What will it take to get sustained benefits from natural gas? Examining the climate impacts of methane leakage from natural gas
There has been much
confusion about the impacts of increased natural gas use on the climate. While natural gas burns
cleaner than other fossil fuels when combusted, methane leakage from the
production, transportation, and use of natural gas has the potential to
undermine some or all of those benefits, depending on the leakage
. Methane is the main ingredient in natural gas
and a greenhouse gas (GHG) pollutant many times more potent than carbon dioxide
(CO2), the principal contributor to man-made climate change.
In other words, leaks during the
production, distribution, and use of natural gas could undermine the greenhouse
gas advantage combusted natural gas has over coal and spell major trouble for
Methane leakage study
The good news
is that leaks can be detected, measured – and reduced. EDF is currently
collaborating with industry and academic partners on a series of five
scientific studies to measure methane leakage rates across the natural gas
supply chain. Among our partners are the University of Texas (UT), Duke
University, Harvard University, Boston University and leading natural gas
companies. EDF aims to complete the entire study by December 2013.
The first study
, set for completion in
January 2013, seeks to estimate the methane emission rates from participating
companies’ natural gas production by conducting direct measurement techniques
at a sample of natural gas production sites. It brings together EDF, UT
and nine of the nation’s leading natural gas producers: Anadarko Petroleum Corporation,
BG Group plc, Chevron Inc., Encana Oil & Gas (USA) Inc., Pioneer Natural
Resources Company, Shell, Southwestern Energy, Talisman Energy, USA, and XTO
Energy, an ExxonMobil subsidiary. Findings from the study could help guide how
companies, states and the federal government measure, monitor and manage
Methane leakage paper
The paper illustrates the importance of accounting for methane
leakage across the value chain of natural gas (i.e. production,
processing and delivery) when considering fuel-switching scenarios from
gasoline, diesel fuel and coal to natural gas.
Key findings of the PNAS paper, based on the best available estimates on methane emissions from the EPA, include:
- Assuming the Environmental Protection Agency’s (EPA) 2009 leakage
rate of 2.4% (from well to city), new natural gas combined cycle power
plants reduce climate impacts compared to new coal plants; this case is
true as long as leakage remains under 3.2%.
- Assuming EPA’s estimates for leak rates, compressed natural gas
(CNG)-fueled vehicles are not a viable mitigation strategy for climate
change because of methane leakage from natural gas production, delivery
infrastructure and from the vehicles themselves. For light-duty CNG
cars to become a viable short-term climate strategy, methane leakage
would need to be kept below 1.6% of total natural gas produced
(approximately half the current amount for well to wheels – note
difference from well to city).
- Methane emissions would need to be cut by more than two-thirds to
immediately produce climate benefits in heavy duty natural gas-powered
- At current leakage rate estimates, converting a fleet of heavy duty
diesel vehicles to natural gas would result in nearly 300 years of
climate damage before any benefits were achieved.
Methane leakage model
Our economics team
has created a methane leakage model
based on the science in the PNAS
paper. The model explores the climate implications of reducing
emissions from natural gas systems in the context of a switch towards
natural gas-fueled technologies.
To use the model, enter a policy case of desired values for natural
gas leak rates and sector fuel mixes. Power plant efficiencies can also
be modified. The model outputs a graph and summary table of the impact
of that policy case on the climate. Results are represented as a
percentage change in net radiative forcing relative to 2010 U.S.
World Bank Sees Warning Sign in Gas Flaring Increase
July 3, 2012
WASHINGTON DC, July 3, 2012 — New data showing a two-billion
cubic meter increase in flared gas in 2011 over the previous year is a
warning that efforts to reduce flaring need to be sustained and even
scaled up, said officials with the World Bank-led Global Gas Flaring
Reduction partnership (GGFR).
The slight increase in flaring from 138 billion cubic meters in 2010
to 140 bcm in 2011, revealed in latest satellite data, is due largely to
increased hydrocarbon production in Russia and shale oil and gas
operations in the US state of North Dakota. While not significant when
viewed against the longer-term 20% drop in flaring since 2005 — from 172
to 140 bcm — the new increase is a warning sign, World Bank officials
said. Gas flaring reductions since 2005 have cut greenhouse gas
emissions by a volume equivalent to that emitted by some 16 million
“The small increase underlines the importance for countries and
companies to sustain and even accelerate efforts to reduce flaring of
gas associated with oil production,” said Bent Svensson, manager of the GGFR partnership.
“It is a warning sign that major gains over the past few years could be
lost if oil-producing countries and companies don’t step up their
Overall, global flaring has increased by 2 bcm, from 138 bcm in 2010 to 140 bcm in 2011.
The USA, Russia, Kazakhstan, and Venezuela are the main contributors
to this increase. These countries need to step up their efforts in
associated gas utilization. The same applies to Iraq.
Most of the increased flaring in the USA comes from North Dakota,
where there has been an important increase in activity related to shale
oil and gas production.
Russia still tops the world's flaring countries, followed by Nigeria,
Iran and Iraq. The USA is now the fifth flaring country in the world,
with some 7.1 bcm of gas flared in 2011.
Latest satellite estimates also show some continuous progress in
flaring reduction in Nigeria, Algeria, Mexico and Qatar. These
countries need to sustain their flaring reduction and gas utilization
“By reducing gas flaring, oil-producing countries and companies are improving energy efficiency and mitigating climate change,” said S. Vijay Iyer, Director of the World Bank’s Sustainable Energy Department. “Instead
of wasting this valuable resource, we now need to develop gas markets
and infrastructure so the associated gas can be utilized to generate
electricity and cleaner cooking fuels.”
Inconsistent data and often under-reporting of gas flaring by
governments and companies has complicated the global effort to track
progress on flaring reduction. GGFR’s cooperation with the US National
Oceanic and Atmospheric Administration (NOAA) to use satellite data aims
to improve the reliability and consistency of global gas flaring data.
This has now resulted in more consistent national and global estimates
of gas flaring volumes from 1995 through to 2011.
The GGFR, a public-private initiative of some 30 major oil-producing
countries and companies, aims to overcome the challenges for the
utilization of associated gas, including lack of regulations and markets
for associated gas utilization. GGFR partners’ main objective is to
reduce the environmental impact of gas flaring, as well as the waste of a
valuable energy source.
Global gas flaring, estimated in 2011 at 140 billion cubic meters
(bcm), also accounts for some 360 million tons of greenhouse gas
emissions. Eliminating these annual emissions is equivalent to taking
some 70 million cars off the road.
Note to Editors:
The GGFR partners include: Algeria (Sonatrach), Angola (Sonangol),
Azerbaijan (SOCAR), Cameroon (SNH), France, Gabon, Indonesia, Iraq,
Kazakhstan, Khanty-Mansiysk (Russia), Kuwait Oil Corporation,
Mexico (SENER), Nigeria, Norway, Republic of Congo, Qatar, the United
States (DOE), Uzbekistan; BP, Chevron, ConocoPhillips, ENI, ExxonMobil,
Marathon Oil, Maersk Oil & Gas, Pemex, Qatar Petroleum, Shell,
Statoil, TOTAL; the European Union, the European Bank for Reconstruction
and Development (EBRD), the World Bank Group; Associated partner:
A carbon credit is a generic term representing the right to emit one tonne of carbon or carbon
dioxide equivalent (tCO2e).
According to the EPA, Global Anthropogenic Non CO Greenhouse Gas Emissions: 1990-2020
report, dated June 2006, oil and natural gas operations are a
significant source of global methane emissions, constituting
approximately 18 percent of total human-made methane emissions. The
report also indicates that in 2005, global oil and natural gas methane
emissions totaled approximately 82 billion cubic meters (Bcm), or 2,896
billion cubic feet (Bcf), equivalent to about 1,165 million tonnes
carbon dioxide equivalent (MtCOe). Based on an average
natural gas price of $4 (USD) per 28.3 Bcm (or $4 per thousand cubic
feet (Mcf)), this equates to approximately $11.6 billion (USD) worth of
gas lost. In addition, these emissions have an equivalent annual
greenhouse gas effect of adding more than 223 million passenger vehicles
to the roadways for one year. (Source: Greenhouse Gas Equivalencies Calculator).
Given these results and methane's role as both a potent greenhouse gas
and clean energy source, reducing these emissions can have significant
economic and environmental benefits.
A Clean Energy Standard (CES) would double the share of electricity from
clean energy sources to 80 percent by 2035 from a wide variety of clean
energy sources, including renewable energy sources like wind, solar,
biomass, and hydropower; nuclear power; efficient natural gas; and coal
with carbon capture utilization and sequestration. By creating a market
here at home for innovative clean energy technologies, we will unleash
the ingenuity of our entrepreneurs – and ensure that America leads the
world in clean energy.
One carbon credit (or carbon 'offset') is a closely regulated
certificate representing a reduction of one metric ton of carbon dioxide
being released into the atmosphere. In dollar terms, carbon credits
price per ton is about $5 to $40 U.S. Dollars, based on the type and verification of quality.
Are carbon credits the new global currency? Carbon Recovery believes a realistic financial approach to the marketing of Carbon Credits is already happening.
Mechanisms to Reduce Greenhouse Effect Emissions
reduce carbon and greenhouse gasses emissions thus mitigating global
warming, is Kyoto Protocol. Kyoto Protocol is an agreement between 170
countries which provide mechanisms to reduce greenhouse effect emissions
on an industrial scale by capping total emissions and letting the free
market assign a monetary value to any shortfall through trading.
If you are thinking of investing into the Carbon Credit Voluntary
(VERs) or Compliance (CERs) Market then the Carbon Credit Price Checker
can source you carbon credits and projects that will suit your financial needs.
The Carbon Credit Price Checker
will only recommend credits or projects that are regulated by the
UNFCCC with a full validity report and are of the highest
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Claim your free carbon trading guide book
Due to the market now worth 250 Billion in the 5 years it has been established, the carbon market is set to be worth a Trillion dollars inside the next 5 years. With this growth the city square mile has seen
a lot of companies formed and trading credits with no real idea of how
the market works and how to obtain a return for their clients or even
how to work out a company's carbon footprint.
Carbon credits and carbon markets are a component of national and
international attempts to mitigate the growth in concentrations of greenhouse gases
(GHGs). One carbon credit is equal to one ton of carbon dioxide, or in
some markets, carbon dioxide equivalent gases. Carbon trading is an
application of an emissions trading
approach. Greenhouse gas emissions are capped and then markets
are used to allocate the emissions among the group of regulated
sources. The goal is to allow market mechanisms to drive industrial and
commercial processes in the direction of low emissions or less carbon
intensive approaches than those used when there is no cost to emitting carbon dioxide
and other GHGs into the atmosphere. Since GHG mitigation projects generate credits, this approach can be used to finance carbon reduction schemes
between trading partners and around the world.
There are also many companies that sell carbon credits to commercial
and individual customers who are interested in lowering their carbon footprint
on a voluntary basis. These carbon offsetters
purchase the credits from an investment fund or a carbon development
company that has aggregated the credits from individual projects. The
quality of the credits is based in part on the validation process and
sophistication of the fund or development company that acted as the
sponsor to the carbon project
This is reflected in their price; voluntary units typically have less
value than the units sold through the rigorously validated Clean Development Mechanism
CARBON PRICING NEWS JUNE 2012