Data transparency and technology are reshaping the oil and gas industry, as international petroleum operators are embracing methane regulation and innovation to capture global market share.
Turning Oil and Gas Emissions Data into International Market Opportunities Adhering to OGMP 2.0 Standards
Beyond meeting international regulatory requirements, establishing a transparent, measurement-informed GHG data platform can help oil and gas operators improve profits and increase international opportunities to commercialize gas.
Currently, several factors are coalescing, setting the stage for operators to adopt methane best practices. These include voluntary and mandatory frameworks and technology innovations. Market forces—including growing domestic and international demands for LNG —are encouraging companies to build a business case for GHG targets. Meeting the Oil and Gas Methane Partnership (OGMP) 2.0 Gold Standard is no longer just a target for early adopters.
Most international operators recognize that meeting methane regulations is good for business. According to a 2024 Boston Consulting Group (BCG)1 survey, many climate leaders have gained significant value from their decarbonization efforts, including financial benefits equal to more than 7% of their revenues—for an average yearly net benefit of $200 million. The survey reflects decarbonization delivers tangible advantages. These include lower operating costs, taxation benefits, higher valuations, and increased revenues. The intangible benefits include enhanced reputational value, supply chain resilience, and top talent attraction. The report says companies calculating carbon footprint at the product level are four times more likely to see significant decarbonization benefits. Further, more than half of the companies surveyed reported they believed their emissions could be reduced by 10% to 40% at a net cost saving. Companies measuring Scope 1-3 emissions comprehensively are 1.6 times more likely to experience significant decarbonization benefits. 25% of the businesses in the survey reported substantial financial benefits from decarbonization. One of the leading sources of these benefits was operating cost reduction, often resulting from initiatives focused on efficiency, waste reduction, rationalizing materials or footprints, or using renewable energy.
A “carrot and stick” model is helping define the commercial justification for emissions management and is shaping the near-term global oil and gas landscape.
Attractive market factors—the carrots—are closing the gaps between sustainability, finance, and the C-suite like never before. These factors highlight the potential upsides of differentiated gas margins, increased operational efficiencies, and potential international opportunities. Some of the market forces acting as a “stick” include regulations, importer carbon fees, potential “super emitter” fees or waste emission charges, reputational risks, and buyers’ supply chain transparency demands. The industry faces increasing regulatory hurdles with new North American and European Union policies, imposing stricter emissions limits while incentivizing methane reduction technologies.
The Global Push for Methane Reduction
Accelerating international cooperation and the introduction of effective frameworks and measures to achieve significant methane emission reduction in the fossil fuel sector are supporting global climate change reduction goals.
These include:
Oil and Gas Methane Partnership (OGMP) Commitment With over 159 signatories and 116 member companies representing a significant portion of global oil and gas production across 68 countries, OGMP 2.0 is now a benchmark for industry transparency and accountability. Companies engaged with OGMP 2.0 commit to delivering comprehensive and granular methane emissions data, ensuring compliance with increasingly stringent global regulations.
Global Methane Pledge Impact The Global Methane Pledge, launched during COP26, now includes over 150 countries committed to reducing global methane emissions by 30% by 2030, relative to 2020 levels. This ambitious target highlights the growing recognition of methane’s climate impact, and signatory nations are expected to enforce methane-reduction initiatives across industries, including oil and gas.
Regulatory Drivers Shaping the Future Include:
U.S. Waste Emissions Charge Under the Inflation Reduction Act, the U.S. methane emissions charge starts at $900 per metric ton in 2024 and rising to $1,500 per metric ton by 2026. This mechanism is designed to incentivize reductions by penalizing "super emitters" and driving investments in emissions monitoring and abatement technologies.
European Union Methane Regulation The EU Methane Regulation mandates direct measurement and reporting of methane emissions across the energy sector, alongside leak detection and repair (LDAR) obligations. This regulation aligns with the EU’s broader climate goals and supports its role as a major importer demanding supply chain transparency.
Carbon Border Adjustment Mechanism (CBAM) CBAM, due to be gradually implemented in 2026, imposes tariffs on imports from countries with less stringent carbon policies. For oil and gas companies, this means methane-intensive operations could face higher costs unless emissions are rigorously measured and reduced. Countries spending to cut carbon—namely in the European Union as well as the United Kingdom, Australia, and Canada—are formulating trading policies to deter commerce with companies with higher emissions.
Technology-Driven Solutions for Competitive Advantage
Regarding emissions reduction and regulatory compliance, embracing advanced technologies can no longer be optional. Advanced measurement-informed inventory methods, including OGI cameras, drone-based surveys, and real-time IoT sensors, are helping operators identify and address emissions hotspots efficiently and establish effective maintenance programs. Integrating these technologies into data analytics platforms like Envana Catalyst empowers companies to streamline compliance, enhance operational efficiency, and demonstrate leadership in sustainability. In the words of Arvind Ravikumar, an assistant professor at the University of Texas at Austin who co-leads the Energy Emissions Modeling and Data Lab2, “Technologies have come a very long way. There's a whole ecosystem of industry catering to addressing methane emissions, and the technologies from 2016 have significantly improved and are now being routinely deployed across the country by many oil and gas operators, both big and small.” Ravikumar added that international buyers increasingly demand cleaner, climate-friendly oil and gas production.
“Technologies have come a very long way. There's a whole ecosystem of industry catering to addressing methane emissions, and the technologies from 2016 have significantly improved and are now being routinely deployed across the country by many oil and gas operators, both big and small.” - Arvind Ravikumar
Taking Proactive Steps
The momentum for methane reduction is undeniable and unstoppable, and the stakes have never been higher. Oil and gas companies must prioritize creating and implementing a methane roadmap to stay competitive in an evolving market. Envana Catalyst offers the tools and insights to:
Proactively meet and exceed voluntary and mandatory requirements, including OGMP 2.0, EU Methane 2024/1787, and CBAM.
Capture international market opportunities with differentiated gas and transparent supply chains.
Reduce operational expenses through advanced monitoring and emissions management.
Don’t wait until regulations catch up with your operations. Act now to secure your market share in the transition to a low-carbon future. Contact Envana today to start building your successful methane roadmap.
Download the "Prepare for the EU 2024/1787 Methane Rule and Carbon Border Adjustment Mechanism (CBAM)" eBook[1] AI and BCG BCG and Co2 AI Carbon Emissions Survey 2024; BCG Analysis. https://www.co2ai.com/carbon-survey-2024.
[2] Martinez, Alejandra. “Growing Oil Industry Support for Methane Reduction Rule Could Help It Survive Trump’s Return.” The Texas Tribune, December 16, 2024. https://www.texastribune.org/2024/12/16/texas-epa-methane-rule-oil-gas-public-comment/.
[3] Worland, Justin. "The Future of Climate Action Is Trade Policy." Time Magazine, November 21, 2024. https://time.com/7178427/climate-trade-policy-baku-cop29/?utm_source=roundup&utm_campaign=20230202