Change is coming, but is Europe’s natural gas industry ready?

Bryony nat gas conference

“At the moment methane is the crucial business challenge for the oil and gas industry – and anybody concerned with finding a sustainable place for natural gas needs to be taking it seriously,” said Baroness Bryony Worthington, Executive Director of Environmental Defense Fund Europe, on 6 Nov 2019. She was discussing natural gas development and Europe’s responsibility to eradicate climate-damaging methane emissions at the European Autumn Gas Conference in Paris.

In her keynote speech, “Getting Europe to Zero,” Worthington talked about the most effective ways for Europe to tackle emissions in its energy system today, while calling for decisive EU methane policy and industry leadership. “Today’s protestors may be asking for vague and impossible dreams but tomorrow they will be joined by policy advocates demanding specific targeted regulations,” she added. The conference was stopped by climate protesters following her talk, an illustration of her point that business as usual is over.

The full text of Bryony’s speech:

It’s my pleasure to be here today addressing this conference.

I have been active in the fight to combat the risk of climate change for over 20 years – back then it was a very fringe issue and few talked about it outside the scientific and NGO community. But here we are at one of Europe’s most prestigious energy conferences and it’s the central theme and I have the privilege of speaking to you about it in a keynote speech.

What’s changed?

Well at a very basic level the last 20 years have seen a huge release of greenhouse gas emissions. We’ve been adding a basket of 6 main climate-warming gases to our atmosphere at an ever increasing rate – and they’ve been accumulating there at higher and higher concentrations despite the planets best efforts to absorb them in our oceans and forests. 

We have now reached CO2 levels higher than any time we know of in the last 3 million years.

And the consequences of this vast global experiment are starting to become apparent.

Increased extreme weather events are occurring thick and fast – heatwaves, droughts, storms, wildfires, flooding. Scarcely a day goes past now without some new event. And then there’s the less talked about - but no less important impact of oceans becoming hotter and more acidic - decimating fragile ecosystems like our coral reefs.

When we talked of these things happening in the future, all those years ago, we had imagined they might become apparent at the very end of our lives or in during lives of our children – but we were wrong. 

The reason you see an increasingly panicked look in the eye of most climate scientists today is that our predictions were too optimistic – we’re doing more damage more quickly and humanity is now are deep in uncharted waters.

No wonder then, that as young people - who get their news directly from those same panicked scientists, unmediated by traditional news editors – are learning about what is going on, they are taking to the streets - demanding something urgent be done about it. And their ability to co-ordinate themselves in huge numbers across the globe has not gone unnoticed. The tactics of the climate protest movement may not be popular and the demands not very clear but they are having a noticeable impact in opinion polls and thus in the corridors of power.

There have of course been calls to action before and we have not being doing nothing for 20 years – I was at Friends of the Earth in the early 2000s when we started marching for new climate change laws in the UK – which lead to the passing into law of the climate change act – the world’s first legally binding plan to hugely reduce emissions over a 40+ year time period. 

And I’m pleased to say that the UK, like the rest of Europe, has been successfully reducing its ghg emissions – to the point now where we are v likely to deliver a 50-60% drop in 1990 levels by the end of the next decade.

How has this been possible?

Well, if we focus on carbon dioxide, then cuts to date have been down to a rapid reduction in the carbon intensity of the power sector – first as nuclear and then gas and replaced coal, and now as wind, solar and energy from waste are playing an increasing (and increasingly competitive) role.

As you know, the dash for gas has unquestionably resulted in cleaner air and reduced carbon dioxide emissions in Europe. And yet – increased gas use brings with it another problem – methane emissions.

Methane is around 80 times more effective at warming the planet that carbon dioxide over a 20 year time period. There may be less of it but while it’s here it’s far more damaging.

It’s estimated that around a quarter of the warming we’re experiencing today is due to manmade emissions of methane. Such is the extent of the problem that unless leaks of methane from all along the supply chain are kept as close to zero as possible the climate benefits of gas compared to coal can be seriously undermined.

Today the oil and gas industry is a close second to agriculture in terms of its contribution of methane emissions – some 75m tonnes a year are estimated to be escaping – but this is very likely to be an underestimate.

Over the last decade that the organization I now work for – Environmental Defense Fund – has uncovered numerous examples of underreporting of emissions

Using a range of cutting edge detection tools and sustained measurement campaigns, all along the supply chain we’ve found previously unreported methane emissions. For example, working closely with people in the industry, EDF organized sixteen independent scientific studies and that found that emissions from the US oil and gas sector were a full sixty percent higher than official government estimates.

And so – if the gas industry is feeling a little unloved at the moment, despite all that its delivered in terms of better air quality and lower carbon intensity of our economies – it’s because methane emissions cut right to the heart of the value proposition for gas.

Without a comprehensive solution to this aspect of gas’ environmental impact there are always going to be obstacles to expanding use even further - particular in new sectors such as transport - where electrification is also starting to take off.

The good news is addressing methane emissions is not rocket science and it needn’t be expensive. The International Energy Agency estimates that the industry can achieve a 75% reduction using technologies available today— two-thirds of that at no net cost.

I know some people will argue that oil and gas methane isn’t a European problem, because we’re producing less oil and gas here. And it’s true we’re not among the big producers. Far more important, however, is the GLOBAL footprint from our imports.

The European Union consumed 47 % of the world’s internationally traded gas in 2017, making this currently the single largest market for imported gas.

And as domestic production declines – increasing this market is being fed by imports – mostly from Russia, but also from Algeria, Qatar and a range of other countries including the US.

Together, the Russia and the US alone account for around a THIRD of global oil and gas methane.

And so – just as shutting down manufacturing and offshoring it to Asia results in ‘carbon leakage’ from Europe, increased use of imported gas from countries without strong environmental regulations, creates the same problem. 

Which brings me to policy.

The EU is increasingly under pressure from its citizens to eliminate our contribution of greenhouse gases to the atmosphere. We can expect within the first 100 days of this new commission a new law to be debated and hopefully passed that will commit Europe to net zero greenhouse gas emissions by 2050.

Obviously the achievement of this goal will be undermined if all that happens is that it adds costs to our economies and suck in imports from countries with laxer regimes. So linked to the concept of carbon neutrality is now the much more vocal discussion of border tax adjustments.

If we have Trump to thank for one thing it’s possibly that the huge taboo about using trade measures to achieve domestic goals is firmly back in the diplomats tool kit and there can be no better justification for their use that to drive action to solve the ultimate collective action problem – averting a climate catastrophe and humanitarian crisis.

More specifically on gas regulation - the current rules governing the EU gas market optimize for competition, market efficiency and consumer prices. But they do nothing at all to deliver on sustainability.  

Reform of the European Gas Framework is a significant opportunity to put climate at the core of EU energy policy. 

And we are calling on EU policy makers to set an ambitious goal to eliminate lifecycle methane emissions from all gas used in Europe.

That means all gas produced, imported and used in the EU – including emissions from imported gas, biogas, and emerging power-to-gas products.

But policy alone will not solve the methane problem if it is not properly monitored and enforced.

Which is why our science team is focused on improve the measurement and monitoring of methane emissions.

The good news is, technology is making regular leak detection is getting easier, faster, and cheaper – using everything from handheld monitors to drones and conventional aircraft.

And it’s becoming possible to monitor methane emissions from space – anywhere from the regional level on down to individual oil and gas facilities. For example, the TROPOMI instrument and Sentinel 5 satellite are already in orbit, monitoring global methane emissions.

And now, an Environmental Defense Fund subsidiary, MethaneSAT, is developing a new more powerful satellite that will provide weekly monitoring over 80 percent of the world’s oil and gas producing regions to help companies and countries find and fix big sources of emissions.

Data from MethaneSAT will be publicly available, so that anyone – regulators, investors, ordinary citizens – can see whether industry and its regulators are getting the job done.  

Increased capacity at a global level to monitor the problem may result in a new globally co-ordinated policy response. A first step towards this would be the creation of a publicly funded global monitoring facility that can conduct the kind of atmospheric detective work that’s necessary to get a handle on this issue.

At the moment methane is THE crucial business challenge for the oil and gas industry – and anybody concerned with finding a sustainable place for natural gas needs to be taking it seriously.

You will, however, not need reminding that there is and will be also the carbon dioxide challenge to worry about. It is clear that for natural gas to continue to play a central role in Europe’s energy future then a way of utilising gas without adding co2 to the atmosphere will quickly need to be commercialised.

In the 20 years I’ve been working on this issue there have been countless words spoken about the promise of carbon capture and storage to provide a solution to this problem.

And yet, even in places where waste products from industrial processes lead to almost pure CO2 emissions there has been next to no progress in capturing and storing them.

The time for vague promises and plans is now well and truly over.  In the next five years we need to see policies introduced that de-risk investment at scale and the first projects breaking ground and delivering results. Too much time has been lost.

Electrification and electricity derived ‘electro fuels’ are nipping at your heals in nearly all sectors – it’s time to get active lobbying for the regulations and incentives that are going to mean you can go on making money from gas without imperiling the planet.

If you do not then the slow erosion of the oil and gas sector’s social license that we’re witnessing, will certainly lead to the loss of market share and erosion of share holder value.

Today’s protestors may be asking for vague and impossible dreams but tomorrow they will be joined by policy advocates demanding specific targeted regulations. 

My advice is get out in front – ask for what you know you need in order to shift your own investments, without losing competitive advantage, and get cracking on some big zero emissions projects. There’s no shortage of capital out there – the challenge is to draw it into the real world, spending it wisely on an energy system fit for the 21st and 22nd century.

If get a move on I’m sure when we look back in 10 and 20 years time we’ll be able to say we did it.

Thank you. 

For more information, please Environmental Defense Fund Europe's policy brief: Limiting the climate impacts of the European Union’s gas supply.