Oil companies sign onto big climate deals to cut potent greenhouse gas
Saudi
Arabia and other big fossil fuel entities sign onto initiatives to cut
methane as they try to position themselves as part of the fix for
climate change
A
flare burns natural gas at an oil well in Watford City, N.D. The
federal agency that regulates pipelines announced in May new rules aimed
at reducing leaks of methane, a potent greenhouse gas, from a network
of nearly 3 million miles of natural gas pipelines. (Matthew Brown/AP)
The
world’s leading oil producers, including those in the United States,
are rolling out new plans in Dubai on Saturday to significantly reduce
methane from their operations — potentially the most consequential
action resulting from the first week of the United Nations Climate Change Conference, or COP28.
The
deals feature a first-time pact of 50 of the world’s biggest oil
companies — state-owned giants including Saudi Aramco along with
corporate supermajors including ExxonMobil — committing to nearly
eliminate methane emissions from their drilling and production work. It
also includes new regulations from the U.S. government and other
countries, and international monitoring efforts intended to hold
companies to their promises.
Sultan
Al Jaber — the Emirati oil executive leading COP28 — had pushed for the
international pact as the oil and gas industry’s response to climate
change, which activists have said is long overdue.
Al
Jaber said he is committed to transparency and hoped more companies
would join the pledge. “We must bring everyone in to be accountable,” he
said.
The
industry has focused on methane because it is a super polluter commonly
emitted from industry operations even though scientists say its
emissions must be swiftly reduced to meet the ambitious goal of the 2015
Paris climate agreement, preventing warming from exceeding 1.5 degrees
Celsius above preindustrial levels.
“If
those promises are met, it’s got the potential to cut temperatures we
would otherwise see within the next decade … more than anything agreed
to at prior COPs, more than anything I’ve seen in my entire career over
30 years,” said Fred Krupp, president of the Environmental Defense Fund,
or EDF. “There’ve been a lot of pledges made at COP that have never
been fulfilled. We feel like we have to set up a robust accountability
system.”
The effort comes as countries
and companies face increasing pressure to act on a greenhouse gas that
once was largely ignored but which is actually more than 80 times as
potent as carbon dioxide. Negotiations in recent weeks have involved
some of the world’s largest oil and industrial companies, banks, and top
government officials from the United States and the Middle East pushing
for a culmination of deals at the Dubai summit.
For
the oil-rich United Arab Emirates, COP28 has been a forum for them to
show that oil and gas can play a vital role in powering the world, even
in an era of climate change caused by fossil fuels. Currently the
industry leaks about 2 to 3 percent of all the gas it produces directly
into the atmosphere, adding to global warming, according to EDF. The
pact would require them to reduce those emissions to just 0.2 percent of
their output.
“The
underlying message is that this is their last, best chance to have an
impact,” Charles Hendry, a former U.K. minister of state for energy and
current fellow at the Atlantic Council Global Energy Center, said in an
email. “We need faster progress in decarbonizing the industry and
eliminating methane emissions.”
At
COP28 on Saturday, Environmental Protection Agency Administrator
Michael Regan detailed final standards to limit methane at U.S. oil and
gas wells, a precursor to subsequent announcements. In a proposal first
made two years ago, the agency had said it would put about 900,000 new
and existing wells under more aggressive requirements for preventing and
stopping leaks, a move the oil industry once fought for years but which
many leading companies have grown to support or accept.
Industry seeks to position itself as problem solver
The
announcements reflect how the oil and gas industry — long vilified by
climate activists — has become central to global climate negotiations,
and to this summit in particular. UAE leaders see their host status as a
chance to argue that fossil fuel producers are key to addressing
climate change, even though their past and ongoing emissions are major
drivers of rising temperatures.
Because
methane is so potent, U.S. officials and climate advocates are focusing
on it as one of the fastest ways to limit the acceleration of global
warming. If successfully implemented, the initiatives could be a
historic climate achievement, supporters say.
“If
you add it all together, what it amounts to is really momentum building
at a time when we really need it,” said Gina McCarthy, who once was
President Biden’s top climate adviser and was the first to introduce
methane limits on oil and gas operations as EPA administrator under
President Barack Obama. “People are ready to rally around an answer.”
Some
activist groups, however, said the rules fall short of addressing the
real problem — fossil fuel production. “It’s not enough to tinker around
the edges,” said Gabrielle Levy, associate director of methane gas
communications for the group Climate Nexus. He said the world needs to
take “concrete steps to cut those emissions at the source — by
eliminating the source.”
Global efforts on methane have taken off in recent weeks, including a breakthrough at Sunnylands, Calif., in talks between U.S. climate envoy John F. Kerry and Xie Zhenhua, his counterpart from China, the world’s largest greenhouse gas emitter.
China publicly committed for the first time to curbing methane and
other greenhouse gases across its economy by 2035. That followed up on
its previous announcement to push for new methane monitoring and
controls by 2025.
The
Sunnylands deal included a planned summit on methane and other gases —
those that aren’t carbon dioxide — which is scheduled for Saturday at
COP28 with the UAE hosts. Observers and delegates consider it to be
among the biggest events of the summit’s opening week, and many are also
expecting the UAE will orchestrate a pact of companies committing to
cut methane emissions.
Former
U.S. energy secretary Ernest Moniz, now a COP28 advisory committee
member, said society needs large international coalitions to address
climate change. Bringing in oil and gas companies is especially helpful
to work at the scale required, he added.
“I expect that COP28 will deliver,” Moniz said in an email.
Methane
has turned from an afterthought to a fixation for environmental groups
and energy companies over the past 20 years as warming has accelerated
and natural gas reshaped global energy markets. Some in both groups
initially pitched vast and newly cheap supplies of natural gas as a
cleaner alternative to coal, a “bridge fuel” until fully carbon-free
sources of energy could supplant fossil fuels. But new science then
undercut those claims.
Findings,
especially from work pursued by the Environmental Defense Fund, showed
that millions of leaks from minuscule to massive undid much of gas’s
climate benefits by allowing raw methane simply to escape into the
atmosphere. It ushered in a wave of regulatory crackdowns and political
debates, and led oil and gas companies to spend millions to protect
their businesses with new technology to detect and stop those leaks.
Methane, in its raw form, is one of the most powerful forces at trapping heat. It accounts for more than half of the warming happening now from the greenhouse effect, though it makes up only a quarter of global emissions. Halving
human methane emissions by 2030 could slow the rate of global warming
by more than 25 percent and start a path to prevent 0.5 degrees Celsius
of warming by 2100, according to 2021 research by a team of scientists
from the Environmental Defense Fund and several U.S. universities.
An
oil rig is sectioned off in a strip mall parking lot in The Village,
Oklahoma. Such rigs can emit large amounts of methane gas. (September
Dawn Bottoms/for The Washington Post)
That has led to the U.S. team’s emphasis in talks with Beijing. Kerry has pushed for China and other countries to join the Global Methane Pledge,
which aims to cut methane emissions 30 percent by the end of the
decade. Further expanding this coalition and producing success at
Saturday’s summit are among the top priorities for the delegation at COP28, U.S. officials have said.
They
plan for the summit to shift that pledge work to implementation,
including new spending to locate and address methane leak hotspots in
several countries. U.S. officials are announcing nearly $1 billion in
grants available, from government and philanthropic sources,
particularly for poorer countries that have state-owned oil and gas
producers that may be lacking in capital to do the work on their own.
U.S.
officials have been working with such nations, and expect some of them —
including Turkmenistan, the world’s fourth largest methane emitter, and
Kazakstan, the 12th largest — to announce new action plans as part of
the summit. To receive the grant money, countries would have to commit
to reducing their methane emissions from oil and gas production to
nearly zero.
The
British giant BP began trying to limit those emissions as far back as
the 1990s, but few others took interest because of low financial returns
from the work, said John Browne, the company’s former chief executive.
Companies need a combination of incentives and penalties to spur action —
and the state-owned companies must be a part of the deal because they
produce most of the world’s oil, he added.
Al
Jaber pursued a similar agenda, prodding companies to join what he is
calling the Oil and Gas Decarbonization Charter. As part of the deal,
companies are also agreeing to stop simply burning off gas as waste — a
process known as flaring — at their well sites by 2030, and commit to
effectively zeroing out all greenhouse gas emissions from their
operations from 2050.
The
key element is getting giant and often secretive state-owned oil
companies to join the commitment and agree to outside monitoring, said
John Browne, the former chief executive of British giant BP. Brazil’s
and Libya’s state-owned producers, among others, are also part of the
deal, and more than a dozen such companies are making first-time
commitments to eliminate emissions. It covers more than 40 percent of
all the world’s oil production.
“It’s
not material unless the state companies participate,” said Browne, who
now has interest in a company that monitors methane emissions through
satellite data. “It’s really important they pledge, and it’s even more
important that we monitor it and what is said is done.”
Several
environmental and international groups Saturday also announced a
coalition to do that, backed by $40 million from Bloomberg
Philanthropies. The International Energy Agency, an arm of the U.N., EDF
and the energy think tank RMI — all groups that already gather or use
satellites and data to track methane emissions — agreed to collaborate
and expand their efforts to hold oil and gas companies to their new
methane commitments.
They
said they would work together to share that data with financiers,
commodity buyers and governments, and help countries, especially
developing economies, to address their leaks. They also plan to advocate
together for stronger government regulations.
JPMorgan Chase — a major funder of energy companies — issued an analysis in the days leading up to COP28 encouraging oil and gas companies to aggressively reduce emissions,
calling it an opportunity for both businesses and climate. It cited
International Energy Agency estimates that the industry could eliminate
more than 75 percent of its methane emissions with existing and
well-known technology.
Even
so, levels of methane in the atmosphere have continued to rise. The
National Oceanic and Atmospheric Administration recorded the fourth-largest annual increase last year since measurements began in 1983. Levels are now 2.5 times what they were in preindustrial times.
‘Unacceptably high level of annual emissions’
The
industry has made strides in producing oil and gas with less emissions,
but only limited improvement, according to the IEA. Browne said what
the United States is introducing — incentives passed by Congress last
year and now the new regulations from the EPA — are the types of
policies that can spur progress.
“In
our view, we are at a constant but unacceptably high level of annual
emissions from the energy sector,” Tim Gould, the IEA’s chief energy
economist, said in a phone call with reporters. “We still remain far
above where the industry should be given the ease with which these
emissions can be abated.”
Regan
said that Biden was taking “strong action” Saturday. “We’ve crafted
these technology standards to advance American innovation and account
for the industry’s leadership in accelerating methane technology,” he
said in a statement.
Michael
Regan, the administrator of the U.S. Environmental Protection Agency,
speaks at the U.S. Center at the COP28 U.N. Climate Summit in Dubai on
Saturday. (Joshua A. Bickel/AP)
The
changes largely match what the EPA rolled out in phases over the past
two years, and what environmental groups had requested. They include a
phaseout of flaring at new wells; requirements for more leak monitoring
with the help of new technology; limits on emissions from vulnerable
equipment such as valves, pumps and storage tanks; and a program to spot
giant, unintentional releases that are often short-lived but the
biggest sources of methane emissions.
“Even
as we press to phase out our reliance on fossil fuels, we must work to
clean up existing operations rapidly and rigorously, and today’s
announcement does just that,” said White House National Climate Adviser
Ali Zaidi.
The
agency also will issue first-time guidance to states that will have to
set reduction requirements on existing sources of methane. The Clean Air
Act places the details of such plans in the hands of state agencies,
and the EPA is giving them two years to complete those plans under these
new rules, the federal agency said.
It
estimates the rule will cut methane emissions 80 percent from what
would have been expected without the rule. That is an increase over what
it had originally projected. That is because it strengthened provisions
since then to further limit flaring, among other improvements to its
method for analyzing the rule package’s impacts, the agency said.
“They’re the strongest methane regulations on the planet,” said Fred Krupp, president of the Environmental Defense Fund.
Christian Shepherd in Dubai contributed to this report.
Timothy
Puko is a reporter covering climate policy and politics for The
Washington Post. He has been covering energy and climate policy, and
geopolitics from Washington since 2017 and joined The Post in October
2022. He previously covered energy commodity markets from New York and
the environment and energy industry in Pennsylvania. Twitter