What's new in production
Natural gas is seen by many outside the industry as the future of American energy. It’s touted as a fuel that can provide energy independence and reduce greenhouse gas emissions in the process. The nature of natural gas, in the vision of some a potential “bridge fuel” on the way to a decarbonized energy system, creates an environment for environmentalists and producers to, if not sing together around the campfire, at least enjoy a wary detente.
But one thing could wreck this party. Fugitive methane emissions are a problem, with increasing visibility on the public radar screen. It’s the methane that nobody wants. But it’s also an opportunity—for producers and environmentalists to actually collaborate. And, collaborating they are.
More on that in a moment. First, a tout for natural gas, by the National Academy of Sciences. In the paper, “Greater focus needed on methane leakage from natural gas infrastructure,” Alvarez, et al., the authors state, “Compressed natural gas vehicles could produce climate benefits on all timeframes, if the well-to-wheels CH4 leakage were capped at a level 45%–70% below current estimates.
By contrast, using natural gas instead of coal for electric power plants can reduce radiative forcing immediately, and reducing CH4 losses from the production and transportation of natural gas would produce even greater benefits. There is a need for the natural gas industry and science community to help obtain better emissions data, and for increased efforts to reduce methane leakage, to minimize the climate footprint of natural gas.”
In an attempt at quantification, the scientific community is giving these emissions a hard stare. Getting this right is crucial to wider use of natural gas. According to a recent study, if total CH4 emissions are greater than approximately 3.2% of production, the immediate net radiative forcing for natural gas use is worse than for coal, when used to generate electricity.
Methane detectors challenge. This is where collaboration comes in. The Environmental Defense Fund (EDF) says that the environmental advocacy group and eight oil and gas companies are challenging technology developers to design new methane monitors that can help the industry better detect and reduce methane emissions. Advancing technologies that make it easier for companies to continuously detect methane leaks is the goal of the challenge.
Five technologies selected by EDF and its partners were tested by Southwest Research Institute (SwRI). The selection panel was advised by independent experts from Aerodyne, the Environmental Protection Agency and the Houston Advanced Research Center, among others.
The technologies performed well in detecting methane concentrations over a range of temperature and humidity conditions. Four of the technologies were selected to advance to second-phase field testing. According to EDF, its industry partners are moving to purchase and deploy the top-performing technologies. Participating companies will pilot the sensor systems across a range of geographies and facilities, beginning in first-quarter 2016.
Cost-effective solutions. ICF International (ICF), a technical consulting firm with experience in the energy sector, analyzed the economics of methane emission reduction opportunities across the natural gas industry, from upstream production to downstream distribution. The report (commissioned by EDF) claims that methane emissions can be reduced significantly, and cost-effectively, using currently available technologies and operating practices.
ICF’s analysis is based on data and comments from numerous organizations, including producers, pipeline operators, equipment vendors, service providers and a trade association. Among the report’s key findings:
- Total methane emissions from U.S. oil and gas are projected to increase 4.5% by 2018, as emissions from industry growth outpace reductions from current regulations;
- Methane emissions could be 40% below projected 2018 levels, at an average annual cost of less than one cent per Mcf of produced natural gas by adopting available emissions-control technologies and operating practices;
- If the full economic value of recovered natural gas is taken into account, the 40% reduction is achievable while saving the U.S. economy and consumers over $100 million per year;
- The most cost-effective methane reduction opportunities would create over $164 million of net savings for operators.
Reduce emissions, create jobs. According to a new report from Datu Research, “The Emerging U.S. Methane Mitigation Industry,” tackling methane emissions can create high-quality jobs in a growing domestic manufacturing and service sector. Commissioned by EDF (a busy group), the report identifies 76 companies, nationwide, that manufacture, sell and support the proven and cost-effective methane control technologies available today.
It goes on to say that companies working in this area are sure to benefit, as demand for this equipment and these services is expected to rise. A summary of the report’s findings underscore the potential business opportunities:
- At least 76 firms manufacture methane mitigation equipment in the U.S and/or offer services;
- Methane mitigation companies provide U.S. jobs in at least 531 locations across 46 states;
- The median hourly wage for the industry is $30.88, compared to $19.60 for all U.S. jobs.
From all this, it does appear that opportunity is knocking. It also appears that the industry and environmental advocacy groups can collaborate. Who knew? 
