Regulation as a Platform for Innovation

IMG_0187To get anything accomplished, you can’t let the perfect be the enemy of the good. One unsung story buried in last week’s release of EPA’s new source methane rules may make good options even better – driving innovation and offering industry more options to meet the methane challenge.

The new rules target a pervasive problem: methane – the primary component of natural gas – leaking throughout the oil and gas value chain. Methane emissions represent a waste of saleable resources, a reputational risk, and a contributor to both poor local air quality and climate change.

Under the EPA’s framework, oil and gas operators must take steps to minimize emissions from new and modified sources – from finding and fixing leaks to swapping out equipment to reduce methane vented from pneumatic controllers and pumps. Companies in Colorado working to comply with the state’s similar rule have reported that putting similar measures in place is cost-effective, even generating positive returns from selling the captured gas.

But what should an agency do when the solutions available now are reasonable but not perfect? Existing strategies don’t monitor all the time – only a few days a year. So leaks and malfunctions can be missed, or leak for months before they are fixed.

MDC-devices-in-fieldNew technologies – emerging from research labs, startups and mature companies in adjacent sectors – can help spot leaks at lower cost, including through continuous monitoring. EDF’s Methane Detectors Challenge will launch pilots of sensitive, rugged, low-cost continuous methane monitors with oil and gas operators. Due to collaborative partnerships, these innovative technologies are advancing rapidly.

In a regulated industry like oil and gas, adaptability as technology progresses is key to ensuring operators can use more effective and lower-cost solutions as they become available. That insight led many innovators, forward-thinking oil and gas operators and EDF to call on EPA to include a pathway to innovation in the final rule.

Path open – and process in place – for emerging technologies

We were delighted to learn that the finalized new source standards offer oil and gas companies “the opportunity to use emerging, innovative technologies to monitor leaks.” The rule acknowledges that “leak detection technology is undergoing continuous and rapid development and innovation.” As a result, it establishes a process for evaluating any alternative work practice that achieves equal or greater emissions reductions. The rule also lists criteria for evaluation – so innovators and operators can get to work pulling together submissions.  This sets a floor for environmental stewardship, and gives an incentive to do better.

aileen_nowlan_31394Any proposed alternative will need to be well tested and should be assessed carefully – a pathway for innovation is not an invitation to cut corners. But being open to alternative technologies shows faith in ingenuity. The methane experience may also offer lessons for how we approach other environmental challenges. Setting a level playing field and laying out the ground rules will help entrepreneurs and companies work out and deliver the better, faster plays.

Some old-fashioned industry monoliths may accuse the regulation of being one-size-fits-all.  But with the door open to innovation, the appetite from operators is there for more methane solutions. Leading oil and gas companies are already partnering with innovators to take advantage of this opportunity.

The day will come soon when anyone who sees only one path forward will have chosen to work with blinders on. That choice will cost them, as companies embracing innovation speed past them with efficient, low-cost made-in-America solutions.

Also of interest:

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