WEBVTT - Methane's Big Moment 0:00:00.200 --> 0:00:03.040 Hi, I'm Dana Perkins and you're listening to Switch It 0:00:03.120 --> 0:00:06.960 on the BENF podcast. Today we talk about methane, the 0:00:07.000 --> 0:00:10.160 other greenhouse gas that maybe doesn't get as much attention 0:00:10.320 --> 0:00:13.920 as CEO two does, but certainly did this last week 0:00:14.040 --> 0:00:17.639 in Glasgow. Let's start with a few facts about methane. Well, 0:00:17.680 --> 0:00:19.479 first of all, it has a shorter half life than 0:00:19.520 --> 0:00:23.640 carbon dioxide, meaning that it's potency drops precipitously after about 0:00:23.720 --> 0:00:27.320 ten years as compared to the three hundred plus years 0:00:27.440 --> 0:00:31.320 for carbon dioxide. It also is an eighty times more 0:00:31.320 --> 0:00:35.040 potent greenhouse gas. So that is why the Global Methane Pledge, 0:00:35.360 --> 0:00:38.040 which was signed by over one hundred countries at cop 0:00:39.280 --> 0:00:42.240 is really so significant. This pledge is looking to cut 0:00:42.280 --> 0:00:46.800 methane emissions by thirty percent by the year. So today 0:00:46.920 --> 0:00:50.320 I speak with Antoine Wagner Jones, who covers Amia energy 0:00:50.320 --> 0:00:53.440 transitions at BENF, and Na cool Nair, who is in 0:00:53.520 --> 0:00:56.920 America's gas analyst, and they're going to speak about where 0:00:56.920 --> 0:00:59.600 the emissions come from, which countries are leading the charge 0:00:59.600 --> 0:01:02.600 on the plug edge, and how one goes about detecting 0:01:02.600 --> 0:01:06.000 methane emissions. To begin with, they wrote a piece recently 0:01:06.040 --> 0:01:09.480 titled Global d mechanization poised to give us l G 0:01:09.680 --> 0:01:12.160 an edge, and there's a good amount of coverage on 0:01:12.160 --> 0:01:15.240 the pledge on the COP twenty six Bloomberg blog. As 0:01:15.240 --> 0:01:18.600 a reminder, BIENNAP does not provide investment of strategy advice. 0:01:18.640 --> 0:01:20.520 And we've got a complete disclaimer at the end of 0:01:20.520 --> 0:01:24.160 the show. But now let's speak with Antoine and that 0:01:24.280 --> 0:01:33.600 cool Antoine and Nicole, let's talk about this as a 0:01:33.600 --> 0:01:36.920 greenhouse gas and why it is significant because I think 0:01:36.959 --> 0:01:41.880 that there has been historically so much conversation around carbon emissions, 0:01:41.959 --> 0:01:47.080 and very rightfully, but where is methane's role in the 0:01:47.160 --> 0:01:52.720 greenhouse gas world? So methane carbon working pretty different ways. 0:01:52.960 --> 0:01:54.600 I think one of the ways of looking at it 0:01:54.680 --> 0:01:57.160 is carbon sticks around in the atmosphere for a very 0:01:57.200 --> 0:02:01.360 long time. Methane is much also lived. It has a 0:02:01.440 --> 0:02:04.480 very short half life, but within that amount of time 0:02:04.560 --> 0:02:07.840 that it remains in the atmosphere, traps more than if 0:02:07.840 --> 0:02:11.799 we're looking over two decades from emission, it traps more 0:02:11.840 --> 0:02:14.640 than eighty times the heat that the same amount of 0:02:14.639 --> 0:02:16.919 carbon dark side would. So let's call this out. How 0:02:16.960 --> 0:02:18.600 long is a very long time? How long does c 0:02:18.680 --> 0:02:21.320 O two stay in the atmosphere hundreds and hundreds of years. 0:02:21.639 --> 0:02:24.320 And how long does meet things stay in the atmosphere, Well, 0:02:24.800 --> 0:02:26.679 it says it's half life is a lot shorter, and 0:02:26.919 --> 0:02:30.560 a lot of the effects dissipates dramatically after the first 0:02:30.600 --> 0:02:33.359 decade or so. Okay, so we're talking about roughly ten 0:02:33.440 --> 0:02:37.400 years if we're thinking about the worst impacts, which is 0:02:37.400 --> 0:02:41.400 particularly relevant right now as there are both short term 0:02:41.600 --> 0:02:45.800 and long term emission schools that countries are actively creating 0:02:45.840 --> 0:02:48.640 as we sit here recording during cop week. But back 0:02:48.639 --> 0:02:51.040 to the significance of me things, what is the scale 0:02:51.040 --> 0:02:53.679 of the problem in terms of how much is being 0:02:53.680 --> 0:02:58.960 admitted since you're just noting that it's eighty times eight 0:02:59.160 --> 0:03:02.720 times and greenhouse gas A good, great question. I think 0:03:03.200 --> 0:03:04.960 one of the things that's come out recently there's the 0:03:05.360 --> 0:03:08.239 Governmental Pound Climate Change to Report, the first of three 0:03:08.320 --> 0:03:11.200 this year that have been released, which basically sets out 0:03:11.240 --> 0:03:13.160 that about a quarter of all heat that's been trapped 0:03:13.160 --> 0:03:16.680 in the atmosphere since the pre industrial age is down 0:03:16.720 --> 0:03:19.680 to me thing and that makes it very important to tackle. 0:03:19.760 --> 0:03:21.880 And also levels of meeting and risen a lot more 0:03:22.240 --> 0:03:25.280 over the last two centuries than levels of CO two 0:03:25.880 --> 0:03:28.880 very much view it as sort of carbon dioxide naughty 0:03:29.000 --> 0:03:31.359 little brother, if you will, And I think a lot 0:03:31.400 --> 0:03:33.359 of focus at least in the last decade or so 0:03:33.520 --> 0:03:36.200 has been on the carbon dioxide and methane has been 0:03:36.240 --> 0:03:39.600 sort of been able to get away with nefariuff activities, 0:03:39.600 --> 0:03:42.280 if you will. In the meantime, in which industries is 0:03:42.320 --> 0:03:45.480 this coming from? I think technically the largest source of 0:03:45.520 --> 0:03:48.880 ME thing globally is the agricultural sector, but the one 0:03:48.920 --> 0:03:50.960 that's been under the most focus, and you know what 0:03:51.000 --> 0:03:54.040 we want to speak about today is oil and gas. 0:03:54.080 --> 0:03:57.000 So I've definitely heard of ME thing from cows and 0:03:57.000 --> 0:03:58.960 then a link to beef, and yes, that is a 0:03:59.000 --> 0:04:03.400 whole another conversation action regarding where it comes from also 0:04:03.440 --> 0:04:06.200 other parts of the agriculture sector as well. Correct, Yeah, 0:04:06.200 --> 0:04:10.480 exactly a cow's landfills. I guess landfills aren't really agriculture, 0:04:10.520 --> 0:04:13.560 but there are abroadly other sources other than oil and gas. 0:04:13.640 --> 0:04:15.720 Oil and gas gets a lot of the heat though. Okay, 0:04:15.760 --> 0:04:17.960 so oil and gas. The space that we at BNEF 0:04:18.080 --> 0:04:20.760 spend a good amount of time thinking about as we 0:04:20.800 --> 0:04:23.560 think about the energy transition and some of the opportunities 0:04:23.600 --> 0:04:26.160 that this industry has in terms to pivot their business 0:04:26.240 --> 0:04:30.040 and look at a potentially more sustainable future. Why are 0:04:30.040 --> 0:04:32.760 they at the center of the discussion around me thing? 0:04:33.520 --> 0:04:35.880 From my opinion, I think is really down to the 0:04:35.920 --> 0:04:38.240 fact that there has been the sort of clamp down 0:04:38.240 --> 0:04:41.719 from a climate perspective on oil and gas companies in 0:04:41.760 --> 0:04:44.640 the sector as a whole, and this mostly came from 0:04:44.640 --> 0:04:47.640 a common ox side perspective. But then to just sort 0:04:47.640 --> 0:04:51.039 of increase the scope and capture me thing within that 0:04:51.120 --> 0:04:54.480 clampdown I think was a fair and fairly easy at 0:04:54.520 --> 0:04:57.440 tension to to make and to be fair, when we 0:04:57.480 --> 0:04:59.400 talk about this in front of all and gas companies, 0:04:59.440 --> 0:05:02.640 they talked about what about the agriculture sector? So I 0:05:02.680 --> 0:05:05.320 think that this is a good opportunity for oil and 0:05:05.360 --> 0:05:08.120 gas to sort of get ahead of itself and sort 0:05:08.120 --> 0:05:11.320 of stepped benchmark, if you will. And it works very 0:05:11.320 --> 0:05:14.400 differently if we sort of compare and gas to waste 0:05:14.560 --> 0:05:17.960 and agriculture and natural sources of meeting I mean in 0:05:18.040 --> 0:05:21.039 terms of reducing them tackling those emissions, it's a lot 0:05:21.080 --> 0:05:24.520 more achievable at a low cost. The i as put 0:05:24.520 --> 0:05:27.760 out estimates for the percentage of oil and gas emissions 0:05:27.800 --> 0:05:32.279 that can be reduced at a net profit about it says, 0:05:32.320 --> 0:05:34.240 and then at low cost for many others because you 0:05:34.240 --> 0:05:36.560 can actually if you find an off taker market the 0:05:36.600 --> 0:05:39.159 gas that mean thing that you're capturing, which is effectively 0:05:39.240 --> 0:05:43.200 natural gas, and the technologies for actually making those reductions 0:05:43.200 --> 0:05:45.479 are broadly available today. So again there was a UN 0:05:45.560 --> 0:05:51.120 report that stated about forty of those oil and gas 0:05:51.120 --> 0:05:55.680 emissions can be basically cut out using technologies that are 0:05:55.720 --> 0:05:59.800 available today. It's not rocket science. It's sort of upgrading pipelines, 0:06:00.200 --> 0:06:05.240 um like valves and pipelines, compressor stations. It's simple stuff. Yeah, 0:06:05.360 --> 0:06:08.560 plugging empty wells pretty easy to do. So this is 0:06:08.720 --> 0:06:12.599 essentially leakage. This isn't causes an industrial bride product of 0:06:12.720 --> 0:06:16.760 creating things. This is waste. It's funny you say that 0:06:16.800 --> 0:06:19.880 data because I would actually describe it as sort of 0:06:20.160 --> 0:06:23.800 maybe not waste, but lost useful product because essentially natural 0:06:23.800 --> 0:06:27.359 gas is predominantly meeting and so if you can capture it, 0:06:27.400 --> 0:06:31.080 you can sell it and gain perhaps additional revenue that 0:06:31.160 --> 0:06:34.920 you're effectively just getting or letting loose into the atmosphere. 0:06:35.480 --> 0:06:37.800 In terms of leakage, I'd say most of it is 0:06:38.320 --> 0:06:41.599 accidental fugitive if you will, But a lot of times 0:06:41.600 --> 0:06:45.040 it is intentionally vented just because the infrastructure isn't set 0:06:45.080 --> 0:06:47.840 in place to capture it. And yes, so they're like 0:06:48.720 --> 0:06:52.240 losing value by doing it. So one would assume that 0:06:52.320 --> 0:06:54.760 incentives are aligned for the oil and gas industry to 0:06:54.839 --> 0:06:59.880 not want to lose this potentially sellable product. Why is 0:07:00.080 --> 0:07:03.920 is an important role for governments to play in trying 0:07:03.920 --> 0:07:08.400 to restrict or enforce the oil and gas industry to 0:07:08.560 --> 0:07:12.560 actually handle some of this leakage. Yes, I think a 0:07:12.640 --> 0:07:15.480 lot of the leakage and the reason behind it is 0:07:15.520 --> 0:07:19.680 that companies and operators don't actually know it's being released. 0:07:19.920 --> 0:07:23.280 It's an invisible gas. It seeps out of the upstream sector, 0:07:23.360 --> 0:07:26.520 maybe through a loose valve or compressor, and those emissions 0:07:26.520 --> 0:07:29.600 are broadly unknown to the operator and they don't want 0:07:29.640 --> 0:07:31.560 to go and to take the effort to sort of 0:07:31.560 --> 0:07:35.040 track that down and figure out how to reduce it. 0:07:35.280 --> 0:07:37.600 So really, I think, at least from a government perspective, 0:07:37.640 --> 0:07:41.000 it's more about putting pressure on the company's to actually 0:07:41.040 --> 0:07:44.000 start doing it, because it is definitely possible to do yeah, 0:07:44.080 --> 0:07:46.640 and it's that freshest built up for a number of reasons, 0:07:46.680 --> 0:07:50.040 and one part is just that we're better able to 0:07:50.080 --> 0:07:54.920 sort of monitor and verify large emission events using satellites. 0:07:55.320 --> 0:07:58.760 So satellite technology has progressed very rapidly over the last 0:07:59.240 --> 0:08:01.760 few decades, and we're now at a stage where using 0:08:01.800 --> 0:08:05.720 for example, the Copernica's satellite program that's run by the 0:08:05.720 --> 0:08:09.280 European Space Agency has been used by data providers to 0:08:09.360 --> 0:08:12.880 pick up sort of large emission events above five tons 0:08:12.920 --> 0:08:16.360 per hour, for example, and that gives you an idea 0:08:16.520 --> 0:08:19.840 of what's going on in places where geographically the conditions 0:08:19.840 --> 0:08:21.400 are aligned for you to be able to get good 0:08:21.400 --> 0:08:26.040 satellite data. And that recognition, along with efforts by n 0:08:26.040 --> 0:08:29.119 g O S and by other organizations and by oil 0:08:29.120 --> 0:08:33.040 and gas producers too, So basically measure emissions using other 0:08:33.520 --> 0:08:36.079 techniques closer to the ground, has given us a much 0:08:36.080 --> 0:08:39.079 more granular picture of emissions then we've had in the past. 0:08:39.120 --> 0:08:41.360 And that's also being really at the heart of our 0:08:41.400 --> 0:08:45.280 recognition of of me things being a problem and also 0:08:45.400 --> 0:08:48.960 the scale of the challenge involved in technic So there's 0:08:48.960 --> 0:08:51.480 technical monitoring that then leads us to a place where 0:08:51.520 --> 0:08:54.640 we can actually fix the problem, and then there's this 0:08:54.760 --> 0:08:57.480 shorter time horizon around a decade where we can actually 0:08:57.480 --> 0:09:00.880 see real tangible results in their being brought down. So 0:09:00.920 --> 0:09:02.719 this seems like this is an area where we can 0:09:02.760 --> 0:09:06.720 make some pretty dramatic progress when it comes to climate goals. 0:09:07.880 --> 0:09:09.960 Was that fair summary to say that that's why you 0:09:10.000 --> 0:09:12.280 think that this may have come up from a policy 0:09:12.320 --> 0:09:16.920 standpoint at least in the CUP conversations which are taking place. Yeah, 0:09:17.040 --> 0:09:19.719 I think that's fair. Cup. The number of issues that 0:09:19.800 --> 0:09:21.560 are on the table that are getting a lot of attention, 0:09:21.880 --> 0:09:24.040 that means that in terms of media attention, it's going 0:09:24.080 --> 0:09:26.679 to be issues like methane, which are more like side 0:09:26.679 --> 0:09:30.559 issues usually where we'll probably be seated seeing tangible progress. 0:09:30.840 --> 0:09:33.760 That's something to sort of follow carefully. Over the last 0:09:33.800 --> 0:09:36.320 few weeks, we've seen the US and the European Commission 0:09:36.360 --> 0:09:39.120 come together launched the Global Methane Pledge, trying to get 0:09:39.120 --> 0:09:43.960 countries to agree to cut methane emissions, and the diplomacy 0:09:44.000 --> 0:09:45.640 around that is going to be interesting to follow. We've 0:09:45.679 --> 0:09:48.600 already seen the European Commissions say that, well, we've seen 0:09:48.800 --> 0:09:52.600 spokespeople say that eight countries have signed the pledge. Will 0:09:52.600 --> 0:09:55.280 be seeing more details over the course of this week. 0:09:55.559 --> 0:09:59.120 So who are the countries that are leading the charge, 0:09:59.360 --> 0:10:02.920 one might say, on some of the enforcement around the 0:10:02.960 --> 0:10:06.880 Paris Agreement targets on meeting. So I'm based in the US, 0:10:06.920 --> 0:10:10.200 and I think effectively, over the past year or so, 0:10:11.040 --> 0:10:13.400 maybe a bit longer, the US has gone a full 0:10:13.480 --> 0:10:16.440 one e D and gone from what you could view 0:10:16.480 --> 0:10:19.000 as a bit of a lagguard to perhaps even so 0:10:19.040 --> 0:10:21.199 far as if I may go so far as to say, 0:10:21.240 --> 0:10:23.680 a bit of a leader on the topic. Where a 0:10:23.760 --> 0:10:27.959 year ago under the previous administration, we were revoking rules 0:10:28.040 --> 0:10:32.440 that have helped curb emissions along pipelines to now, you know, 0:10:32.480 --> 0:10:35.480 signing that Global Meeting pledge with the EU to really 0:10:35.559 --> 0:10:40.000 be a leader, a focal point, a um sort of 0:10:40.040 --> 0:10:42.480 someone the industry can look up to in terms of 0:10:43.000 --> 0:10:46.920 taking proactive action to reduce emissions. So there's some alignment 0:10:46.960 --> 0:10:50.520 here between the Eropean Union in the United States and 0:10:50.640 --> 0:10:54.280 trying to achieve the targets around meeting. What is the 0:10:54.320 --> 0:10:58.040 scale of the problem in these two parts of the world, 0:10:58.240 --> 0:11:02.640 and how do their emission really relate in terms of 0:11:02.679 --> 0:11:06.560 size and scope with other parts of the world. That's um, Yeah, 0:11:06.600 --> 0:11:09.760 it's a good question, and that the answer is that 0:11:09.800 --> 0:11:12.160 we don't know exactly. So the IA has come out 0:11:12.200 --> 0:11:16.320 with estimates for the largest source of emissions from the 0:11:16.320 --> 0:11:19.760 oil and gas sector across different geographies. Those involved assumptions. 0:11:19.840 --> 0:11:24.319 Those also involved using imperfect data. Although it's a very 0:11:24.360 --> 0:11:27.959 thorough assessment. We're still relying on satellites, for example, to 0:11:28.000 --> 0:11:30.599 give us an idea of what's going on in Russia. 0:11:30.720 --> 0:11:33.640 And that's tricky because satellites are good at picking up 0:11:34.120 --> 0:11:38.640 emissions when things are dry, when they're well lit, So 0:11:38.800 --> 0:11:41.320 the Permian Basin in Texas, for example, in the US 0:11:41.400 --> 0:11:44.160 is a perfect example of that. But they're much worse 0:11:44.200 --> 0:11:47.320 at doing it for places that are offshore, like production 0:11:47.360 --> 0:11:51.400 off the coast of Qatar, when they're equatorial so in 0:11:51.520 --> 0:11:56.120 Nigeria for example, or when they're in northern latitudes. So 0:11:56.640 --> 0:11:58.840 Russia is one of those countries. And that's because of 0:11:58.840 --> 0:12:02.760 the reflectivity of the surface of water. That makes things 0:12:02.760 --> 0:12:05.040 tricky in terms of getting a very good view on 0:12:05.600 --> 0:12:09.439 emissions around producing areas. That doesn't mean we can't track 0:12:09.800 --> 0:12:12.280 what's going on to some extent, but it does mean 0:12:12.280 --> 0:12:14.600 that it's difficult. Yeah, I don't know if you If 0:12:14.600 --> 0:12:17.360 you have that information, I'd love to love to fear 0:12:20.520 --> 0:12:22.880 I basically need to have satellite business because satellites of 0:12:22.960 --> 0:12:26.760 the future here, Yeah, exactly, Okay, So they're definitely challenges 0:12:26.800 --> 0:12:31.200 around monitoring and pinpointing where this is all coming from, 0:12:31.400 --> 0:12:34.040 maybe the US specifically, who's leading the charge on this 0:12:34.160 --> 0:12:37.000 in some respects, and what are some of the other 0:12:37.080 --> 0:12:42.280 regions that we assume do have fairly high meeting emissions. Again, 0:12:42.320 --> 0:12:45.200 the uncertainties here are large, but you could see the 0:12:45.200 --> 0:12:48.160 top three countries as being Russia, Tekmenistan, and the US. 0:12:48.840 --> 0:12:51.280 But then when you're looking at the intensity of production, 0:12:51.360 --> 0:12:55.840 production in Tekmenistan volume wise is much lower then that 0:12:56.080 --> 0:12:59.600 of than what's being produced in the United States, for example, 0:12:59.640 --> 0:13:02.400 So that's a particular problem. They are low incentives there 0:13:02.400 --> 0:13:04.400 in terms of tackling the problem. There's a low level 0:13:04.400 --> 0:13:08.480 of transparency in the local fossil fuel sector and that's 0:13:08.520 --> 0:13:10.280 been a big issue. And it also means that when 0:13:10.320 --> 0:13:12.280 we're looking at the global Methan pledge, a lot of 0:13:12.320 --> 0:13:16.559 the impetus then sort of lies with importing countries, so 0:13:16.679 --> 0:13:21.160 places like the EU, but also like East Asia, like China, 0:13:21.480 --> 0:13:24.440 Japan and South Korea. China imports a lot of gas 0:13:24.480 --> 0:13:27.319 from Turkmenistan, so if it joined the Global Meeting Pledge, 0:13:27.320 --> 0:13:29.240 which doesn't look like it's the case now, but who 0:13:29.320 --> 0:13:31.640 knows what could happen over the next few days that 0:13:31.720 --> 0:13:35.640 could put pressure on producers there to clean up their act. 0:13:36.000 --> 0:13:38.440 Just to add anecdotally, I was reading an article that 0:13:38.520 --> 0:13:40.880 came out on Bloomberg News actually the other day that 0:13:41.400 --> 0:13:46.720 talked about Turkmenistan's methane hell of fire crater, which was 0:13:46.760 --> 0:13:49.920 a crater that formed because it had a build up 0:13:49.920 --> 0:13:53.320 of meeting that eventually exploded. And then to solve the problem, 0:13:53.600 --> 0:13:56.199 someone lit it on fire and it has just been burning. 0:13:56.679 --> 0:14:00.160 It has been sort of effectively on fire since one 0:14:00.200 --> 0:14:03.200 which is over a decade ago at least. Explain this 0:14:03.280 --> 0:14:06.480 to me. How setting it on fire solving the problem? 0:14:07.200 --> 0:14:09.880 You know, I I don't know. I don't think they know. 0:14:10.000 --> 0:14:12.640 But it makes for, if nothing else, a good visual 0:14:12.640 --> 0:14:16.040 attraction if you ever find yourself in Turkmenistan. Wow. And 0:14:16.160 --> 0:14:19.280 this is going to burn for some time because once 0:14:19.280 --> 0:14:22.040 it gets started. There are similar things that happen in 0:14:22.080 --> 0:14:24.720 coal basins in the US as well. It's a it's 0:14:24.760 --> 0:14:28.160 a problem, and it's with methane emissions that there's something 0:14:28.200 --> 0:14:30.800 similar as well. When you flare methane, you can burn 0:14:30.840 --> 0:14:33.600 it and it converts it to carbon dioxide. But the 0:14:33.600 --> 0:14:37.840 issues that process is rarely we'll not always entirely efficient, 0:14:37.880 --> 0:14:40.640 and if you have older equipment, then that can mean 0:14:40.680 --> 0:14:43.520 that your efficiency of the flaring process means only about 0:14:44.240 --> 0:14:48.000 the methane of the natural gas is converted to carbon dioxide, 0:14:48.000 --> 0:14:51.360 so you're still leading to it, still seeing large methane 0:14:51.520 --> 0:14:54.320 leakage as a result of those practices. Now, for a 0:14:54.400 --> 0:15:00.560 very short break, stay with us, So can you explain 0:15:01.000 --> 0:15:05.000 what issues are currently being discussed in the United States 0:15:05.040 --> 0:15:08.200 as a part of some of their domestic bills that 0:15:08.240 --> 0:15:11.400 are making their way through the House and the Senate. 0:15:12.000 --> 0:15:15.520 I think the biggest and the brightest star in all 0:15:15.560 --> 0:15:18.400 of this is them talking about a me saying tax 0:15:18.440 --> 0:15:21.480 effectively and it's in the range of about nine hundred 0:15:21.520 --> 0:15:24.680 to a thousand, five hundred dollars per metric ton. And 0:15:24.720 --> 0:15:26.720 we're actually doing some sort of back of the envelope 0:15:26.720 --> 0:15:29.720 analysis on this earlier today, and we found that if 0:15:29.760 --> 0:15:34.280 you take sort of the methane rates assumed or published 0:15:34.280 --> 0:15:38.560 through the EPA, the Environmental Protection Agency four leakage along 0:15:38.600 --> 0:15:42.120 production sites, then you're talking about and this tax goes 0:15:42.120 --> 0:15:45.600 into effect, you're talking about a gas producer having sort 0:15:45.600 --> 0:15:49.040 of liability in the millions. But and this is where 0:15:49.080 --> 0:15:51.280 it gets really interesting. If you look at it from 0:15:51.280 --> 0:15:55.240 a sabllite data perspective and talk about, okay, what are 0:15:55.320 --> 0:15:59.040 the actual emissions, assuming that there's some under reporting going on, 0:15:59.520 --> 0:16:04.160 that number gets into the billions. So depending on the 0:16:04.280 --> 0:16:07.680 actual policy, the price that it comes out at, the 0:16:07.760 --> 0:16:10.400 tax that is um and then how they enforce it, 0:16:10.440 --> 0:16:12.680 this could be really game changing for the for the 0:16:12.760 --> 0:16:15.600 U S gas industry. That's exactly right, and there's also 0:16:15.880 --> 0:16:18.480 something to be said for the pressure that already exists 0:16:18.560 --> 0:16:22.240 on US producers, and what we've seen is that again, 0:16:22.280 --> 0:16:26.120 as we've mentioned, accidents of geography mean that US producers 0:16:26.120 --> 0:16:29.720 are particularly exposed to satellites, more so than is the 0:16:29.760 --> 0:16:34.360 case for other producing regions. Also, there's practice for extraction 0:16:34.440 --> 0:16:36.880 in place, like the permanent involved fracking. There's been a 0:16:36.880 --> 0:16:40.600 lot of concerns around the environmental footprint that that involves, 0:16:40.720 --> 0:16:44.680 and that's led to pushback from certain quarters, including governments 0:16:44.680 --> 0:16:49.880 in the so France is one example where the French 0:16:49.960 --> 0:16:55.320 government basically put pressure on energy um and local utility 0:16:55.360 --> 0:16:59.360 to cancel an import detailed deal from next Era the 0:16:59.560 --> 0:17:04.520 US user based on fears around frackings of methane footprints. 0:17:04.520 --> 0:17:07.680 And we've also seen similar moves be made in in Ireland, 0:17:07.720 --> 0:17:11.880 where there's been popular pushback against energ projects. We're also 0:17:11.920 --> 0:17:16.320 seeing the EU try and regularize things, and we're awaiting 0:17:16.480 --> 0:17:20.680 over the course of this year a gas decarbonization package, 0:17:20.960 --> 0:17:25.240 part of which will be basically enacting proposals that were 0:17:25.280 --> 0:17:28.480 made last year around setting up a framework that would 0:17:28.480 --> 0:17:31.399 allow you to look at the methane intensity of different 0:17:31.440 --> 0:17:35.040 sources of natural gas, which could then be tied to 0:17:35.119 --> 0:17:38.560 different types of policy for actually having a bit more 0:17:38.600 --> 0:17:41.200 of a handle on the associate or on the on 0:17:41.520 --> 0:17:45.480 the emissions associated with supply chains and imports into the 0:17:45.480 --> 0:17:48.840 European Union. There's been some discussion as of late, and 0:17:48.840 --> 0:17:52.280 actually this came up as a topic of an entire 0:17:52.359 --> 0:17:55.119 panel at the recent b an F summit in London, 0:17:55.280 --> 0:17:58.200 which took place at the end of October, was around 0:17:58.480 --> 0:18:01.600 engagement versus davis for some of these companies when they're 0:18:01.600 --> 0:18:04.480 thinking about some of their highest emitting parts of their business. 0:18:04.760 --> 0:18:07.920 So for the oil and gas industry, they're methane assets. 0:18:08.800 --> 0:18:11.840 There has been in some circumstances companies that have actually 0:18:11.880 --> 0:18:13.960 sold off these assets to get them off their balance 0:18:13.960 --> 0:18:16.600 sheets so that they appear to be cleaner and greener 0:18:16.760 --> 0:18:20.400 for investors. Now, would the bills that are currently being 0:18:20.400 --> 0:18:22.680 discussed in the US, if we're just going to narrow 0:18:22.680 --> 0:18:25.639 it down to that region, would it address those producers 0:18:25.680 --> 0:18:28.000 that are smaller that maybe seemed to be at this 0:18:28.040 --> 0:18:31.120 point in time somewhat slipping under the radar. Yeah. Absolutely. 0:18:31.160 --> 0:18:35.080 I think from any perspective, if I was a big 0:18:35.119 --> 0:18:38.000 integrated oil and gas company looking to clean up my 0:18:38.040 --> 0:18:41.320 balance sheet, if you will, by selling off the dirtier assets, 0:18:41.840 --> 0:18:45.120 if there's now a tax liability on some of these assets, 0:18:45.200 --> 0:18:47.720 it would just make it much harder to sell. As 0:18:47.720 --> 0:18:51.159 a private equity backed firm who's on the smaller side, 0:18:51.200 --> 0:18:52.600 I would be left by you to come in and 0:18:52.760 --> 0:18:55.800 purchase that. As you know, it's just not as profitable 0:18:55.880 --> 0:18:58.199 as if I was able to pump out oil and 0:18:58.240 --> 0:19:01.840 gas with no with no repercussion for my emissions. This 0:19:02.000 --> 0:19:03.840 is an area that you know, even we at b 0:19:03.920 --> 0:19:08.240 any of haven't discussed a ton up until I would 0:19:08.280 --> 0:19:13.320 say the last year, And as that's happening, what is 0:19:13.359 --> 0:19:17.359 the most frequently asked questions that you're asked regarding meeting. 0:19:17.800 --> 0:19:20.199 For me, it's a it's a couple of things. The 0:19:20.280 --> 0:19:25.159 first is, if I'm a producer interested in actually reducing emissions, 0:19:25.320 --> 0:19:27.560 how do I go about doing it? You know, what 0:19:27.600 --> 0:19:31.159 are what are the best practices? What is typically or 0:19:31.160 --> 0:19:33.800 at least the best answer, in my opinion is the 0:19:34.000 --> 0:19:36.720 very first step is to actually figure out what is 0:19:36.760 --> 0:19:39.679 going on within your asset base, So to go in 0:19:39.760 --> 0:19:45.040 and actually measure real time continuous emissions monitoring for your 0:19:45.160 --> 0:19:48.440 entire asset base, to know which valves are faulty, which 0:19:48.440 --> 0:19:51.200 compresses a faulty, where it's coming from. If you've plugged 0:19:51.200 --> 0:19:54.359 and abandoned a well, is that well properly plugged? Or 0:19:54.440 --> 0:19:57.399 is methane seeping out of the ground. To truly tackle 0:19:57.480 --> 0:20:00.440 the problem, you need to understand what the the big 0:20:00.560 --> 0:20:03.320 issues are. And then the second question, and I'll let 0:20:03.359 --> 0:20:05.520 Antonine come in after this. Then the second question is 0:20:05.520 --> 0:20:09.520 more around the market for it. I think meat introduction 0:20:09.640 --> 0:20:14.400 has at least up until now, been portrayed as being 0:20:14.400 --> 0:20:17.159 sort of forced onto the industry more stick than carrot, 0:20:17.240 --> 0:20:19.920 if you will. But I think there's a real opportunity here, 0:20:20.080 --> 0:20:23.440 and that is the carrot where if you do reduce 0:20:23.480 --> 0:20:27.639 your emissions, you effectively have a new product, responsibly sourced 0:20:27.680 --> 0:20:30.040 to gas product if you will, then you can use 0:20:30.080 --> 0:20:33.080 to differentiate yourself and sell into a premium market. So 0:20:33.200 --> 0:20:35.840 just questions around when that market might develop, what that 0:20:35.920 --> 0:20:38.880 premium might look like. And you know this is all 0:20:38.920 --> 0:20:41.119 in its nation stages, So I think if you're making 0:20:41.160 --> 0:20:43.760 that bet, you should make it now. Uh, and the 0:20:43.760 --> 0:20:47.080 market will develop. I can't speak to what the prices 0:20:47.160 --> 0:20:50.560 might look like though, And and it's a massive undertaking 0:20:50.640 --> 0:20:54.720 to set up the framework for data collection um to 0:20:54.800 --> 0:20:58.720 actually set up benchmarks that are internationally accepted. In my opinion, 0:20:58.720 --> 0:21:01.880 we kind of had a pivotal moment where these kind 0:21:01.920 --> 0:21:05.399 of benchmarks, this kind of standard setting can make a 0:21:05.400 --> 0:21:07.639 real big difference in the energy transition, and we're seeing 0:21:07.640 --> 0:21:12.680 that because of trade taking an increasingly important role. So 0:21:12.840 --> 0:21:17.080 there's all kinds of initiatives around understanding what we're starting 0:21:17.119 --> 0:21:19.920 to talk about the international trade of hydrogen and then 0:21:19.960 --> 0:21:23.359 how different sources of hydrogen might compare in their carbon intensity. 0:21:23.640 --> 0:21:26.520 We're talking about setting up a carbon border adjustment mechanism 0:21:26.520 --> 0:21:29.040 in the EU that requires us to have a handle 0:21:29.640 --> 0:21:34.119 on the carbon that's embedded in things like steel and 0:21:34.240 --> 0:21:38.800 cement and aluminium, and methane is just one more example. 0:21:38.880 --> 0:21:41.840 And again the EU set up a special observatory to 0:21:42.040 --> 0:21:45.240 basically track to use satellite data and other sources to 0:21:45.440 --> 0:21:49.240 track the emissions associated with different sources, so that you 0:21:49.280 --> 0:21:51.439 can basically have a sort of labeling scheme for a 0:21:51.480 --> 0:21:54.000 cargo of natural gas that gives you an idea of 0:21:54.000 --> 0:21:57.800 how methane intense it was across its value chain. How 0:21:57.840 --> 0:22:00.159 that set is going to be a matter for a 0:22:00.200 --> 0:22:01.960 lot of diplomacy. There's going to be a lot of 0:22:02.359 --> 0:22:04.480 a big lift in terms of making sure the data 0:22:04.560 --> 0:22:06.320 is up to scratch, and it's not going to be simple, 0:22:06.400 --> 0:22:10.239 but moving into areas like this where you can have 0:22:10.320 --> 0:22:12.920 a real impact, it is a lot low hanging fruit 0:22:12.960 --> 0:22:15.800 in terms of the investments required to actually tackle methane 0:22:15.800 --> 0:22:19.160 and the fact a lot of the technologies are already available, 0:22:19.200 --> 0:22:22.480 But it's also tough in terms of setting up internationally 0:22:22.480 --> 0:22:27.320