from operations, flaring, venting and leaking.

 
 

Luckily, the technology exists today to solve most of these issues, often at no net cost, and the leading gas producers are now showing real commitment to address this challenge. Senior executives at one supermajor recently said publicly that "gas may not even be a transition fuel, let alone a destination fuel unless we solve the problem of methane emissions.” 

It is technically possible to avoid around three quarters of the current 76 Mt of methane emissions.
40 to 50% of current oil and gas related methane emissions could be avoided at no net cost.
— IEA's World Energy Outlook 2017
 

Until recently, emissions associated with natural gas related to those generated in the end-use component of the natural gas value chain. Yet the entire value chain needs to be considered (from upstream production through processing, transportation and distribution) to derive the complete picture. Getting this right across the value chain is critical if the notion that natural gas as a suitable transition fuel is correct.

 

Types of methane emissions in the natural gas system:

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Operating

Gas is often consumed (to power facilities and operations) during the extraction of oil and gas. A better alternative could be to use renewables (e.g. solar or hydro energy) for “own operations”, so-called “scope 2” emissions,

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Flaring

Flaring is the deliberate burning of natural gas, and leads to large CO2 emissions. Since most flares deliver only partial combustion of gas, significant volumes of uncombusted methane are also emitted from flares.

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Venting

Venting is the deliberate release of methane directly into the atmosphere.

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Leaking

Leaking is the accidental release of gas into the atmosphere, often related to sub-optimal maintenance.

 

In 2018 there were +10,000 flares globally, wasting 145 BCM of natural gas (according to the latest data published by The World Bank)

The chart below shows the top flaring countries (left figure) and a comparison of flaring with its principle driver, being oil production (right figure). The global average figure is 1.5 BCM of flared gas per year per million barrel of production per day.

This chart shows the scale of the challenge of flaring of natural gas - both on an absolute (left) and relative (right) basis. Data is from the BP Statistical Review of World Energy and the World Bank GGFR programme, with analysis by Capterio.

This chart shows the scale of the challenge of flaring of natural gas - both on an absolute (left) and relative (right) basis. Data is from the BP Statistical Review of World Energy and the World Bank GGFR programme, with analysis by Capterio.

Barriers to Industry Action

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Lack of issue awareness

  • Consumers, asset operator and market awareness on the issue is lacking

  • Lack of emissions measurement capacity (or standards)

  • Some operators are in denial

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constrained execution capacity or capital funding

  • Lack of funding from venture partners

  • Issue is usurped by competing priorities

  • Challenging bureaucracy

  • Lack of execution capacity

  • Challenging country context

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insufficient economic attractiveness

  • Low market value of captured gas (e.g. from subsidised pricing or poor fiscal terms)

  • High unit cost of capture infrastructure

  • Difficulty attracting project funding

  • Lack of local infrastructure to get captured gas to market

 

Learn more about how Capterio’s solution is addressing these systemic industry barriers…

 

For Further Reading…

Download our Capterio speaker presentation from the 2019 NAPEC conference in Algeria