Game Time for Fixing The Natural Gas Industry’s Achilles Heel

As the dog days of summer expire and football season approaches, many sports fans will anxiously scan their favorite team’s rosters for training camp injuries–finding everything from the innocuous, to the dreaded torn Achilles that already sidelined several pro players for the season’s start.

Gametime-300x250When it comes to the energy industry, methane emissions loom as the Achilles heel of natural gas. On the surface, natural gas appears to many as a star American player – abundant and cleaner burning than coal.

But unchecked methane emissions, which are 84 times more potent than CO2, undercut natural gas’ climate change performance.

This risk has grown particularly acute because the recently finalized Clean Power Plan, which targets carbon dioxide emissions from coal-fired power plants, casts natural gas as part of a viable near-term strategy to win the climate game.

The spotlight on natural gas’ performance is only growing as more viewers tune in.

The difference is, while there is no sure-fire way to prevent an Achilles tear on the athletic field, we have the means at our fingertips to dramatically reduce methane emissions and help natural gas become a stronger player that puts more points on the board for the economy and climate.

New EPA methane rules announced Tuesday can be an important step if finalized in strong form, yielding four business benefits:

  1. Address investor concerns

Last month, investors with $1.5 trillion in assets under management pointed out that methane emissions from oil and gas are “threatening infrastructure and economic harm that will weaken not only the companies we invest in, but the nation as a whole.”

But there are solutions, and it’s time to up our investment.

As a representative from institutional investor giant CalPERS put it: “Regulation to ensure that companies manage, monitor and ultimately limit these potent [methane] emissions is vitally important.”

That’s because, although some proactive companies like Noble, Southwestern and a number of others are – to their significant credit – taking action to reduce emissions in the absence of national standards, volunteerism alone is not a credible approach to guaranteeing environmental protections across a sprawling industry with thousands of companies.

  1. Reduce needless waste

We have the technologies today to reduce emissions, not only benefitting climate and local air quality, but also boosting industry’s efficiency by producing one of its main products.

Statoil is one of the leaders in this area, and explains in this video that from a core business perspective, its use in Texas of military derived, infrared FLIR technology keeps more product in the pipes and increases sales.

Just as fuel economy standards for cars catalyzed a surge in efficiency in Detroit, a level playing field of methane regulations will boost efficiency and cut waste in the oil and gas industry.

  1. Create American jobs

Many of the technologies that forward-leaning companies are adopting to cut emissions are manufactured by domestic firms. In fact, nearly 60 percent of the companies in our burgeoning methane mitigation industry are small businesses, the growth engine of the American economy. The median wage of over $30/hour is more than 50 percent greater than the nation’s average.

This industry unto itself stands at the ready with cost-effective solutions. And it stands to grow.

As Colorado-based leak detection business Apogee Scientific said of its experience with state-based methane regulations: “We have seen first-hand that standards created in a collaborative, multi-stakeholder process can reduce methane emissions in a cost-effective manner that will reduce waste, benefit the environment and create American jobs.”

  1. Build a pathway for natural gas trucks

Some companies see natural gas trucks as a growth opportunity, while others have already invested and want to manage reputational risk. For both camps, methane regulations are a boon.

That’s because based on today’s methane emission rates, switching from diesel to natural gas  trucks can cause 50 to 90 years of climate change damage, raising serious questions about the wisdom of the choice. Upstream regulation of methane – in the vast supply chain the gas passes through before it reaches the trucks – is a key pathway to tilting natural gas trucks investments from risk to return.

Let’s start fixing natural gas’ Achilles heel this season. Getting strong methane rules over the goal line is a big piece of the game plan.

Methane Mitigation Sector: EPA Actions Good for Industry, Will Curb Waste and Protect Communities

sean_wright_287x377A rising chorus of companies in the oil & gas services sector are adding their voices to the majority of Americans who think it’s a smart idea to limit vast waste of methane taking place every day in the nation’s the oil and gas operations. These companies in the methane mitigation industry are experts in finding and fixing methane waste. They issued statements welcoming the EPA’s announcement of planned rules aimed at reducing methane emissions from the oil and gas value chain.

As the ones who are working overtime to provide technologies and services to minimize release of methane and other pollutants throughout the natural gas value chain, these companies see limiting methane emissions as smart business for the oil and gas industry.

Consider their remarks:

  • “Rebellion Photonics welcomes today’s announcement from the EPA regarding its methane plan. It is a positive step towards ensuring we minimize emissions of methane, a short-term climate forcer, from the US oil and gas value chain. America’s shale revolution holds vast potential to both power our economy and drive environmental gains. Limiting the amount of methane that leaks from natural gas equipment ensures that we will maximize the environmental benefits of America’s plentiful natural gas resources,” said Rebellion Photonics, a manufacturer of specialized cameras that detect methane leaks.
  • “The FSA and its members are committed to doing its part to address climate change. The FSA is well equipped to work with our partners in the oil and gas sector, the EPA and the Obama Administration in finding solutions and being a technical resource to curtail methane emissions,” said the Fluid Sealing Association, which represents major US manufacturers of sealing technology that helps limit emissions of methane.
  • “Apogee Scientific, Inc. looks forward to working closely with the EPA and the Oil and Gas sector to reduce the environmental and health impacts of oil and natural gas development in the United States. As a company based in Colorado, a state with the country’s strongest methane rules, we have seen first-hand how good, comprehensive policy can drive environmental, economic, and local community benefits. The EPA should look at Colorado as the model of how good methane policy can benefit all stakeholders involved,” said Apogee Scientific, a Colorado-based maker of leak detection equipment.

These statements express the clear private-sector support for smart, common sense limits on methane emissions that will level the playing field for operators nationwide and drive down emissions. Read more

Methane Emissions Just Like Oil Spills in the Sky

An inspector uses a FLIR camera to detect methane gas leaks. (Source: FLIR)

An inspector uses a FLIR camera to detect methane gas leaks. (Source: FLIR)

Out of sight, out of mind. This certainly applies to methane emissions from the oil and gas sector.

That’s because methane, a highly potent greenhouse gas and the primary constituent of natural gas, is invisible to the naked eye.

And it’s one reason methane emissions, while a significant threat to our environment, don’t get the attention they should from policymakers or the public when compared to, say, conspicuous oil spills.

But we have the technology to make the invisible visible. As you’ll see in the video below, fugitive methane emissions look very much like an oil spill in the sky.

The footage comes from FLIR, a maker of optical gas imaging cameras and one of the largest companies in the methane mitigation industry.

Read more

Report Finds Opportunity for Natural Gas Job Growth—But It’s Not Where You Think

In 1933, Milton Heath Sr. opened a small, family-run consulting firm to find leaks from natural gas pipelines in an emerging energy market. More than 80 years later, the Texas-based business has expanded to provide more than 1,200 manufacturing and service jobs nationwide.

Methane Cover Photo

Heath Consultants’ business model may have changed – but the company’s commitment to finding and reducing leaks of methane—a potent greenhouse gas—has not wavered.

Stories like Heath’s are the focus of a new report released this week by Datu Research. The Emerging U.S. Methane Mitigation Industry looks at the growing industry that specializes in manufacturing technologies and providing services that help oil and gas companies reduce their environmental impact and deliver a valuable product to market.

The report analyzes more than 70 companies that limit methane emissions and provide high-paying, highly skilled jobs to thousands across the country. They operate in a rapidly growing industry responding to concerns over methane pollution that is rising in tandem with our domestic energy boom.

Read more

Financial Sector Focuses on Risks from Methane

Environmental concerns about methane emissions continue to grow as more people understand the negative climate implications of this incredibly potent greenhouse gas. Now the financial community is taking note of not only the environmental risks but the impact of methane emissions on the oil and gas industry’s bottom line. Methane leaks not only pollute the atmosphere, but every thousand cubic feet lost represents actual dollars being leaked into thin air—bad business any way you look at it.

stock graph

Source: Ash Waechter

Last week the Sustainability Accounting Standards Board (SASB)—a collaborative effort aimed at improving corporate performance on environmental, social and government issues—released their provisional accounting standards for the non-renewable resources sector, which includes oil and gas production.

These accounting standards guide companies on how to measure and disclose environmental, social, and governance (ESG) risks that impact a company’s financial performance. Their work highlights the growing demand amongst investors and stakeholders for companies to report information beyond mere financial metrics in order to provide a more holistic view of a company’s position.

Read more