Positioned for Climate Action

Mark Green
Posted March 25, 2021

API’s new Climate Action Framework is much more than a list of policies and actions to address the risks of climate change. It’s a values statement, the natural gas and oil industry’s commitment to lead on the twin necessities of cleaner energy and lower greenhouse gas emissions.

We can achieve both. The natural gas and oil industry details in this framework an action plan to get it done, working together with government and other stakeholders. As the plan states in its opening sentences, it’s the opportunity of our time.

The Climate Action Framework is based on the fact that, as providers of nearly 70% of the energy our country uses, the natural gas and oil industry is at the center of the national effort to develop and deliver energy while simultaneously reducing emissions in production, transportation and consumption of that energy.

Our nation and the world need reliable, affordable energy for public health, economic growth and as the foundation for broader opportunities – and they also need actions that meaningfully address the risks of climate change. Both paths lead to our industry.

The world runs on natural gas and oil and will continue to do so for decades to come. At the same time, our industry can further reduce emissions throughout the energy value chain through advanced technologies – consistent with our record of innovating to address some of the world’s greatest challenges. From the framework:

Our industry is essential to supplying energy that makes life modern, healthier, and better – while doing so in ways that tackle the climate challenge: lowering emissions, increasing efficiency, advancing technological innovation, building modern infrastructure, and more. Meeting this challenge requires new approaches, new partners, new policies, and continuous innovation.

API’s plan for action:

Accelerate Technology and Innovation

• CCUS – API supports fast-tracking commercial-scale deployment of carbon capture, utilization and storage (CCUS), which captures carbon dioxide emissions from facilities and stores or repurposes them. This is advanced by the 45Q tax credit, which in the bipartisan Energy Act of 2020 further extends credits for CCUS projects by two years.
• RD&D – Industry is for federal funding for low-carbon research, development and deployment.
• Hydrogen – API supports advancing hydrogen technology, innovation and infrastructure.

The U.S. leads the world in deploying CCUS technology. Commercial-scale facilities can capture about 25 million metric tons of CO₂ a year. Source: GCCSI, Global Status of CCS, 2020.

Further Mitigate Emissions from Operations

Technology advancements and increased efficiency drove down methane emissions relative to production in the largest producing basins nearly 70%  between 2011 and 2019, and they continue to trend downward, according to data from EPA and the U.S. Energy Information Administration (graph below). Keys to reducing operational emissions:  

• Methane regulation – API supports the direct regulation of methane from new and existing sources. As API President and CEO Mike Sommers wrote in this blog, reducing methane emissions is key to public confidence in our industry. The industry is ready to work with the Biden administration on a regulatory regime that’s sensible, workable and promotes further technological advances.
• Methane detection – Industry is committed to advancing the development, testing and deployment of new technologies and practices to better detect and mitigate methane emissions.
• Flaring – API supports company efforts toward no routine flaring by a certain date, for example the World Bank’s Zero Flaring Initiative by 2030. The Environmental Partnership has launched a flaring management program that focuses on shared information on best practices, advancing new technologies and collecting data to guide efforts to minimize flaring.
• Refineries – API will engage in the evaluation of a meaningful refinery carbon-emissions reduction program to reduce GHG emissions. This program will identify an achievable target that will result in significant emissions reductions.

Endorse a Carbon Price Policy

An economywide government carbon price policy is the most impactful, transparent way to achieve meaningful progress. Some parameters for carbon pricing:

• All economic sectors – Price carbon at the outset for all relevant GHG emissions across the economy, from all relevant sectors and all emitters.
• Transparency – Design so that consumers have clear incentives to reduce GHG emissions. For example, on transportation fuels, a government policy-imposed carbon price should be disclosed at the point of retail sale.
• Nonduplicative – Avoid regulatory duplication.
• U.S. Competitiveness – Achieve GHG emissions reductions while maintaining U.S. economic growth and global competitiveness.

Advance Cleaner Fuels

• Lifecycle emissions – API supports technology-neutral federal policies that drive GHG emissions reductions from well to wheels the transportation sector.
• Differentiated natural gas – API supports the ongoing development of markets for differentiated natural gas (classified by its emissions intensity) and can develop standards to promote transparency, credibility and international recognition.
• Electricity – API supports policies to advance lower-carbon electricity.

Drive Climate Reporting

• ESG reporting – Support expanded use of ESG reporting guidance for the natural gas and oil industry.
• GHG indicators – Develop a concise template of core GHG emissions indicators to enhance consistency and comparability in reporting.
• Methodologies – Build on API’s compendium of methodologies to estimate emissions, including expansion of methodologies for liquefied natural gas and CCUS.

This a robust, action-oriented plan – again, for meeting the challenge of providing energy and addressing the risks of climate change. These are real, market-based solutions, built on progress industry already has made. They offer a clear choice between short-term mandates that may vary with each new presidential administration and workable approaches that are long-term and certain.

We believe the focus should be on eliminating GHG emissions, not on eliminating the energy natural gas and oil provide. Our industry is equal to the task – one that will require investments, technology breakthroughs and a unity of purpose across the globe.

No one is better positioned or better equipped than the natural gas and oil industry to provide the energy that makes modern life possible while meeting the climate challenge. API President and CEO Mike Sommers:

“America has made significant progress in reducing emissions to generational lows, but there’s more work to do, and there’s nobody better equipped to drive further progress than the people who solve some of the world’s toughest energy problems every day. As our industry accelerates efforts to advance groundbreaking technologies, reduce emissions and drive transparent and consistent climate reporting, we urge lawmakers to support market-based policies that foster innovation, including carbon pricing.”