Royal Dutch Shell (NYSE: RDS.A) announced on Sept. 17 plans to limit leaks of methane, a potent greenhouse gas, across its oil and gas operations as it tries to sharply curb carbon emissions.
Shell aims to maintain methane emissions below 0.2% of its total oil and gas production by 2025, the company said in a statement, joining BP (NYSE: BP), which last year set a similar goal. Exxon Mobil (NYSE: XOM) announced in May plans to reduce methane emissions by 15% by 2020.
Methane is released into the atmosphere mostly from the burning of excess gas, known as flaring, as well as through leaks in gas infrastructure such as wells, pumps and pipelines. The gas has a bigger greenhouse impact than CO2, even though the oil and gas industry produces less methane and the gas also has a shorter lifetime.
The methane target will be measured against a baseline leak rate, which is currently estimated at range from 0.01% to 0.8% across the company's oil and gas assets, it said.
The Anglo-Dutch company set out last year an ambitious plan to halve its carbon emissions by 2050, far exceeding rivals. Investors have called on the company to set binding targets to reach those goals.
Climate change and emissions, caused by burning fossil fuels, have moved to the forefront of discussions between energy companies and investors since the signing of the 2015 U.N.-backed Paris climate agreement that seeks to curb emissions to zero by the end of the century in order to limit global warming.
"The race to near-zero methane emissions is on," said Ben Ratner, director at Environmental Defense Fund, U.S-based non-profit climate advocacy. "Company leadership on methane does not stop with setting targets. Follow through with good data and transparency are vital."
Shell's methane emissions reached 123,000 tonnes last year, accounting for about 5% of its total greenhouse gas emissions, according to its website.
Recommended Reading
Exxon, Chevron Tapping Permian for Output Growth in ‘24
2024-02-02 - Exxon Mobil and Chevron plan to tap West Texas and New Mexico for oil and gas production growth in 2024, the U.S. majors reported in their latest earnings.
CEO: Coterra ‘Deeply Curious’ on M&A Amid E&P Consolidation Wave
2024-02-26 - Coterra Energy has yet to get in on the large-scale M&A wave sweeping across the Lower 48—but CEO Tom Jorden said Coterra is keeping an eye on acquisition opportunities.
Petrie Partners: A Small Wonder
2024-02-01 - Petrie Partners may not be the biggest or flashiest investment bank on the block, but after over two decades, its executives have been around the block more than most.
Private Equity: Seeking ‘Scottie Pippen’ Plays, If Not Another Michael Jordan
2024-01-25 - The Permian’s Tier 1 acreage opportunities for startup E&Ps are dwindling. Investors are beginning to look elsewhere.
Permian E&P Midway Energy Partners Secures Backing from Post Oak
2024-02-09 - Midway Energy Partners will look to acquire and exploit opportunities in the Permian Basin with backing from Post Oak Energy Capital.