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“How Natural Gas Leakage Reduction Impacts Emissions”

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Ron Miller's picture
Principal, Reliant Energy Solutions LLC

Ron Miller is an energy industry expert creating value by analyzing assets, markets, and power usage to identify, monetize, and implement profitable energy and emission reduction projects. He is...

  • Member since 2020
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  • Aug 9, 2022

Over the last 2 years, there has been a push to discourage U.S. oil and gas production, while inviting oil production from other countries, (Saudi Arabia, Iran, and Venezuela). Is this the right decision from an environmental standpoint, ignoring the balance-of-payment and energy security issues? Can the oil and gas industry help with CO2e emissions?


When methane is emitted into the air, it has a high component of greenhouse gases (GHG), with 28 to 36 times the warming power of CO2, although with a much shorter lifetime in the atmosphere. We need to minimize methane releases at every opportunity as a fundamental emissions-reduction strategy.

While natural gas does generate emissions, it is cleaner than using heavy fuel oil, diesel, or coal for electricity generation. By making the U.S.-produced natural gas-for-coal fuel substitution, the U.S. has reduced its emissions by 970 million metric tons of CO2e each year from 2005-2020.

By using cleaner-burning natural gas while minimizing the methane leakage from gas production, we can make a difference in future global emissions.

Since the U.S. is the now the world’s leading producer of both oil and natural gas, this article will dive into the differences in emissions from various countries on the globe which produce oil and gas. There is also an opportunity to work with the oil and gas industry to impact global emissions by capturing fugitive oil and gas leakage.

Flaring is safer and better from a climate perspective than releasing the gas directly, as it converts methane to carbon dioxide, a much less potent GHG, but there is still a great deal of hydrocarbons that are wasted via the flare.

Emissions Statistics:

Oil and natural gas is a fungible commodity, produced in countries around the world with varying levels of environmental standards and GHG emissions. On a global scale, upstream emissions from oil and gas, those that occur in production, transportation, and refining vary greatly across sources of crude oil. The highest 10% of production in terms of GHG emissions has emissions more than 4 times those of the lowest 10%.

The U.S. average crude oil, at 89 kilograms (kg) of CO2e per barrel, has lower upstream emissions than the global average of 95 kgCO2e/ barrel. Although the difference is small, consider the huge volumes (>100 million barrels per day) of crude our globe now consumes each day, and this 6.3% savings in emissions is still important.

Indirect GHG emissions from oil and gas operations, including both carbon dioxide and methane emissions, today are around 5,200 million metric tons of CO2e per year. These emissions are of about 15% of the energy sector’s total GHG emissions.

Scope of the natural gas leakage problem for emissions:

Satellite data shows that reductions in gas flaring have plateaued over the last decade, with 144 billion cubic meters of associated gas flared in 2021. The 2022 Global Gas Flaring Tracker Report produced by the World Bank’s Global Gas Flaring Reduction Partnership (GGFR) finds that the top 10 flaring countries accounted for 75 percent of all gas flared.

In 2021, 144 billion cubic meters of gas was needlessly burnt in flares at upstream oil and gas facilities across the globe, resulting in approximately 400 million tons of carbon dioxide (CO2) equivalent emissions, of which 361 MMtCO2e was in the form of CO2 and 39 MMtCO2e was in the form of methane.

At a Henry Hub price of US$ 7, 144 billion cubic meters of gas flared equates to a loss via the flare of US$37.6 billion in 2021.

The top 10 flaring countries accounted for 75 percent of all gas flaring and 50 percent of global oil production in 2021. Seven of the top 10 flaring countries have held this position consistently for the last 10 years: Russia, Iraq, Iran, the United States, Venezuela, Algeria, and Nigeria. The remaining three; Mexico, Libya, and China, have shown significant flaring increases in recent years.

Reviewing Graph 1, the keys for emissions reduction is the Methane Intensity, which means concerned environmental citizens of the world should consider refraining from the purchase of oil and gas from Libya, Turkmenistan, Venezuela, Algeria, Iraq, Iran, and Russia in declining order.

Graph 1: Total Methane Emissions and Methane Intensity Of Production In Selected Oil and Gas Producers in 2020

Source: Reuters, 5 May 2022 Global Gas Flaring Tracker Report

A 2019 study by the U.S. Department of Energy (DOE) laid out Russia’s track record. It found that gas delivered by pipeline from Russia to Europe had 40 percent more global warming potential than LNG from the U.S. Gulf Coast across 20 years. Russian gas also has 20 percent more global warming potential than European coal, it found. And the DOE calculated that about 4 percent of the gas leaked when piped from Russian wells to European plants; that leak rate was 1 percent for gas from U.S. wells that is shipped to Europe.

Despite the pro-flaring actions of the anti-pipeline movement, the US oil and gas industry is highly efficient, losing less than 1% of the energy they produce to flaring. That's 40% less than the global average.

An estimated 400 million cubic feet per day (Mcf/d) of natural gas is flared in the Permian Basin due to a lack of natural gas pipelines that are capable of transporting the gas out of the region to the market. Based on data from the Texas Railroad Commission, in 2020 (Jan-Oct) 103,786,233 Mcf of natural gas (≈ 107,626 billion Btu) were flared in the state.

Call to action:

Which oil and gas producing countries have the strictest environmental regulations that force emissions to be minimized in the production and transport of hydrocarbons? Can these regulations be evaluated and made part of a global standard to lower emissions?

The U.S. needs to work with fossil fuel companies to find pathways for reduced emissions: 1) gas-for-coal substitution for power generation, 2) recovery of leaked natural gas for power generation, and 3) lower production/transport gas leakage. Hydrocarbon companies have a role to play in the energy transition as the key examples are: 1) hydrocarbon technology expertise in offshore oil platforms/off-shore wind turbines, and 2) geotechnical knowledge of the subsurface that can be applied to geothermal energy production and carbon storage.

The oil/gas industry is taking strides to reduce methane leaks with newer regulations and technology to detect and repair gas leakage with cooperation with five oil- and gas-producing states (California, Colorado, Ohio, Pennsylvania, and Wyoming).

As U.S. natural gas prices have climbed recently (Henry Hub price above US$ 8 per million BTUs, more economic incentives exist to capture natural gas leakage for sale at a much higher-than-recent past historical price. Additionally, much higher prices on the world market for LNG provide even more incentive to capture leaked or flared natural gas for resale.

The important point here is the global emphasis on reducing CO2e emissions by 400 million tons per annum, while recovering over 144 billion cubic meters of gas each year from the flare that can be used to satisfy world demand, all while saving 400 million tons of CO2e each year.

Countries and companies that can credibly demonstrate that they are taking action to reduce their indirect emissions could reasonably argue that these resources should be preferred over higher-emission options in a carbon-constrained world.

It is crucial for the oil and gas industry to be proactive in limiting, in all ways possible, the environmental impact of oil and gas supply, and for policy makers to recognize this is a pivotal element of overall global energy transition.

This raises the often-overlooked importance of integrating the de-carbonization of the oil and gas sector into wider climate initiatives and discussions.

Ending routine flaring at oil production sites is vital, and could be one of the most cost-effective to impact global emissions. One possible use would be to direct excess/flared gas to electricity generators onsite to supply Bitcoin Mining energy demand.

Saving 144 billion cubic meters of gas from the flare, with 400 million tons CO2e foregone emissions, at a savings of US$37.6 billion each year yields a 10% rate of return project for a capital expenditure of $320 billion with a marginal abatement cost (MAC) of $0/ton of CO2e. What if the globe was willing to pay $100 per ton of CO2e to abate the emission, the project NPV economics then greatly improve.

Incenting this recovery of flared natural gas could be one of the very best alternatives the globe has to reduce overall CO2e emissions into the future.


  1. Allow gas pipeline and processing infrastructure to be built to increase gas transport capacity thus bringing currently-flared gas to markets.
  2. Drive governments to economically incent oil and gas companies to recover natural gas and oil leaks as a way of reducing global emissions.
  3. Recover more leaked or flared natural gas to allow more cleaner-burning natural gas to replace coal for power generation, which emits 40% more emissions than gas.
  4. Evaluate a price discount/tax for foreign oil and gas production sales whose origin country has a high emission intensity factor, to incent recovery of methane.
  5. Use the Marginal Cost of Abatement analysis to prioritize recovery of vented or flared methane in the U.S. to lower overall emissions as a cost-effective prioritization tool.

Copyright © August 2022 Ronald L. Miller All Rights Reserved

Julian Silk's picture
Julian Silk on Aug 10, 2022

Ron, I don't disagree with any of this, and obviously, ending flaring would be great.  But there is something missing in it.  Assuming that one does not want to use the pipeline system as the primary storage mechanism, is there some policy or some practice that would allow for storage on-site?  You would hold at least a reserve of gas for higher prices, or as an alternative for flaring, and this sort of buffer might ease some of the price swings.

Roger Arnold's picture
Roger Arnold on Aug 13, 2022

Unfortunately, there's currently no good way to store significant amounts of natural gas on-site. Ordinary pressure tanks can't hold enough to be useful. It could theoretically be stored as LNG, but the cryogenic cooling equipment needed to liquefy natural gas on a small scale would be prohibitively expensive. The tank insulation needed to keep the LNG from boiling off between tanker visits would also be a problem. There has long been interest in technologies for synthesizing liquid fuels from natural gas on a local scale, but so far nothing has worked out. Synthesis is certainly possible, but it requires large high throughput chemical plants to be economical. There's ongoing R&D however. I recall a recent announcement of a promising biochemical process that might be able to convert methane to methanol economically at ambient temperature, but it's pre-commercial.

Ron Miller's picture
Ron Miller on Aug 16, 2022

Roger, good thoughts. I think the Bitcoin power generation option with excess gas is one that is currently doable, but perhaps not the end-all technology/solution.

Mark Silverstone's picture
Mark Silverstone on Aug 12, 2022

«The oil/gas industry is taking strides to reduce methane leaks with newer regulations and technology to detect and repair gas leakage with cooperation with five oil- and gas-producing states (California, Colorado, Ohio, Pennsylvania, and Wyoming).»

Unfortunately, by far the two biggest methane emitting states are not included: Texas and North Dakota.  

Ron Miller's picture
Ron Miller on Aug 16, 2022

Mark, you are exactly right. With all the flaring the Permian Basin, a solution is needed for flaring reduction.

Julian Silk's picture
Julian Silk on Aug 17, 2022

I thank Ron Miller for the post, and thank Roger Arnold for trying to answer my question.  The latest on methane to methanol seems to be

As an idiot in these matters, I do wonder why it might not be efficient to have the fossil-fuel suppliers who are flaring the natural gas install natural-gas based fuel cells.  One example is


Ron Miller's picture
Thank Ron for the Post!
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