Australia and the United States, respectively the world’s second and third largest LNG producers, have agreed along with major natural gas buyers to reduce methane emissions and leaks across the export value chain.
The two major liquefied natural gas producers and representatives from the European Commission (EC), Japan and South Korea signed a joint statement Tuesday in Tokyo calling for the reduction of methane emissions by 30% by 2030 compared to 2020 levels. They also outlined the importance of reducing emissions from the LNG industry in order to reach goals set in the 2015 United Nations climate accord, aka the Paris Agreement.
While most of the provisions in the agreement involve promoting private businesses to participate in voluntary reporting and reduction programs, the signatories agreed to support the creation of an international approach for measuring and verifying emissions in the global natural gas supply chain.
“The United States resolved to encourage LNG producers and natural gas consumers in the United States to take ambitious action to reduce methane emissions throughout the natural gas supply chain, including production, distribution and consumption,” according to the joint statement.
The United States, Australia and the EC also resolved to support an LNG emissions abatement coalition created by Korea Gas Corp. and Jera Co. Inc, two of Asia’s largest natural gas buyers. The coalition would work to create industry methane mitigation initiatives by collecting information from LNG facilities.
The global energy industry accounted for 40% of the world’s methane emissions attributed to human activity last year, according to the latest methane tracker report from the International Energy Agency (IEA). Methane emissions from global natural gas activities have grown from 21.3 million tons (Mt) in 2000 to 36.7 Mt last year.
The IEA estimated around 260 Bcm of natural gas is lost each year from non-emergency flaring and leaks from pipelines or LNG facilities across the world each year.
As governments have sought to reduce greenhouse gas (GHG) emissions from their respective oil and gas industries, both producers and exporters have called for unified standards so buyers and sellers can better navigate climate policies.
In the United States, companies like midstreamer Williams have already been pushing for the industry to create more uniform and independent emissions verification programs in the absence of defined standards from federal regulators. Without a “common currency” for exporters and producers to trade in, companies have worried international buyers could pass on U.S. LNG.
In the meantime, Sempra Infrastructure and other companies have signed commitments with European buyers to procure natural gas with certified emissions. Other exporters, including NextDecade Corp., have attracted international buyers by touting electric drive liquefaction trains and possible integration with a carbon capture and storage project.
The statement was signed during an LNG Producer-Consumer Conference hosted in partnership with the IEA, where Japan was expected to push for more cooperation on energy security between major LNG producers and buyers.
The United States was represented by Ambassador to Japan Rahm Emanuel, who has also been organizing talks between Japanese officials and corporations around potential investment in the Alaska LNG export project.
