IEA report flags 5 levers to reduce emissions in a net zero scenario
The IEA’s report “Emissions from Oil and Gas Operations in Net Zero Transitions” out today rightly highlights 5 levers to reduce emissions that together deliver its Net Zero scenario.
The levers are (i) reduce methane, (ii) reduce non-emergency flaring, (iii) electrify operations, (iv) deploy CCUS, and (v) deploy low-carbon H2 in refineries. We agree – and are pleased that Capterio is cited in the report
Specifically, re flaring the IEA notes that “cutting methane and stopping flaring are among most readily-implementable and cost-effective measures available to reduce GHG“. The IEA Net-Zero scenario has 95% reduction in flaring by 2030, through an investment of $70 billion – but that 2/3 can be delivered at no net cost (meaning value is created from additional revenue capture).
Some of the key charts / insights are below – with a brief commentary from Capterio. We agree strongly with the IEA except in one area (we think the CO2-equivalent emissions are understated since the IEA uses a 100-year equivalence of methane to CO2 – whereas we use a 20 year – and this makes a big difference).
Insight #1: Substantial emissions reduction is possible – lowering emissions from 5.1 Gt CO2e today
Insight #2: methane and flaring are top levers – and flaring comes at no net cost. Some $600 billion spend is needed by 2030, but that’s less than $2 per barrel of oil-equivalent production.
Insight #3: there is a large range of emissions intensity for oil – and for gas. For oil it’s 105 kg per barrel and for gas 65 kg per boe. That’s 15% of all emissions, and a lot (given that oil is some 425 kg per barrel for scope 3 emissions).
Insight #4: methane and flaring have major potential to contribute.
Insight #6: flaring reduction is possible – but a MASSIVE step is needed, although there is some progress – see our report “Gas flaring shows modest improvement – but not in the countries that matter most“, but it’s tinkering at the margins vs what is needed. To be honest, achieving this is so far away that unless we see a dramatic change in performance – including very strong engagement from NOCs, it’s not likely to be delivered. COP28 is a key moment to accelerate the progress, and Capterio’s flaring solutions – including FlareIntel Pro – are pivotal here.
Insight #7: technologies do work – and mostly pay for themselves. Take a look – according to the IEA, with the possible exception of power generation, flare capture projects are negative on net cost per tonne. We have written extensively about the what and how – and where – of flare reduction. See our paper “Leadership on flaring in Egypt in run up to COP27” and “Celebrating successful flare capture projects“.