IEA urges focus on downstream methane emissions

The International Energy Agency (IEA) has called for greater attention to be paid to methane emissions that come from downstream facilities in the oil and gas industry, noting that most existing regulation is geared towards reducing upstream emissions.

Downstream methane emissions from refining, transmission, storage and distribution facilities are smaller than those from upstream operations. But they still came to 16mn metric tons, or 20% of the total last year. And in major importing countries like Japan and several EU countries, they can be responsible for as much as 80% of oil and gas sector methane emissions. 

Though addressing these downstream emissions can be challenging, the IEA still estimates that around 75% could be avoided using existing technologies. However, while this abatement is technically feasible, there are some shortcomings in policy, the Paris-based agency said.

Often there are different regulators for upstream and downstream operations, and the former focuses more on emissions while the latter is primarily responsible for gas markets, consumer prices and public safety. What is more, transmission operators sometimes do not own the gas they transport, which reduces the incentive to address emissions as they cannot sell the saved gas.

And while many jurisdictions have regulations in place to manage methane emissions from the oil and gas, most policies focus primarily on addressing upstream emissions. Mexico serves as a counter-example, as it has applied the traditional command-and-control policies for upstream emissions to downstream emissions. 

Performance-based regulations and economic instruments designed to encourage operators to reduce their emissions can also work in addressing downstream emissions, as is shown in Canada.

"Different policy approaches can push companies to act – be it through broadening regulations that already have well-established upstream applications, adapting existing safety and market regulations to address the climate change impacts of methane, or developing entirely new strategies that are tailored to the downstream segment," the IEA said.

"Whatever policy pathway is selected, downstream methane emissions should not be neglected," the agency continued. "While they have some challenges, they still offer a very cost-effective way for countries and industry to minimise overall emissions."