Saudi Aramco leads fight against methane

Saudi Aramco spends a big proportion of its research and development budget on measures to counter the environmentally damaging effects of the oil and gas business. (Shutterstock)
Short Url
Updated 06 January 2020

Saudi Aramco leads fight against methane

  • Saudi company is more efficient in both current emissions and its targets for future reduction

DUBAI: Saudi Aramco has emerged as the most effective energy company in the world at mitigating emissions of the atmospheric pollutant methane from natural gas operations, according to consulting firm Thunder Said Energy.

A research survey put Aramco, the world’s biggest listed company, at the top of a table that included all the big energy groups. 

The Saudi company was about six times more efficient than US energy giants Exxon Mobil and Chevron, in both current emissions and targets for future reduction, as a proportion of its gas production.Equinor, the state energy company of environmentally conscious Norway, ranked second in the survey.

Thunder Said’s Rob West, an expert in energy economics, said that controlling methane emissions was a crucial aspect of the move to decarbonize global energy supplies, in which gas is playing an increasingly important role. Methane, a much more powerful greenhouse gas than carbon dioxide (CO2), is released in the gas production and transportation process.




Saudi Aramco became the world’s most valuable public company this year with a stock offering launch in December. (AP)

“Scaling up natural gas is the largest decarbonization opportunity on the planet. But this requires minimizing methane leaks. Exciting new technologies are emerging,” West said. Global gas demand will treble by 2050 as producers and consumers seek cleaner alternatives to coal and oil.

Aramco, the biggest oil exporter, has huge quantities of natural gas, which it has identified as a key area of expansion for domestic supply and export in the form of liquified natural gas. “We basically look at natural gas as an area for growth for the company,” Khalid Al-Dabbagh, Aramco’s chief financial officer, said in an investor call in the run-up to its successful IPO this year.

Aramco spends a big proportion of its research and development budget on measures to counter the environmentally damaging effects of the oil and gas business, including advanced technology to reduce pollutants in energy products.

Although most environmentalists have focused their attention on CO2 as the main contributor to global warming, and hence to damaging climate change, some experts regard methane as a far more serious threat.

There is far more CO2 in the atmosphere, but methane is up to 120 times more powerful as a warming agent and takes longer to leave Earth’s atmosphere. “Methane accounts for around 25 to 30 percent of all the warming occurring on the planet,” West said, while around a quarter comes from fossil fuel production.

“Mitigating methane emissions is becoming crucial for tackling net emissions.” 

While methane leaks at all stages of the natural gas production process, almost half is emitted during the upstream phase. Sensors, drones and even satellites are being increasingly used to detect these emissions. Aramco stopped “flaring” gas years ago.

“The world will need superior methods to mitigate methane. In the developed world, this will be necessary for operators wishing to demonstrate low carbon credentials, and preserve their access to customers and capital markets,” West said. “The other way for investors to lower methane emissions may be to favor companies with low methane emissions and targets to improve.”

Decoder

Methane

A much more powerful greenhouse gas than carbon dioxide (CO2), methane is released in the gas production and transportation process.


Big oil feels the heat on climate as industry leader promises: ‘We will be different’

Updated 22 January 2020

Big oil feels the heat on climate as industry leader promises: ‘We will be different’

  • Trump singles out ‘prophets of doom’ for attack
  • Greenpeace told the Davos gathering that the world’s largest banks, funds and insurance companies had invested $1.4 trillion in fossil fuel companies since the Paris climate deal

LONDON: Teenage environmental activist Greta Thunberg slammed inaction over climate change as the global oil industry found itself under intense scrutiny on the opening day of the World Economic Forum in Davos.

The teenage campaigner went head to head with US President Donald Trump, who dismissed climate “prophets of doom” in his speech.
She in turn shrugged off the US president’s pledge to join the economic forum’s initiative to plant 1 trillion trees to help capture carbon dioxide.
“Planting trees is good, of course, but it’s nowhere near enough,” Thunberg said. “It cannot replace mitigation. We need to start listening to the science and treat this crisis with the importance it deserves,” the 17-year-old said.
The 50th meeting of the World Economic Forum was dominated by the global threat posed by climate change and the carbon economy.
The environmental focus of Davos 2020 caps a year when carbon emissions from fossil fuels hit a record high, and the devastating effects of bushfires in Australia and other climate disasters dominated the news.
Oil company executives from the Gulf and elsewhere are in the spotlight at this year’s Davos meeting as they come under increased pressure to demonstrate how they are reducing their carbon footprint.
“We are not only fighting for our industry’s life but fighting for people to understand the things that we are doing,” said Vicki Hollub, CEO of Occidental, the US-based oil giant with extensive oil operations in the Gulf. “As an industry when we could be different — we will be different.”

‘Planting trees is good, but nowhere near enough,’ activist Greta Thunberg told Davos. (Shutterstock)

She said the company was getting close to being able to sequester significant volumes of CO2 in the US Permian Basin, the heartland of the American shale oil industry which is increasingly in competition with the conventional oil producers of the Arabian Gulf.
“The Permian Basin has the capacity to store 150 gigatons of CO2. That would be 28 years of emissions in the US. That’s the prize for us and that’s the opportunity. People say if you’re sequestering in an oil reservoir then you are producing more oil, but the reality is that it takes more CO2 to inject into a reservoir than the barrel of oil that it makes come out,” Hollub said.
The challenge Occidental and other oil companies face is to make investors understand what is happening in this area of carbon sequesteration, she added.
The investment community at Davos is also looking hard at the oil industry in the face of mounting investor concerns.
Greenpeace told the Davos gathering that the world’s largest banks, funds and insurance companies had invested $1.4 trillion in fossil fuel companies since the Paris climate deal. It accused some of these groups of failing to live up to the World Economic Forum goal of “improving the state of the world.”