Oil and gas companies across the value chain are facing new pressures to manage and reduce methane emissions. Their ability to access premium markets and buyers, attract investors and avoid costly fees depends on developing a credible plan to measure and reduce methane emissions. At the very least, the industry’s regulatory outlook, its nongovernmental quasi-oversight, and its access to capital are changing in ways that make understanding the sometimes inconsistent emissions data vitally important to executives In today’s RBN blog, we explore the recent changes and growing external pressures around methane emissions.
In Part 1 In this blog series we discussed how operators can begin to address key environmental goals while protecting, even improving, their bottom line. We also explained why the push to reduce methane emissions is so important. Methane is a short-lived but very potent climate pollutant: 120 times more potent a greenhouse gas (GHG) than carbon dioxide (CO).2) instantly and 86 times more powerful over a 20-year time horizon. This means that, pound for pound, methane emissions can have a disproportionate short-term impact on meeting climate goals.
We’ll start this blog by breaking down the regulatory changes in the US and Canada. After building slowly over the past 15 years, regulatory change has accelerated since 2021 as both governments develop new policies to meet their commitments under the Paris Agreement and the Global Methane Commitment. These new and evolving federal regulations add a layer to the existing patchwork of federal and state/provincial regulations governing the oil and gas industry. What is different today, however, is that not only must a producer comply with these environmental regulations, but their environmental credibility can have a direct impact on their access to certain capital markets, customers and investors, raising the stakes beyond a simple regulatory hurdle to clear. . Currently, Canadian climate and GHG regulations are stricter than the US, but recent policy changes indicate that the US may not be far behind. In addition, upcoming regulatory changes in both countries require additional measurement protocols or push operators to better measure methane emissions.
