Norway steers clear of US-Canada methane pledge

OREANDA-NEWS. May 16, 2016. Norway today applauded efforts by the US and Canada to pursue mandatory methane emissions cuts from oil and gas operations, but steered clear of pledging any similar reductions.

The US and Canada in March pledged to jointly develop regulations to cut methane emissions from existing oil and gas sources by at least 40pc by 2025.

Norway during a Nordic-US summit in Washington welcomed the initiative, encouraged other countries to join the effort and expressed support for a global methane emission goal for the sector. But the pledge from Norway and other Nordic states attending the summit hosted by US President Barack Obama was merely to "keep methane emissions from the oil and gas sector at or below current levels."

Norway, the only significant producer among the Nordic states attending the summit, reported 1.59mn b/d of crude oil output and 12.7 Bcf/d of natural gas output in March, preliminary government data show.

The mismatch in pledges between Norway and the US reflects different approaches to climate change policies. It likely also reflects the relative share of oil and gas in the countries' GDP. Oil and gas extraction as a relative share of GDP is 5pc in Canada, less than 1pc in the US and about 22pc in Norway, based on government data.

Norway's state-owned Statoil was among the first major oil and gas companies to launch voluntary initiatives designed to reduce methane emissions from the sector. Norway, Sweden and Finland are part of the Carbon Pricing Leadership Coalition advocating global goals for putting a price on greenhouse gas emissions.

The US administration has pushed for voluntary commitments by US oil and gas companies, but the reduction pledges have come mostly from the downstream segment. The US Environmental Protection Agency listed the insufficient interest in voluntary efforts among reasons for pushing for regulations requiring US oil and gas companies to limit methane emissions. And the notion of a federally-imposed price on carbon is anathema in the Republican-controlled Congress, even though many US states are pursuing such policies.

The countries attending the summit — Denmark, Finland, Iceland, Norway, Sweden and the US — called for diversification of Europe's energy supplies. Statoil is looking to increase its natural gas market in Europe and LNG exports from the US could also gain a share in Europe's supply, both with the potential to displace imports from Russia.

The US and Nordic countries promised to work toward "the highest global standards, best international practice and a precautionary approach" for new and existing commercial activities in the Arctic, including oil and gas operations.

"Our six nations remain strong partners in climate change, including the implementation of the Paris agreement and transitioning to a low-carbon economy," Obama said. The summit participants said they would accelerate a transition to a clean energy future, with Swedish prime minister Stefan Lofven pledging to make Sweden the first fossil fuel-free developed nation in the world.

The share of renewables in Sweden's total energy consumption was 53pc in 2014, EU statistical data show.