Methane Emissions Reduction At The Oil Patch: How To Get There

Emily Pickrell, UH Energy Scholar

Last fall, President Joe Biden joined other global leaders to assure the world they were serious about rapidly reducing methane emissions.

Methane emissions are now seen as one of the big contributors to global warming, especially in the short term. Methane is estimated to initially have a much more devastating impact: It traps up to 84 times as much heat as carbon dioxide in the first 20 years. This impact diminishes to a still-devastating 27 to 30 times over a 100-year time horizon.

“One of the most important things we can do in this decisive decade … is to reduce our methane emissions as quickly as possible,” Biden said at the UN Climate Change Conference in Glasgow. Both the U.S. and the European Union have promised to cut methane emissions by 30% globally by 2030.

And while much of Biden’s climate change agenda appears stalled in Congress, his administration has a winning strategy to do just that. A proposed rule currently winding its way into final form would sharply reduce methane released into the air by the oil and natural gas industry.

It would be easy to get lost in the details of why this new rule is so important.

The proposed regulation would operate under the authority of the Clean Air Act. It would require states to establish plans to meet the emissions reduction requirements and these plans would be, in turn, overseen by federal regulators. It would apply to more than 300,000 existing facilities. The regulations would cover the entire life cycle of production, processing, transmission and storage of oil and gas.

It would also completely eliminate venting of associated gas from oil wells, requiring the gas to instead be brought to market. While flaring would not be banned, there would be requirements for consistent monitoring and repairs.

The new rules could reduce methane emissions from the hydrocarbon industry by as much as 75%, compared with 2005 emissions. In practical terms, it could mean a reduction of 41 million tons of methane emissions by 2035.

“They will be very effective,” said Victor Flatt, a co-director of the Environment, Energy, and Natural Resources Center at the University of Houston Law Center, explaining that the approach is similar to that adopted to control hazardous air emissions and fugitive emissions. “This is all traditional regulation, using a state plan with some federal monitoring and oversight.”

The rules build on the efforts first made by the Obama administration to address the problem of methane emissions. In 2016, the U.S. Environmental Protection Agency, or EPA, established the country’s first methane emissions regulations, targeting a 40-45% reduction by 2025. At the end of the Trump administration, these rules were revised to ease the restrictions by cutting compliance measures and excluding transmission and storage facilities.

At the time, big players in the industry, who saw the benefits of capturing the methane if everyone made the investment, criticized the rollback.

“The negative impacts of leaks and fugitive emissions have been widely acknowledged for years, so it’s frustrating and disappointing to see the administration go in a different direction,” said Gretchen Watkins, president of Shell U.S.

Congress reversed this rollback in 2021 at the beginning of the Biden administration.

Flatt said that while the new rules will require operators to spend money, the technology to reduce leaks exists and is already being used by some in the field.

“Some of the operators have a 0.1% leak rate, while others have 4% to 5% rate,” Flatt said. “The fact that they can control their leaks means that everyone can do it.”

And these rule changes could be beneficial for industry a whole – they are expected to yield nearly $4.5 billion in net climate benefits a year, with total net benefits of $49 billion by 2035.

Furthermore, the rules have the support of some of the biggest players in the industry, including Exxon and Shell.

“They support it because they are already doing it, and if everyone has to do it, it gives them a competitive edge,” Flatt said.

These standards would further update and strengthen existing guidance to include new sources of methane coming from the oil and gas industry. It would also encourage new methane detection technologies.

The U.S. Environmental Protection Agency has estimated that about 1.6% of natural gas produced in the U.S. escapes directly into the atmosphere. That percentage could be as much as 60% higher according to a 2018 study by Science, which estimated a 2.3% emissions rate based on 2015 emissions. These emissions are both the result of intentional discharges and unintentional leaks from equipment.

Losing that methane to the atmosphere is also increasingly not making much business sense, according to Matt Kolesar, regulatory manager at ExxonMobil’s XTXT
O Energy affiliate.

At that rate, it would have amounted to about $7.6 million worth of gas lost each day last year.

“As a company in the business of selling natural gas, we also want to minimize waste of that natural resource for ourselves and our resource owners,” Kolesar said in an interview with the Environmental Defense Fund (EDF). “It is in our economic interest to ensure our product is captured in the pipe and sold to consumers.”

Exxon says they have developed a leak detection and repair program that has resulted in a 40% decrease in observed leaks in just 18 months.

Indeed, while large operators have both the incentive and the scale of operations for leak detection to make good business sense, some of the smaller and independent operators are more focused on short-term operations and view lack of clear and specific rules as permission to do so.

Regulations, too, have lagged behind the rapid development of shale technology, especially in states like New Mexico, which never had large-scale oil production prior to the development of the unconventional resources in its part of the Permian Basin.

The new rules will leave companies with decisions to make about how best to measure the extent of leaks and other problems and the best technology to use.

Companies like Statoil have experimented with laser-based sensors with some success.

Taking to the skies with a camera in hand is another popular strategy. Kairos Aerospace, for example, claims to have detected methane over more than 4.75 million acres of oil and gas infrastructure in North America on more than 250 separate flights in the last couple of years.

Independent monitors are likewise using the flyover technology. The EDF has completed one of the most comprehensive surveys to date, hiring a leak detection company to fly a helicopter over 8,000 well pads in seven states, capturing photos and videos of methane leaks using infrared technology.

“If you want to know where the methane leaks, flyovers do work,” said Christine Ehlig-Economides, a professor of petroleum engineering at the University of Houston. “These flyovers are quite good at pinpointing right where the problems are.”

Emily Pickrell is a veteran energy reporter, with more than 12 years of experience covering everything from oil fields to industrial water policy to the latest on Mexican climate change laws. Emily has reported on energy issues from around the U.S., Mexico and the United Kingdom. Prior to journalism, Emily worked as a policy analyst for the U.S. Government Accountability Office and as an auditor for the international aid organization, CAR

UH Energy is the University of Houston’s hub for energy education, research and technology incubation, working to shape the energy future and forge new business approaches in the energy industry.