Page 5 - FSUOGM Week 25 2021

FSUOGM COMMENTARY FSUOGM

authorities are preparing regulation to force Final adoption by the European Parliament
these companies to do more. and the Council of Europe is anticipated next
year.
EU takes aim at methane Crucially for Gazprom, the EC is widely
The global climate debate has largely centred on expected to apply its methane rules to oil and
carbon dioxide emissions so far, but the focus is gas suppliers outside the EU borders. If it did not
now shifting towards methane as a key culprit do so, domestic companies would be at a com-
behind global temperature growth. A report petitive disadvantage. However, ensuring that
released by UNEP in early May concluded that companies outside Europe quantify their emis-
reducing how much methane escapes into the sions accurately will be a difficult undertaking.
atmosphere could achieve a more rapid impact This is why the EC is also counting on the use of
than continued mitigation of carbon dioxide satellites to identify large methane plumes when
emissions. What is more, UNEP said the biggest the companies themselves do not report them.
cuts could be achieved in the oil and gas indus- Gazprom has in the past boasted that its
try, even though it is responsible for less human- measured methane emissions are among the
caused methane emissions than agriculture. lowest in the gas industry – only 0.02% in pro-
The report is likely to push the climate change duction, 0.29% in transport and 0.03% in under-
conversation further in the direction of methane, ground storage. It has meanwhile accused US
and this will mean added pressure on gas compa- suppliers of having a much worse track record
nies to address the problem. on methane emissions.
In Europe, there is currently no dedicated But the latest incidents may sway European
policy in place to address energy sector meth- decision-makers more in favour of applying the
ane emissions. But the European Commission upcoming legislation to third-party suppliers
is due to publish a legislative proposal to reduce such as Russia. Furthermore, it may convince
emissions later this year. It intends to propose them that Gazprom cannot be trusted to esti-
“compulsory measurement, reporting and veri- mate its own emissions on the ground, and that
fication at a company level for all energy-related it is better to rely more on so-called top-down
methane emissions.” Companies will also be methods like satellites and planes to estimate
required to improve leak detection and repair how much methane is escaping from Russia’s
at hydrocarbon infrastructure, and look at ways pipelines. Top-down methods tend to result in
of eliminating routine venting of methane and higher estimates for emissions than on-site bot-
flaring across the supply chain. tom-up methods. ™

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