Shell to Lay Out Targets to Manage Methane Emissions

By Anonymous

LONDON— Royal Dutch Shell RDS.A -0.37% PLC said it will announce plans to lay out targets to manage its emissions of the greenhouse gas methane Monday, joining a handful of major oil companies that have made similar pledges this year.

The British-Dutch oil giant said it will disclose objectives to bring down methane emissions related to oil and natural gas extraction and transportation. Methane is the main component of natural gas, but it often leaks into the atmosphere from wells, pipes, storage tanks and processing plants. Like carbon dioxide, it is a greenhouse gas that can contribute to atmospheric warming.

The company said it is aiming to limit methane emissions to less than 0.2% of the total natural gas extracted from any one project. Currently, Shell has no way of accurately measuring its so-called methane-emission intensity across the entire company, but for some projects it is as high as 0.8%, the company says.

The planned targets come even as the Trump administration moves to roll back Obama-era rules aimed at limiting methane leaks.

Shell’s head of gas, Maarten Wetselaar, said the company believes those limits should stay in place, though the U.S. regulation could be improved.

“Everybody should want their product to stay in the pipe and be sold to the customer rather than leak it,” Mr. Wetselaar said. “It’s essentially uncontroversial. Nobody in the industry should want to leak any methane.”

Exxon Mobil Corp. said in May it would cut its methane emissions by 15% by 2020 and cut flaring, or burning of natural gas, by 25%.

BP PLC made a similar commitment in April, pledging to keep its emissions flat out to 2025. Underpinning that goal is an aim to limit methane-emission intensity to 0.2%.

The Oil and Gas Climate Initiative, a network led by the chief executives of some of the world’s biggest oil-and-gas companies, has said it would announce methane targets by the end of the year. The group will hold its annual meeting in New York next week.

While carbon emissions have historically dominated climate discussions, methane has become a focus of concern in the industry in recent years. Big oil companies have positioned their natural gas businesses as a climate friendly alternative to coal and a way to show investors that they are prepared what many expect to be an energy-mix transition.

Shell has been outspoken about the value of natural gas as a “bridging” fuel—a cleaner-burning fossil fuel that can help bolster renewables like solar and wind energy when, for instance, the sun isn’t shining or the wind isn’t blowing.

The company’s long-term strategy is wedded to gas. In 2016, it spent roughly $50 billion to buy smaller rival BG Group, an acquisition that cemented Shell’s position as one of the world’s biggest liquefied natural gas players.

The move comes as investors are increasingly pressuring companies to not only disclose climate-related business risks, but also act to reduce emissions linked to global warming. Last year, a group of investors with roughly $30 trillion under management launched a five-year initiative to push the biggest corporate emitters to reduce emissions.

Write to Sarah Kent at [email protected]