Gas-tastrophe! Global energy chiefs drill for more while their own seeps away

As governments around the world worry about energy security and gas producers spend billions developing new reserves, the industry is confronting an uncomfortable source of additional supply: the methane it is already allowing to escape.

The global gas industry is spending billions of dollars drilling new fields, constructing LNG terminals and securing supply routes while allowing huge quantities of the commodity it already produces to leak, vent or burn into the atmosphere.

That contradiction is becoming harder to ignore as geopolitical tensions push energy security back up the agenda and advances in satellites, drones and infrared cameras make previously invisible methane emissions increasingly measurable.

The International Energy Agency estimates fossil-fuel operations emitted 124mn tonnes of methane in 2025, including 36mn tonnes from natural gas operations. Around 70% of fossil-fuel methane emissions could be eliminated with existing technology, while more than 35mn tonnes could be avoided at no net cost because the value of recovered gas would exceed the cost of stopping the emissions. In essence – fixing leaks pays for itself and then some.

The economics have become even more attractive this year as higher fuel prices increase the value of every molecule captured, according to the agency. That leaves the industry with an apparently simple question.

“We are not waiting for a technological breakthrough,” Carole Nakhle, chief executive of consultancy Crystol Energy, told a methane-abatement panel at the recent Gastech conference in Bangkok. “We know how to do it.”

“So . . . why are we not doing it?”

The scale of the waste is considerable.

The World Bank estimates 167bn cubic metres of gas was flared globally in 2025, up 6% from 2024 and the third consecutive annual increase. That was roughly as much gas as Africa consumed during the year and greater than the volume of LNG transported through the Strait of Hormuz.

Flaring is only part of the problem. Methane can escape from valves, compressors, storage tanks and pipelines or be deliberately vented during normal oil and gas operations. For operators, the environmental cost is accompanied by a more prosaic one: methane is overwhelmingly the principal component of natural gas, meaning every avoidable leak represents a product that cannot be sold.

Adeleye Falade, managing director of Nigeria LNG, argued that this should change the way companies think about methane. “Every tonne of methane is a lost opportunity,” he said. Once companies measure where gas is escaping, methane reduction should move out of the sustainability department and into ordinary business planning, he argued. “The good news is that most of the abatement and emissions technology is able to pay itself back,” Falade said. “It sits at the heart of the business.”

The IEA reaches a similar conclusion. Nearly 30mn tonnes of upstream oil and gas methane emissions could be eliminated at no net cost at 2025 energy prices. Among the cheapest measures are routine leak detection and repair, replacing methane-emitting equipment with electric alternatives and installing vapour-recovery systems to capture gas that would otherwise be vented. Yet the industry's methane emissions have remained stubbornly high.

Part of the explanation is that apparently obvious investments do not always fit easily into corporate capital budgets. Methane projects can be overshadowed by larger production developments; the operator paying for repairs may not receive the value of the recovered gas; infrastructure may be unavailable to transport it; and companies sometimes do not know how much methane they are losing in the first place.

Corporate management can also overestimate abatement costs, while developing-market operators may lack specialist equipment, personnel or upfront finance, according to the IEA.

“Leadership commitment within a company is key,” said Niels Dijksman, chief executive of Brunei LNG, adding that managers still have to decide between competing investment priorities even where the economics of reducing methane are attractive. “You have to make choices on priorities,” he said. “It always comes back to measuring. You don't take action before you know how big your problem is.” New measurement technologies are beginning to remove that excuse.

Zubin Bamji, who manages the World Bank's Global Flaring and Methane Reduction programme, pointed to a recent leak-detection campaign carried out with Indonesia's Pertamina at the Bontang LNG complex.

During a survey lasting roughly two weeks, the programme identified more than 250 leaks, Bamji said. About half were repaired during the campaign itself. “This is how quick and easy it can be done now,” he told the panel.

In Uzbekistan, a World Bank-supported programme with the country's gas transmission operator has been structured so that some of the additional revenue generated by retaining gas in the system can be reinvested into further leak detection and repairs.

The programme could save about $18mn a year, Bamji said.

The figure may be relatively modest compared with multibillion-dollar LNG developments, he added, but in developing economies such savings can provide a powerful incentive for companies to establish permanent methane programmes rather than carry out one-off repairs.

Nigeria LNG has gone further in attempting to replace estimates with physical measurements. Falade said the company uses optical gas imaging cameras, drones, ultrasonic equipment, continuous monitoring and source-level measurements to identify emissions. “We don't estimate our emissions. We measure them at source,” he said. Such technology could have consequences beyond reducing waste.

Gas buyers are increasingly asking not simply where a cargo comes from but how much methane was emitted in producing it. Europe is putting that principle into law.

From August 2028, importers into the EU will have to report the methane intensity associated with imported natural gas, oil and coal for relevant contracts. From August 2030, newly signed or renewed contracts will have to demonstrate that imports fall below a methane-intensity threshold set by the European Commission. That could transform methane performance from a voluntary environmental metric into a condition of market access.

Falade said customers were already beginning to ask producers “what it took for you to be able to produce” their gas, with emissions performance increasingly capable of affecting both pricing and access to buyers. The result is an unusual alignment of climate and commercial interests.

Cutting methane slows greenhouse gas emissions, but it can simultaneously increase available energy supply, improve plant safety and generate additional revenue. The obstacle is therefore increasingly not technology.

The IEA estimates that fully deploying methane-abatement measures in oil and gas would require about $22bn a year through 2035. That sounds substantial, but the agency calculates it represents less than 2% of the fossil-fuel industry's annual net income.

At the same time, producers continue to search for increasingly difficult and expensive new sources of gas.

For an industry confronting growing demand, geopolitical supply risks and greater scrutiny from buyers, some of the cheapest incremental gas may therefore not require another exploration licence, drilling rig or LNG train. It may simply require finding the gas that is already escaping.