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The United States is now the world’s largest liquefied natural gas (LNG) exporter, but the rapid rise in exports is hard to reconcile with President Biden’s climate goals. Critics argue that U.S. LNG exports will “lock in” fossil fuel consumption and increase planet-warming methane emissions. To address these concerns, the Biden administration is working with other governments to reduce greenhouse gas emissions across global supply chains. This will require both scientific integrity and a shrewd understanding of gas markets.
In the run-up to the 28th UN Conference of the Parties (COP28) climate summit, investors and civil society groups are pressing the oil and gas industry to make rapid methane cuts. Most of the action will happen on the supply side. Emerging U.S. and EU methane rules will require companies to measure their emissions with satellites, aerial surveys, and other technologies, and to report those emissions in greater detail. Demand-side signals are also important. More than 150 countries have joined a global pledge to cut methane emissions by 30 percent, including some large gas-importing countries. To appeal to climate-conscious buyers, there is growing interest in creating a “differentiated” market that could identify and reward natural gas with lower emissions.
This type of market needs to be designed carefully, and carbon offsets present a cautionary tale. Emissions reductions from carbon offsets have been exaggerated due to poor monitoring, reporting, and verification rules. Without scientific and enforceable standards, a market for differentiated gas will struggle to gain broad support.
A strong framework for lower-emissions gas requires three key elements. The first is clear certification criteria. A global system should include transparent standards for emissions accounting, methods of estimating emissions across gas supply chains, and data quality indicators to evaluate accuracy. This is especially important because data can be patchy or unreliable at various points from production to delivery and in different parts of the world. To enable reliable comparisons of supply chain emissions—say between LNG exports from the United States, Qatar, and Australia to Japan—consistency and accuracy of data are essential.
A second key element is measurement, reporting, and verification of emissions at several levels of detail, from national to regional to asset level. This is no small task. Methane emissions sources vary widely, from large, intermittent events to small and steady leaks from tanks or pipelines. Measurement technologies also vary. Some tools like satellites enable frequent surveys of many sites, while others like specialized cameras identify individual leaks with greater accuracy but cannot be deployed frequently. Remote measurement technologies are already enabling independent assessments, so watchdogs can verify company-reported data. But policymakers need a way to integrate data from various sources and interpret data collected across space and time.
The third critical element is independent verification. Third-party assessments of emissions data are necessary to overcome potential conflicts of interest. At the most basic level, this could involve data evaluations to ensure quality control. A more robust system would involve independent audits, performance evaluations, and third-party measurements. Some of these efforts have already started, with the International Methane Emissions Observatory working to compare data patterns from sources and facilities around the world to identify anomalies. When collected and vetted, independent verification bodies should share this data with the public to boost transparency and allow for cross-country comparison.
To cut emissions from gas supply chains, the United States should help other countries to bolster their emissions measurement and reporting. Many countries with significant natural gas operations have few direct measurements of methane emissions and lack an equivalent to the U.S. Environmental Protection Agency’s greenhouse gas inventory. Another global pledge to reach near zero methane emissions will be fruitless without a common reporting framework.
Finally, this differentiated gas framework needs to be developed with cooperation from the oil and gas sector rather than in isolation. Many companies have invested heavily in methane detection and quantification and are already grappling with data interpretation. It is in their interest to establish clear standards for lower emissions gas. And ultimately, companies rather than governments sign supply contracts. For this framework to help reduce emissions from global gas, it is critical to discuss the pathways to marketplace adoption.
There are growing policy and market incentives to drive down emissions from global gas. Building a credible system to measure emissions across gas supply chains is within reach, but only if producers and consumers agree on the right principles and work together to fill gaps. The technical challenges are considerable, but reducing emissions from global gas will enable progress on the twin goals of energy security and climate action.
Ben Cahill is a senior fellow with the Energy Security and Climate Change Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Arvind Ravikumar is research associate professor at the University of Texas at Austin and codirector of the Energy Emissions Modeling and Data Lab and a senior associate (non-resident) with the Energy Security and Climate Change Program at CSIS.
