The energy industry is one of the main sources of anthropogenic emissions. According to IEA figures, the average methane intensity of natural gas is 11 grams of CH4 per cubic meter (equivalent to a leakage rate of 1.4% across the supply chain), while crude oil has an average intensity of 1kg of methane per barrel. However, these estimates are not based on actual measurements, and recent research suggests that the true scale of emissions from fossil fuel production may be significantly higher. 

The energy industry has a limited window to shape the narrative, and the urgency to act is greater than ever because data on methane levels is now publicly available on the ESA website. From a risk management perspective, the value of early action cannot be overstated. The reputational cost of large emissions is exponentially growing as investors, consumers, environmentalists and lawmakers subject “Big Oil” to ever tighter scrutiny. No company can afford to make the methane headlines. Operators must be quick on their feet in the event of a crisis, not only on the infrastructure they operate, but also on the full supply chain of the hydrocarbons they produce, trade, handle and sell.




Investors are increasingly focused on the environmental performance of the companies in their portfolio. Regulators and consumers are also likely to differentiate between energy producers, and this could potentially lead to a price discount based on the carbon intensity of each supplier. Companies that are proactive in the measurement, mitigation and disclosure of GHG emissions are likely to be rewarded by the market with a deeper investor base, a lower cost of capital, higher revenue and a higher share price.


Producers who are in the bottom deciles of the industry’s methane intensity curve are more likely to attract and retain talent, and better placed to engage with local communities and regulators.


Self-certification is likely to be met with a certain amount of scepticism. Instead, producers can benefit from the credibility associated with an independent 3rd party verify emissions from operated, non-operated and export assets, and benchmark them against other regions around the world.