The past year saw victories, challenges, and new opportunities for the oil and gas industry and hopes for reducing methane emissions. In 2023, oil and gas production reached new highs while industry and governments continued efforts to slash methane emissions and reclaim orphaned wells.
Increased energy demands following slowdowns due to the COVID-19 pandemic and industry efficiencies led to record high production for the oil and gas industry. Yet at the same time, the industry continued its multi-year trend of decreased methane emissions in 2023. The Alberta Energy Regulator (AER) in Canada released data showing that producers reached their 2025 emissions reduction target in 2022. In the United States, the Environmental Protection Agency (EPA) data showed significant decreases in methane emissions between 2018 and 2022, with the Arkoma Basin reporting a 77 percent decrease in emissions during that span.
A large part of these decreases can be attributed to voluntary actions taken by oil and gas companies. Producers in Canada are spending more than required to clean up wells and repair pipelines and equipment. In the United States, oil and gas companies have been taking steps to cut flaring and eliminate other sources of emissions through The Environmental Partnership, a program aimed at environmentally responsible oil and gas production. In 2023, the American Petroleum Institute (API) released its Methane Action Plan, a set of guidelines for reducing methane emissions across the industry. At the COP28 climate meeting in December, 50 oil and gas companies from around the world signed a pledge to cut methane emissions by 2030.
The past year also saw major policy changes related to methane emissions in the United States and Canada. In early December the EPA announced new methane emissions regulations intended to reduce emissions by about 80 percent through 2038 that would ban routine flaring, require close monitoring of wells and equipment for leaks, and require independent monitoring using remote sensing techniques. Soon after, Canada announced similar rules aimed at reducing oil and gas methane emissions to at least 75 percent below 2012 levels by 2030.
Detecting and measuring methane emissions is critical to meeting reduction targets, and 2023 saw new advances in remote sensing and emissions characterization. The International Petroleum Industry Environmental Conservation Association (Ipieca), the International Association of Oil and Gas Producers (IOGP), and the Oil and Gas Climate Initiative (OGCI) released a report on detecting and quantifying methane emissions that included a tool for choosing appropriate monitoring technologies. Also in 2023, Ball Aerospace announced it was preparing a methane-monitoring satellite called MethaneSAT for launch in 2024. At the same time, an airborne version of MethaneSAT’s instruments known as MethaneAIR has been collecting emissions data from oil and gas production areas in the United States. Additionally, TotalEnergies announced in December that it has signed cooperation agreements with national oil and gas companies in Brazil, Azerbaijan, and Angola to detect and measure methane emissions using AUSEA, a drone-based sensor TotalEnergies developed.
Multiple states made notable progress in plugging orphan oil and gas wells in 2023. For example, Michigan plugged about 200 wells in 2023, thanks in part to funding from the U.S Department of the Interior (DOI). In July, DOI announced a new round of funding for orphan well mitigation totaling nearly $660 million. In December, the EPA and U.S. Department of Energy (DOE) announced a conditional commitment of $350 million in additional funding to 14 states for detecting and reducing oil and gas sector methane emissions.
New funding sources, cooperative agreements, and a changing regulatory environment will likely join an ever-changing market in affecting the direction of the oil and gas industry into 2024 and beyond. However, the ways these factors will play out in the coming year remains to be seen.
With what looks to be another tumultuous year on the horizon, one thing appears certain – the industry will continue to provide reliable energy while continuing to reduce emissions.
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