Nobody likes methane seepage. Especially Europe

Liquefied natural gas has always had a heroic reputation in the energy world. Heroic engineering, heroic logistics and heroic expense, yes – but a heroic outcome: clean (or not-so-dirty) energy and a seat with the good guys at the high table of energy transition.

Qatar of course, Egypt, Oman, Israel and the UAE – these are the lucky producers and exporters in this region. Algeria too – but that is piped gas. Iran and Iraq should be able to but can’t. 

Morocco and Kuwait yearn for something, anything gaseous, to power industry and homes, while Saudi Arabia late in the day has found gas at Jafurah but is keeping it for domestic use. Offshore Cyprus, Eni and TotalEnergies have to make a decision soon on how – or whether – to proceed on the Cronos project.

But something is disturbing the peace. LNG is typically about 85-95 percent methane. And methane, a colourless and odourless gas, as we know, is bad. Very bad. Methane is 80 times as potent as CO2 at trapping heat in the atmosphere in the first 20 years after it is released, according to the UN Environment Programme. It is responsible for more than 25 percent of the world’s warming since the industrial revolution. 25 percent? 30 percent? But a good deal.

When LNG is burned it emits carbon dioxide – the sin is in methane leakage.

Earlier this year even the US and China were able to set aside their differences and managed to agree on bilateral measures to cut methane seepage.

And, in 2030, five short years away, the 27 members of the European Union will require all LNG importers to account for all methane emissions. Over the summer the EU required importers to start monitoring, reporting and verifying (MRV) methane seepage.

By 2027, according to the lawyers, LNG importers must demonstrate that all supply contracts concluded or renewed after August this year are subject to these MRV measures.

And the regulations are not without merit.

Despite a Global Methane Pledge agreed at Glasgow’s Cop26 in 2021, emissions of the notoriously toxic gas are still rising. According to UN Environmental Programme (Unep) – in a release timed to coincide with the stuttering Cop29 underway in Baku, Azerbaijan – concentrations of methane in the atmosphere have risen “at record speed” over the past five years. Unep says that it has received 1,200 notifications of significant leaks over the past two years.

Yes, the environmental lobby’s credibility is tainted by its record on the nuclear power issue – which has left Europe exposed to the twin horsemen of Russia and economic decline – but the EU’s methane regulation is significant for Middle Eastern exporters.

As my colleague Eva Levesque has written, the EU wants to strengthen its energy security by cementing ties with the GCC. This is made all the more pressing by European states’ decision to cut dependence on Russian gas imports.

While the Gulf and other Arab states tend to send most of their LNG (and oil) exports into Asia, Europe is still a significant market. With reduced gas supplies from Russia – due to come to a complete stop only at the end of this year – Europe turned to LNG. It imported 15 million tonnes of gas from Qatar last year, nearly 20 percent of Qatar’s production.

And Qatar, as we know, has embarked on a plan nearly to double its LNG production from 77 million tonnes per year to 142 mpta by the end of 2030.

The EU, for all its ills, is also an institution that is a leader in environmental regulation. And China, a major LNG offtaker, is not a slouch when it comes to environmental concerns. Yes, the CCP builds coal fired power stations but the scale of its 30-60 strategy should not be underestimated.

Speaking at Cop29 in Baku earlier this week, Liu Zhenmin, China’s main climate negotiator, said that his country had been “relatively late” in its efforts to address methane emissions, the Financial Times reports. But Liu said that Beijing was now “actively looking” to do so and had engaged in “extensive efforts” over the past year in monitoring equipment, according to the FT.

No one is claiming that the region’s LNG exporters are frivolous or negligent. But when it comes to methane, importers are becoming more demanding. A lot more demanding.