Capterio discusses role of gas and decarbonisation at Energy Week

Our CEO, Dr Mark Davis, joined a panel at the Energy Industry’s flagship conference in London. The panel was chaired by Ieda Gomes (OIES), with other panelists Monica de Virgilis (Snam), Yulan Li (President IGU) and Jonathan Burgess (Conoco Phillips).

All panelists talked about the important role of gas to support economic growth, decarbonise (through substitution of coal, oil or diesel in powergen), provide flexibility for renewables (until batteries/storage, interconnectors, or demand side management scale) – plus a potential longer-term role (as either gas or H2) when fully abated through CCS.

Mark discussed the criticality of reducing waste from flaring, venting and leaking (raised in the first couple of minutes of the first speaker at the conference, Professor Jim Skea (IPCC chair) and has been referenced by colleagues from Libya’s NOC, Petronas and ADNOC).

Indeed, reducing flaring, venting and leaking is an urgent challenge. It’s also a triple win – for operators, for governments, and for the planet. Fixing flaring addresses the cost of living crisis, the energy security crisis and the climate crisis. Great to hear (yesterday) the commitment from the Chairman of Libya’s National Oil Company, Ferhat Bengdara, to reduce national flaring.

See below for a summary of Mark’s contribution.

About Capterio: We work with companies and governments to reduce gas flaring, create value, support economies, improve energy security and accelerate the energy transition. We do this with (1) world-class analytics of flaring with FlareIntel Pro (every asset, every company, every country, every day), (2) advisory work (e.g. to create gas flaring reduction roadmaps) and insights, and (3) project development (identifying and developing attractive commercial opportunities to monetise gas).

The main points of Mark’s speech are in the bullets below, and some of the key supporting charts that were alluded to are below.

  • Gas has a credible and important role in the Energy Transition (to substitute higher-carbon, to provide flexibility – and in end state, when abated)
  • But we have to address it’s Achilles heel – the 7% of waste (255 BCM) through flaring, venting and leaking. This is between 2.6 and 6.7 Gt of CO2e (depending on your GWP). It’s also $70 billion of lost revenue
  • The IEA has shown us that we cannot deliver net zero without solving gas flaring, venting and leaking, and Professor Skea showed us it is a quick-win lever
  • The very wide span of performance between leading and lagging countries on emissions intensity (over 100x!) creates a challenge, but also offers shows us what the best-practice (in Norway) is
  • And it really makes little sense for some of the largest gas producing fields to flare materially (e.g. 50 million scf/day) or for some of the most recent imports to Germany to be coming from assets with big scope 1 emissions
  • But let’s flip this around – solving gas flaring improves energy security, creates revenues/jobs, and accelerates the energy transition. It’s a market failure that Iraq (a big flarer) imports gas and power from Iran. It’s also not a secure supply (as Iran cut off 4 GW worth of gas to Iraq during January’s cold period, leaving Iraq in the lurch)
  • Our approach is to solve the market failure by bringing together assets, technologies and financing
  • Great to see this agenda being supported by the announcements at COP28 with the World Bank’s methane fund and the 52 signatories to the Oil and Gas Decarbonisation Charter (see our take of this exciting announcement)
  • But it’s not time to focus on action. This will need us to get data led, have committed leadership. But also to (1) unlock capital, (2) have support from IFI and MDB to help where the country risk is perceived to be too high, and (3) to accelerate maturation of bankable projects (since there is a dearth of finance-ready capture projects)
  • But the good news is that action should also be accelerate by the EU’s methane performance standard (if you export to the EU and flare/vent/leak then penalties will be due by 2030) and the EU’s financing support offer through it’s “You Collect, We Buy” scheme.
  • All to play for – let’s go! 

Do you agree? Email if you do – or if you don’t!

See also some useful links:

Below – a chart of the global numbers. Of the non-flaring related emissions, the IEA methane tracker estimates that 50% is from the gas supply chain.

Below a chart of the progress vs target on gas flaring:

Below is a chart showing the relative intensity of flaring, venting and leaking per boe:

To bring flaring to life, here are the gas flares tracked by Capterio’s proprietary FlareIntel Pro tool for North Africa:

There are nevertheless some good examples of progress by several operators. Here are some examples of gas capture projects from Egypt: