Methane emissions reductions can be cost-effective, with industry leadership including supporting public policy.

Initial questions for engagement

  • What best management practices do you have in place and what percentage of your operations are controlled for emissions? How will this look in three years?
  • What specific steps are planned to reduce methane emissions next year?
  • What governance elements support holistic, rigorous methane management and how do you evaluate success?

Follow-up questions

  • If you have an LDAR program, what have been the biggest learnings in terms of emissions hot spots, and what plans are underway to prevent future emissions?
  • How is the reduction in methane emissions incentivized through compensation structures at the board, senior management and staff levels?
  • Is your company constructively participating in shaping regulations of methane in the U.S., Canada and Mexico (or, if applicable, other countries of operation)? Please explain.
  • Does methane fit into your overall GHG emissions management plan? How?
  • How prepared is the company for anticipated regulations? What impacts do you see coming from regulations concerning methane emissions?
  • What time frame are you using and what cost/benefit analysis are you doing to determine whether to invest in methane reduction technologies and practices? How are you incorporating other factors like risk reduction, social license to operate and worker safety into these decisions?
  • How could joining an industry voluntary initiative like OGMP help your company develop and adopt leading practices?
  • What efforts are being made by your board to consider the risk and opportunities of methane emissions?


Lowering emissions will help secure a role for natural gas in the transition to lower-carbon economies and prepare companies for coming regulations. Because reducing methane emissions often reduces co-emitted pollutants such as volatile organic compounds and hazardous air pollutants, emission reduction efforts can help address public health and regional air quality concerns which can improve a company’s social license to operate. There are also potential economic benefits of reducing emissions, with some reduction options providing a positive payback for operators (depending on the price of gas and market access). Without addressing methane emissions, the industry’s already scrutinized license to operate is further jeopardized.

Companies and investors can drive reductions in methane emissions by: 1) encouraging the broad adoption of proven best management practices and 2) supporting public policy.

Best management practices and technologies to reduce methane emissions
Fugitive Emissions (i.e. unintended leaks) Leak, Detection and Repair (LDAR) The process of finding and fixing Fugitive emissions (i.e. leaks). LDAR should be conducted at least quaterly on all assets using best available technology (i.e. wOGI infrared cameras). ICF International Found LDAR to be the single biggest opportunity to reduce methane emissions. Many firms offer leak detection as a service, eliminating capital cost for operators.
High-bleed pneumatic controllers and pneumatic pumps Low-bleed or intermittent pneumatic controllers/ zero emissions alternatives Pneumatics regulate process conditions and pump chemicals using the pressure of the gas which then “bleeds” (i.e. vents) into the atmosphere. Low or intermittent bleed emission valves vent less gas than highbleeds. Emissions- free alternatives such as solar electric pumps have zero emissions. Companies should always use low-bleed or intermittent pneumatics depending on which has lower emissions in a given situation and emissions-free alternatives where applicable. Companies should retrofit high-bleed pneumatics with lowering emitting options. Sites with access to electricity access can eliminate pneumatic emissions by replacing with alternatives such as instrument air pneumatics or electric actuators and pumps.
Storage Tanks Flares or Vapor Recovery Unit (VRU)

 • Flares burn off emissions from tanks. It is the cheapest option, but still emits carbon dioxide emissions from combustion, and can emit methane from incomplete combustion.

• VRU captures, compresses, and then directs emissions to a sales line. It is a higher cost, but results in no methane or carbon emissions.

All tank emissions should be controlled. Deployment of flares vs. VRU will depend on size of tank and potential for emissions. Flares and VRUs are only effective if properly designed and maintained. Operators should assure that tank control devices are adequately sized and frequently inspected to avoid issues such as unlit flares.
Liquids Unloading  Plunger Lifts Plunger lifts are designed to improve productivity on older wells with water build up that limits gas flow. While plunger lifts are one option used to remove water build up in wells, they also may limit emissions in the process compared to simply opening the well to atmospheric pressure to remove water. Smart automation of plunger lifts and artificial lifts can reduce emissions in cases where plunger lift-equipped wells have high emissions. 19
Centrifugal Compressor Vents Dry seal retrofit or vent gas capture

• Retrofit wet seal compressors with dry seals, which emit less emissions.

• Gas capture controls vented gas by re-routing it to the compressor intake line.

All compressors should be controlled to limit emissions. Both options have similar economics and reduction potential, so operator will likely choose which is most optimal given operating conditions.  

Methane emissions reductions can be cost-effective

Many studies have identified numerous costeffective and proven technologies to reduce emissions. Certain estimates show that the entire U.S. natural gas industry could reduce emissions by 40% for around $2 billion, less than 1% of total industry capex. Parallel studies have shown similar levels of reduction opportunities and results in Canada and Mexico.

Robust and comprehensive measurement is an important first step towards planning a reduction strategy. Companies that create and maintain a detailed inventory of their emissions will be better positioned to prioritize the largest and most costeffective reductions first, providing the biggest return in terms of reductions per dollar of capital deployed.

The table above summarizes some of the most effective best management practices that should be encouraged as a means for companies to meet reduction targets. For more details on these technologies and others, refer to ICF International’s report on the economics of emissions reductions. Best management practices are not an end in themselves, but merely a means to the end of reducing emissions. Results matter most. For this reason, adoption of best management practices (BMPs) should be coupled with robust measurements and transparent reporting that demonstrates a declining trend in emissions over time.

Climate and clean air coalition & oil and gas methane partnership

One way companies can learn, develop and share best practices is by joining industry initiatives like the Climate and Clean Air Coalition’s Oil and Gas Methane Partnership (OGMP), hosted by the United Nations Environment Program. The OGMP creates a global platform for companies to understand and systematically manage their methane emissions more fully. Current partner companies, including ENI, PEMEX, BP, PTT, Repsol, Total, Statoil and Southwestern Energy, represent about 10% of global gas production. The OGMP provides an international venue for participating companies to report on and lower emissions, as well as to share experience and knowledge. Participant companies decide which of their operations to include in the program and then establish the viability of control options for emissions sources.

Membership in this initiative is an indication that a company is taking a systematic approach to dealing with its emissions. Investors should encourage operators to join OGMP and recognize those already in the program while also encouraging them to extend its practices to all assets, both directly owned and in joint ventures.

In 2015, ministers of France, Germany, Italy, Japan, Republic of Korea, Netherlands, Poland, Singapore, Spain, United Kingdom, and the European Union acknowledged the role that reducing methane emissions plays in limiting near-term warming. The coalition encouraged all oil and gas companies headquartered or operating within their countries to join the Oil and Gas Methane Partnership.

Industry leadership on methane includes supporting public policy

Investors should encourage operators to play an active and supportive role in public policy development. Companies have a wealth of information on technology and operating practices they can share with policymakers to ensure rules are crafted in smart, cost-effective ways.

Data-driven policy that utilizes proven technologies and sets a floor for best practices will be an important part of the solution to reducing global methane emissions. While some in the oil and gas industry are taking robust steps on a voluntary basis, a majority of companies are exposed to disproportionate risk by not measuring, reporting and reducing their methane emissions. Some trade associations trade associations have impeded regulatory development, even filing lawsuits against the U.S. Environmental Protection Agency regulations that aim to reduce emissions by requiring twice-annual inspections for lost product. An individual company’s failure to manage methane responsibly can put the entire industry’s license to operate at risk. Effective public policy can ensure a level playing field for operators.

Performance assessment tool for reduce

 Best Management Practices

• Methane emissions rate slowing in growth towards a flat trend.

• Only partially controls sources of emissions. • Does not participate in OGMP or other voluntary initiatives, but uses OGMP technical guidance to develop methane management plans.

LDAR – frequency (f), scope (s) and methodology (m)

• (f) – Inspect assets, but less than once a year

•(s) – Inspect less than a third of assets annually

• (m) – Looks/listens for leaks and/or uses soap bubbles

• Methane emission rate is decreasing

• Substantially controls and adopts BMPs for new sources of emissions and retrofits some existing infrastructure.

• Participates in voluntary initiatives like OGMP but with less than 50% of company assets.

LDAR – frequency (f), scope (s) and methodology (m)

• f) – Inspect assets between once and twice a year

• (s) – Inspects between a third and less than 100% of assets annually

• (m) – Uses Method 21

• Methane emissions rate and absolute emissions significantly decreasing

• Substantial retrofits of existing assets with leading emissions reduction activities.

• Supports development and adoption of innovative technologies to reduce emissions.

• Requires joint venture partners to adopt best practices and operational policies on par or more stringent than their own.

• Participates in voluntary initiatives like OGMP with more than 75% of company assets. 

LDAR – frequency (f), scope (s) and methodology (m)

• (f) – Inspect assets 4 – 12 times a year

• (s) – Inspects virtually all assets with limited exceptions

• m) – Uses optical gas imaging (OGI) cameras


• Does not publicy oppose public policy or encourage trade associations to oppose policy.

 • Neutral on role of regulations to reduce emissions.

• Publicity articulates policy differences between company and any trade association memberships.

 • Publicy supports public policy to reduce emissions and share technical information with regulators to improve public policy.



Additional recommendations

How investors can engage on policy

Investors should support regulations that require industry to utilize proven and cost-effective technologies to manage methane emissions. While investors can engage with companies to reduce company-specific risks, only standards that apply to all actors can comprehensively address the industry-wide risk that natural gas faces from methane. Unless all operators work to reduce emissions, methane has the potential to undermine the environmental benefits of natural gas, with negative implications for long-term demand.

Investors can be supportive of policy in many ways, including meeting with regulators and government officials, providing comments on proposed rules, publishing op-eds, and signing on to investor statements of support.

In April of 2016, 76 global investors representing $3.6 trillion in assets under management signed a public letter supporting the March 2016 U.S.-Canada announcement where both countries committed to reduce methane emissions by 40-45% by 2025 and to adopt regulations to achieve this goal. The $3.6 trillion, which included $2.1 trillion from European investors, represented a more than ten-fold increase in investor support for methane action in less than two years. This support helped the U.S. Environmental Protection Agency strengthen a draft methane regulation in its final version.

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    An investor's guide to methane

    February 2017

An investor's guide to methane: Engaging with oil and gas companies to manage a rising risk