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EU should include ‘methane performance’ standard in emissions legislation: Shell

EU should include ‘methane performance’ standard in emissions legislation: Shell

London — The EU should include a “methane performance” standard in its upcoming legislative proposals to tackle the issue of methane emissions to ensure it only imports gas from countries with similar policies, a senior official from Shell said Feb. 24.

Speaking during IP Week, Shell’s head of integrated gas, Maarten Wetselaar, said Europe has a major role to play in helping reduce methane emissions from upstream activity.

“Europe needs to make sure it cleans up its own game so the EU can proudly say ‘Our own house is in order’,” Wetselaar said, referring to detecting and repairing methane leaks and putting limits on flaring in its own domestic industry.

“But then it needs to go further and put a performance standard in the legislation that is imposed on imported gas,” he said.

“So the EU can export these regulations and make sure it only buys gas from geographies that also adopt policies like those in the EU. If it gets these two things right, the EU can have a massive, decisive impact on methane in the industry and in the world.”

Methane is a much more potent greenhouse gas than carbon dioxide, with some estimates suggesting it is 84 times more potent than CO2 over a 20-year time frame.

The International Energy Agency last month said oil and gas operations worldwide emitted some 72 million mt of methane into the atmosphere in 2020, broadly equivalent to the total energy-related CO2 emissions from the entire EU.

The biggest emitters, the IEA said, were Russia, the US, Iran, and Turkmenistan.

EC strategy

The European Commission published a strategy last October aimed at curbing methane emissions and plans to bring forward legislative proposals over the course of 2021.

It plans to focus its initial legislative proposals on ‘low-cost’ initiatives for the energy sector such as methane emissions detection and repair, and the elimination of gas flaring.

But the strategy also includes plans for the EC to engage with producer countries on best practices for cutting methane emissions.

The EC said that if producing countries did not make significant commitments to cutting methane emissions, it would consider proposing legislation on targets, standards or other incentives to ensure lower emissions for fossil gas used in the EU.

“Europe’s role cannot be overstated in my view,” Wetselaar said. “It is a huge gas market, but it also imports about half of all the internationally traded gas in the world and that is why it is very important that the methane strategy has been published,” he said.

“Methane is a huge issue for the industry, but it can be resolved.”

Customer behavior

Wetselaar said there were increasing signs that gas buyers were also becoming more exacting over the methane performance of the gas they buy.

“As customers become more mindful of the gas they buy, that will drive improvement,” he said.

In November, France’s Engie halted talks over a potential long-term supply agreement with US LNG developer NextDecade amid pressure from the French government and environmentalist groups not to import LNG produced from shale gas.

Speaking on the same IP Week panel on Feb. 24, Mark Brownstein from the Environmental Defense Fund also said there were noticeable shifts in gas buying behavior.

“What we are starting to see is that customers for gas are beginning to ask important questions about where the gas is coming from and the environmental integrity with which it is being produced and shipped,” Brownstein said.

But, Wetselaar said, it was not enough just to rely on customer pressure and called for a return to direct regulation of methane emissions in the US.

Regulations were rolled back by the Trump administration but methane emissions regulations are set to be re-introduced under new US President Joe Biden.

Wetselaar called on the EU and US to cooperate in the regulatory space. “With this momentum in the US, what I would find most inspiring is if we can get the EU and the Biden administration to work together on this,” he said.

“If we can get this EU legislation and EU performance standards, if we can get a similar system in the US so we can declare equivalence between the two, [that] would really help the trade between the two in terms of LNG and would set an example for the world to follow,” he said.

“I think that opportunity is in our grasp in the coming years if we focus on it,” he said.

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