#3 Measuring and Mitigating Methane in a drill, baby, drill World

"Plan for what is difficult while it is easy, do what is great while it is small" Sun Tzu, The Art of War

I first studied methane in a Grade 10 Organic Chemistry class from a teacher with whom I shared a mutual dislike. Methane resurfaced two years later when preparing for the Indian engineering entrance examinations when studying nucleophilic substitution S_N1 reactions, again taught by an Organic Chemistry teacher I disliked. It was only a decade later at Columbia University that I realized how the chemical compound whose reaction mechanisms we drew up with ease in high school had far-reaching effects on the climate.

Source: The World Bank Flaring Report 2024

When measured over a 100-year horizon, methane has 28 times the Global Warming Potential (GWP) of carbon dioxide. Over a 20-year period, its GWP is estimated to be between 84 and 87, which has led to its being called a “super-pollutant.” The good news is that methane lingers lesser in the atmosphere, with a lifetime of 12 years compared to the near-infinite lifetime of carbon dioxide.

Methane emissions are mainly from agriculture and energy.

The International Energy Agency (IEA) has done a fantastic job of tracking methane emissions and comparing them with multiple sources. However, all of them estimate global methane emissions to be between 300 MT and 400 MT. The variation arises because of the difficulty with precisely monitoring and measuring the emissions.

Agriculture and energy, specifically oil, coal and natural gas, are the sources of approximately 80% of the world’s methane emissions.

Source: IEA Methane Tracker

In the energy industry, methane emissions are of three types. 1) Vented- intentional release of methane emissions for safety and design purposes. 2) Fugitive- leakages that are unintended, and 3) Incomplete flaring, when natural gas that cannot be used or recovered economically is burned instead of being sold or vented.

At least three broad classes of problems emerge:

1. How do we accurately measure methane emissions by sector, country and location?

2. How can we change behaviour and consumption patterns to reduce the consumption of products that generate methane emissions?

3. How do we mitigate methane emissions by capturing them and, if possible, converting them?

Several multi-stakeholder projects leveraging satellite technology are measuring methane emissions globally.

Massachusetts Institute of Technology (MIT) did a fantastic job of articulating the problem with the measurement of methane emissions:

Narrowing down specific sources can be a challenge, especially in the oil and gas industry, which is responsible for a huge range of methane leaks. Some are small and come from old equipment in remote areas. Other sources are larger, spewing huge amounts of the greenhouse gas into the atmosphere but only for short times.

Hence, there are at least four active satellites measuring methane emissions today. They are:

1. EMIT (Earth Surface Mineral Dust Source Investigation), which is anchored by NASA and was originally supposed to study mineral dust, also maps methane and carbon dioxide emissions.

2. GHGSat is a Canadian startup with pioneering emissions-monitoring capabilities that measures methane emissions from industrial sources, especially from oil and gas facilities and serves both regulators and investors.

3. MethaneSAT which is anchored by the Environmental Defense Fund, has the capability to measure emissions from millions of sources.

4. TROPOMI (Sentinel-5P), launched by the European Space Agency, uses a spectrometer to measure methane, carbon monoxide, and other gases with high spatial resolution.

In addition to the satellite missions, FlareIntel, a product developed by Capterio, tracks global flaring. Their data and services add value to both regulators and investors.

Multiple startups mitigate methane, serving specific sectors.

The methane conversion market is a highly competitive one, with different startups solving for different source emissions and serving different geographies. However, there isn’t a single organization serving all markets, leaving the field open for expansion by geographies and sectors.

Some of the prominent names are:

1. StringBio is a Bengaluru-based AgTech startup that develops solutions to decarbonize the cropping process. Their biostimulant Cleanrise has the potential to reduce methane emissions by up to 50% from rice cultivation and increase crop yield by up to 39%. The growth of methane emissions along with rice cultivation has been identified by Indian scientists as far back as 2002. With the large and growing market for rice, the potential for Cleanrise is immense, but such a product might struggle to scale without government support, especially in countries like India, where farming is fragmented and informal, lacking sustainability incentives for farmers.

2. Emvolon is a Massachusetts-based startup that converts methane into high-quality syngas and subsequently green methanol, which can be feedstock for sustainable aviation fuel, chemicals and the shipping industry. Emvolon’s technology has direct and indirect benefits for multiple heavy-emission industries, which has resulted in numerous partnerships and a cumulative investment of USD 10.5 million from investors, including Engine Ventures, Vista Energy and shipping major Dorian.

3. BlueMethane is a London-based startup whose technology measures and captures methane and eventually converts it to biogas, which can be used for in-situ power requirements. The organization serves the wastewater and hydropower industries. Despite the slow growth of hydropower, the large share of emissions from wastewater and the ability to generate value from the process can drive the growth of BlueMethane.

4. M2X Energy is a Florida-based startup that has developed a partial-oxidation approach to low-carbon methanol production from methane-rich stranded gas that accepts feedstocks including landfills, biogas, and well gas and converting a waste stream of natural gas. Given the wide range of sources M2X can capture emissions from, this is a front-runner for taking the lead in the methane capture market.

5. Vespene Energy is a California-based startup that converts landfill methane into baseload renewable electricity. In 2024, Vespene had been invited by the United States Department of Energy for a loan to support the development of distributed biogas to electricity plants at 50 municipal landfills in 21 states as a part of their flagship Project Pleiades. Without the ongoing support and the disaggregated nature of landfills, the future looks relatively bleak for Vespene.

6. Rimere is a US-based startup that has developed plasma technology to convert methane into cleaner alternatives and has engineered its product for the natural gas industry, where methane can be converted to graphene and hydrogen. In 2024, Rimere received a USD 10 million investment from renewable natural gas producer Clean Energy Fuels, suggesting that Rimere’s product has found traction in its target market.

If you know of any more interesting methane mitigation startups, do drop a line in the comments.

Academia sees the importance of methane emissions mitigation and has a large focus on agriculture and livestock.

MIT had previously announced its flagship program, Methane Initiative, led by Prof. Desiree Plata, to undertake multidisciplinary engineering and policy research on methane mitigation to reduce emissions by 45% by 2030. The program was to develop a filter made of zeolite designed to convert methane into CO₂ at dairy farms and coal mines. However, at the time of writing, the program’s website is folded, and there is little indication of recent research in methane on Prof. Plata’s page.

Given the importance of agricultural production to meet food security targets and the need to mitigate methane emissions, the Faculty of Agriculture at Ibaraki University in Japan has raised USD 3.83 million from the Gates Foundation. The project will demonstrate the effects of introducing plant growth-promoting microorganisms, such as KH32C, into rice cultivation on reducing methane emissions under diverse conditions in Asia and Latin America over 3 years.

Under the Biden administration, the University of Kentucky Research Foundation in Lexington was selected to receive approximately USD 7.5 million in funding to develop and field test a methane emissions reduction technology at a permanent installation. This was a part of the larger USD 850 million program to cut methane emissions.

The Australian meat and livestock industry has had a turnover of approximately USD 80 billion for the last few years. Their government is awarding government grants under their Methane Emissions Reduction in Livestock research and development program. The University of New England has been awarded USD 3 million to validate methane-reducing feed additives. The University of Melbourne is being awarded USD 1.14 million to validate various delivery systems for methane-reducing additives in the form of pellets, liquid supplements and licks.

Multilateralism will play a crucial role in supporting innovation

Since methane emissions are sourced from industries critical for the survival of any economy, a few countries taking efforts to decarbonize will offer advantages to those not investing in methane capture to produce at cheaper rates in the immediate term. This has perhaps led to the growth of numerous multilateral and bilateral initiatives to coordinate efforts of various entities- national and subnational governments and corporations. However, there is anticipated turmoil in this global coordination because of President Trump potentially rolling back methane regulations placed by the previous administration.

The most prominent initiative is the Global Methane Pledge, which, as of November 2024, 159 nations had signed—representing more than 50% of the world’s anthropogenic methane emissions. The other prominent one is the Oil and Gas Methane Partnership led by the United Nations Environment Program, which works to improve methane emissions measurement and reporting standards.

Similarly, the Oil and Gas Decarbonization Charter has been signed by over 50 national and international oil-producing companies, including Adnoc, Aramco, Equinor and ExxonMobil among others which account for over 40% of the world’s oil and gas production.

The United States under the Biden administration, signed three bilateral initiatives on methane emission mitigation with China, the European Union and Kazakhstan. However, the new administration is likely to at least mend them if not completely end the regulations.

However, methane measurement and mitigation is relevant and will grow despite unfavorable American policy

There is a growing market for methane mitigation stemming from multiple drivers:

1. There is economic loss associated with methane emissions from the natural gas industry. Research estimates that in the United States alone, USD 1 billion of economic loss stems from methane leakage, coupled with a USD 9.3 billion annual social cost. Since both natural gas and liquefied natural gas (LNG) are projected to grow for at least the next decade, it is in the best interests of gas suppliers to invest in methane capture.

2. Strict methane regulation by the European Union which started from August 1^st, 2024, by introducing measuring, reporting and verification (MRV) requirements of EU-based producers of coal, oil and natural gas. The regulations will get stricter by the year, reaching a peak in 2030 of all suppliers reaching a maximum methane intensity value.

3. Agriculture and livestock are not left behind. Denmark is pioneering the implementation of a tax by charging farmers 300 Danish kroner (roughly USD 43) per ton of CO₂ equivalent that their operations produce. By 2035, the tax will more than double to 750 kroner (roughly USD106). This is next to impossible to imagine in a developing country dependent on agriculture, such as those in South Asia or Africa. If the Danes can pull off methane mitigation from agriculture in five years, they will have set a high standard to beat.

4. Canada has proposed regulations to cut methane emissions by 50% by 2030 compared to 2019 levels. The government deploys CAD 2.4 billion of community building funds, which can be utilized for strategic investments in essential infrastructure, including solid waste management infrastructure.

Summarizing the state of play

The potential pullback on American policy on methane mitigation and the growing consumption of natural gas may not sit well with climate activists batting for methane mitigation. However, I am still bullish about the opportunity, given the interest in stakeholders across the world and the consensus on it being a super pollutant. The on-paper pledges by oil and gas companies make me more optimistic because they would be thinking about a future beyond the peak of gas consumption.

With the current state of play, I believe that there is a role for philanthropy in funding science and engineering research to develop further solutions, especially in underserved areas for mitigation in agriculture, livestock and landfills. Recent research identifies a gap in funding for the waste sector. This is an opportunity for venture philanthropy/impact investors or even pure play venture capital funds willing to take a long punt as funding may only increase closer to regulation implementation timelines.

As research matures, funding from Development Finance Institutions (DFIs) and Multilateral Development Banks (MDBs) can be leveraged to de-risk private sector funding.

Governments will have a critical role in developing infrastructure for research and favorable policies for innovation and startups. In developing countries such as India, which have a fragmented and informal agriculture sector, government funding will be needed to implement mitigation solutions such as the StringBio biostimulant. For example, rice is a growing market but highly commoditized, leaving no incentive for even large-scale farmers to invest in innovative products to differentiate and have disposable income to purchase the biostimulant or equivalent products at their own cost.

Lastly, for all upstream investors focused on energy, the key to success will lie in building strong relations with the corporate venture arms of the large gas producers who have committed to the Oil and Gas Decarbonization Charter and trying to push for the acquisition or significant downstream investment from corporates closer to the peak of natural gas consumption.

Until then, let’s hope for the minimum manifestation of the public health impacts of methane as we drill, baby, drill.

Source: Canary Media

Aside, if you know of any startups or innovative research in redox flow batteries, floating solar technology, or district heating, send me a DM.