Shell announces methane emissions intensity target for oil and gas assets
Sep 17, 2018
Royal Dutch Shell plc (Shell) today announced a target to maintain methane emissions intensity below 0.2% by 2025. This target covers all oil and gas assets for which Shell is the operator.
“This methane target complements Shell’s ambition to cut the Net Carbon Footprint of our energy products by around half by 2050, which we announced in November 2017,” said Maarten Wetselaar, Shell’s Integrated Gas & New Energies Director. “It is a further demonstration of our continued focus on tackling greenhouse gas emissions. Such efforts are a critical part of Shell’s strategy to thrive during the global energy transition by providing more and cleaner energy.”
To maintain this methane target, Shell is implementing programmes, including using infrared cameras to scan for methane emissions, deploying advanced technology to repair leaks, and replacing high-bleed pneumatically-operated controllers with low emission alternatives.
Shell recognises that there remains uncertainty with measuring methane emissions. “This is an industry wide issue and we need to fix this fast,” said Mr Wetselaar. “We must get a much more accurate understanding of how much we are emitting.”
The target for methane – which has a higher impact on global warming than carbon dioxide when released into the atmosphere – will be measured against a baseline Shell leak rate, which is currently estimated to range from 0.01% to 0.8% across the company’s oil and gas assets.
“Methane is a potent greenhouse gas, but it has a relatively short lifetime in the atmosphere. That means reducing methane emissions brings immediate climate benefits, buying some time while we work out longer term solutions,” said Mark Radka, Head of UN Environment’s Energy and Climate Branch. “This commitment by Shell is encouraging in itself but also because of the signals it sends to the rest of the industry.”
Shell is involved in a broad range of initiatives focused on reducing the emissions intensity of methane throughout the full supply chain – from production to the final consumer. For example, in 2017, Shell brought together industry, international institutions, non-governmental organisations and academics to develop a set of Methane Guiding Principles, which focus on continually working to reduce emissions of methane throughout the gas industry and have now been signed by 16 companies.
Shell has been an active member of the World Bank-sponsored Global Gas Flaring Reduction partnership since 2002. As part of the partnership, the World Bank has developed the Zero Routine Flaring by 2030 initiative, which Shell signed in 2015. This encourages governments, companies and development organisations to work together to end flaring.
For more information regarding Shell’s ongoing work to reduce emissions of methane, read the Managing Methane Emissions section of our latest Sustainability Report.
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The intensity baseline and target are presented as percentage figures, which represent the estimated amount of methane emissions for Shell’s operated gas and oil assets as a percentage of the amount of the total gas and oil marketed. The methane emissions include those from fugitives, venting and incomplete combustion, for example in flares and turbines.
Currently, methane emissions are calculated using a combination of standard emission factors (established emissions rates per throughput or per piece of equipment) and actual measurement. Increasingly, Shell sites are measuring emissions with infrared cameras and other detection equipment. By 2025, all Shell operated assets will have implemented robust quantification methodologies.
In this announcement we may refer to “Shell’s Net Carbon Footprint”, which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell only controls its own emissions but, to support society in achieving the Paris Agreement goals, we aim to help and influence such suppliers and consumers to likewise lower their emissions. The use of the terminology “Shell’s Net Carbon Footprint” is for convenience only and not intended to suggest these emissions are those of Shell or its subsidiaries.
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this presentation “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Royal Dutch Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this announcement refer to entities over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations”, respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.
This announcement contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition’, ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s Form 20-F for the year ended December 31, 2017 (available at www.shell.com/investor and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this presentation and should be considered by the reader. Each forward-looking statement speaks only as of the date of this announcement, September 17, 2018. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this announcement.
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