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Houston expert: Moving the needle on methane emissions

Methane emissions are rising—about 25 percent in the past 20 years, and still going up— but they are difficult to measure and track. What can be done? Photo via Canva

Here’s the bad news. In 2019, methane (CH4) accounted for about 10 percent of all U.S. greenhouse gas emissions from human activities, such as those related to natural gas extraction and livestock farming. Methane doesn’t last as long in the atmosphere as carbon dioxide, but is more efficient at trapping radiation; over a 100-year period, the comparative impact of CH4 is 25 times greater than CO2. To put it another way, one metric ton of methane equals 84 metric tons of carbon dioxide (see chart). Finally, while methane emissions are rising—about 25 percent in the past 20 years, and still going up—they are difficult to measure and track.

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Source: McKinsey.com

And here’s the good news. Five industries—agriculture, oil and gas, coal mining, solid waste management, and wastewater—account for almost all of human-made methane emissions. There are practical things these industries can do, right now, at reasonable cost and using existing technologies, that could cut emissions by almost half (46 percent) in 2050. That said, it will be easier for some industries than for others. Take agriculture. Most of its emissions come from cows and sheep, which produce methane during digestion; in fact, animals account for more carbon dioxide equivalent (CO₂e) emissions than every country except China, according to a recent McKinsey report. Dealing with billions of animals, dispersed on farms small and large all over the world is, to put it mildly, complicated. Certain kinds of feed additives, for example, can reduce the formation of methane, cow by cow—but is expensive ($50 per tCO₂e and up). This add costs to farmers, without any economic benefits to them, and makes food more expensive. That’s a tough sell.

On the other hand, the energy industry accounts for 20 to 25 percent of methane emissions; its operations are fairly consolidated, and there are significant resources and expertise at hand. Plus, in many cases, there are genuine economic opportunities. For example, plugging methane leaks means less gas gets lost. Large volumes of methane emissions that are now treated as a waste could be recovered and sold as natural gas—something that is not always economic to do, but could be as gas prices rise or conditions change. According to the International Energy Agency (IEA), the industry flares approximately 90 Mt of methane per year, losing $12 billion to $19 billion in value. Over time, too, normal maintenance and upgrading strategies can also reduce emissions, for example, by replacing pumps with instrument air systems. There are many different ways to prevent losses in upstream production, including leak detection and repair, equipment electrification, and vapor recovery units.

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Source: McKinsey.com

In the short term, meaning over the next decade, the IEA says that these and other changes could reduce emissions 40 percent (at 2019 gas prices), while more than paying for themselves. In effect, there is low-hanging fruit out there. The full potential, according to McKinsey, is 75 percent fewer emissions by 2050, but to get there, things get more expensive, somewhere in the range of $20 per tCO₂e.

Naturally, oil and gas players are not eager to embrace added costs, and these will eventually be passed on to consumers. But the industry is looking at a future that is carbon-constrained in one way or another, either through a price on carbon, or regulation, or both. It might well be that addressing methane emissions provides a way to decarbonize its operations at reasonable cost. And while there is little brand equity to natural gas at the moment—no one shops for it by name—it is possible that in decades to come, companies that can show they are producing low- or zero-carbon gas might be able to command a price premium.

Much of the oil and gas industry doesn’t disagree with this analysis. The International Group of Liquefied Natural Gas Importers, a trade group, has made the case that “abating greenhouse gas emissions (from wellhead to terminal outlet), in particular fugitive methane emissions,” is important. On the oil side, the American Petroleum Institute, as part of its climate action plan, has called for the development of methane detection technologies, and reducing flaring to zero: “We support cost-effective policies and direct regulation that achieve methane emission reductions from new and existing sources across the supply chain.” And the Oil and Gas Climate Initiative, whose companies account for almost 30 percent of global production, are also on board, calling the reduction of methane emissions to near zero “a top priority.” Back in 2017, the Houston Chronicle, the home paper of the Texas oil and gas industry, argued for better practices: “If Texas wants the world to buy our LNG exports, a sign of environmental good faith would go a long way.” And in fact there has been progress: the OGCI estimates that methane emissions are have declined 33 percent from 2017-20.

On the whole, then, this looks like one area of climate policy where there is broad consensus. Methane matters. According to one science paper, dealing with it “could slow the global-mean rate of near-term decadal warming by around 30 percent.” Just the oil-and-gas industry’s share, then, could make a measurable difference. I am not saying getting methane emissions way down will be easy, but the industry knows what to do and how to do it. It is in its interest, and that of the planet, to do so.

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Scott Nyquist is a senior advisor at McKinsey & Company and vice chairman, Houston Energy Transition Initiative of the Greater Houston Partnership. The views expressed herein are Nyquist's own and not those of McKinsey & Company or of the Greater Houston Partnership. This article originally ran on LinkedIn on October 21, 2021.

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A View From HETI

Houston U.S. representatives and others from Texas are pushing the Trump administration to reinstate a portion of the $7 billion Biden-era Solar for All program, which aimed to help low-income families reduce their energy costs.. Photo via Pixabay

Eight Democratic members of the U.S. House from Texas, including two from Houston, are calling on the Trump administration to restore a nearly $250 million solar energy grant for Texas that’s being slashed by the U.S. Environmental Protection Agency (EPA).

In a letter to Lee Zeldin, head of the EPA, and Russell Vought, director of the federal Office of Management and Budget (OMB), the House members urged the two officials to reinstate the nearly $250 million grant, which was awarded to Texas under the $7 billion Biden-era Solar for All program. The Texas grant was designed to assist 28,000 low-income households in installing solar panels, aiming to reduce their energy bills.

“This administration has improperly withheld billions in congressionally appropriated funding that was intended to benefit everyday Americans,” the letter stated.

The letter claimed that numerous court rulings have determined the EPA cannot repeal already allocated funding.

“Congress made a commitment to families, small businesses, and communities across this country to lower their utility bills and reduce harmful pollution through investments in clean energy. The Solar for All program was part of that commitment, and the EPA’s actions to rescind this funding effectively undermine that congressional intent,” the House members wrote.

The six House members who signed the letter are:

  • U.S. Rep. Sylvia Garcia of Houston
  • U.S. Rep. Al Green of Houston
  • U.S. Rep. Greg Casar of Austin
  • U.S. Rep. Jasmine Crockett of Dallas
  • U.S. Rep. Lloyd Doggett of Austin
  • U.S. Rep. Julie Johnson of Dallas
  • U.S. Rep. Marc Veasey of Fort Worth

The nearly $250 million grant was awarded last year to the Harris County-led Texas Solar for All Coalition.

In a post on the X social media platform, Zeldin said the recently passed “One Big Beautiful Bill” killed the Greenhouse Gas Reduction Fund, which would have financed the $7 billion Solar for All program.

“The bottom line is this: EPA no longer has the statutory authority to administer the program or the appropriated funds to keep this boondoggle alive,” Zeldin said.

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