Why methane reduction matters

Methane currently accounts for around one-fifth of man-made global greenhouse gas emissions on a like-for-like basis. It has a shorter lifetime in the atmosphere than carbon dioxide (CO₂), but a greater near-term warming potential. In fact, methane has more than 80 times the warming power of CO₂ over the first 20 years after it reaches the atmosphere.

But because of methane’s shorter lifetime in the air, reducing new methane emissions could dramatically reduce the pace of warming. So curbing methane emissions from oil and gas can have incredible near-term impacts — both on climate warming and on the world’s ability to meet net zero by 2050 or sooner. Methane is the primary component in natural gas and that’s why we’re in action to minimize methane emissions at our sites.

Increased measurement is key to better reporting and planning targeted interventions — and assessing their impact. And we hope that by sharing our data, we can help others improve their methane emission reduction efforts, too.

However, voluntary initiatives like ours will not be enough to effectively minimize methane emissions across the sector. Regulation has a clear role to play. It’s a fair way to drive all companies to prioritize methane abatement.

Flaring is one of the main sources of methane for our sector. In 2021, we announced our aim to achieve zero routine flaring by 2025 for our US onshore operations. And, in 2020, bp and Shell submitted comments to the Texas Railroad Commission supporting an ambition of zero routine flaring in Texas. We continue to focus on flare reduction activity and to support the World Bank’s Zero Routine Flaring by 2030 initiative, which brings together stakeholders to work together to eliminate routine flaring from operated oil assets by 2030.

Even as we expand our methane advocacy work, bp isn’t waiting for regulation to reduce emissions from our operations. Tackling methane is front and center in our near-term actions that are crucial to our net zero transformation.

Advocating for TCI

The Transportation and Climate Initiative Program (TCI), a regional collaboration seeking to improve transportation, develop a clean energy economy and reduce carbon emissions across 12 East Coast states and the District of Columbia, has proposed a regional cap-and-invest program seeking to reduce carbon emissions from the transportation sector while creating jobs, boosting the economy and modernizing infrastructure.

TCI took a big step forward in 2020, when the governors of Connecticut, Massachusetts and Rhode Island, together with the mayor of the District of Columbia, signed a memorandum of understanding on the program, while several other states signed letters committing to further consideration of the initiative.

Estimates show that the cap-and-invest program would create jobs, increase regional GDP, provide certainty for businesses and reduce emissions.

Designed by state leaders with help from the Georgetown Climate Center, TCI would complement existing climate programs such as the Regional Greenhouse Gas Initiative (RGGI), a successful cap-and-invest carbon pricing system for the power sector. RGGI served as a model for TCI, and bp has proudly championed both.

Expanding the Regional Greenhouse Gas Initiative (RGGI)

Launched in 2009, the Regional Greenhouse Gas Initiative (RGGI) limits carbon emissions from power plants[1] by placing a regional cap on emissions and requiring companies to buy or trade allowances to emit up to the cap limit. The cap decreases annually, so the allowance price rises every year. This system gives industry flexibility to meet reduction targets at the lowest possible cost.

Over the past decade, RGGI states have seen a range of benefits while emissions and electricity costs have declined, according to the Center for Climate and Energy Solutions. Participants currently include Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont and Virginia. Pennsylvania and North Carolina are also considering joining.

We urge states to take all steps necessary to participate in TCI and RGGI. Together with a coalition of business leaders, transportation companies, environmental groups and other stakeholders, bp will continue working to get as many states signed on as possible.

A well-designed cap-and-invest program, such as the one adopted in Washington state, represents the cornerstone of this framework. It provides the certainty businesses need to invest in the future, and it sends clear signals to the private sector that can yield creative solutions for emissions reductions.

Indeed, it incentivizes and rewards low carbon innovation across the entire economy – from the boardroom to small companies to start-ups. Revenue generated from the CCA can go toward state climate priorities, like clean air, electrified transportation and energy efficiency. In addition, projects are reviewed by an advisory panel created by the legislation that centers on the needs of overburdened communities.

As Washington state has demonstrated, we do not have to choose between the environment and the economy — we can invest in both. bp hopes the Washington program will become a model for other states looking to accelerate their own low carbon transition. It shows what progressive climate policy can accomplish.