4 Reasons a National Methane Policy Will Be Good for Business

After months of anticipation, the Obama Administration this month released its new methane emissions strategy – a plan that opens up new opportunities for industry writ large, and especially for operators that want to cut waste and get ahead.

methaneleaks2_378x235The centerpiece of the strategy are imminent rules that will help us meet a new national goal to reduce harmful methane pollution from oil and natural gas operations by 45 percent by 2025.

But the rules also bring direct industry benefits. Here are four reasons the new methane emissions strategy is a boon, rather than bane, for America’s $1.2-trillion oil and gas sector:

1. It tackles $1.8 billion in annual waste and adds market certainty

Leaky infrastructure and unnecessary venting across the oil and gas value chain cost an estimated $1.8 billion in wasted product and lost revenue annually.

The new rules require companies to include up-to-date controls as they build out new and modified infrastructure, keeping gas in the pipeline while making new facilities more efficient.

Research shows such investments would cost industry no more than a penny on average per one thousand cubic feet of natural gas produced, and even save money in some cases.

The new rules also help bring market certainty.

As Goldman Sachs has pointed out, methane regulations are needed to address investor concerns, and unlock job creation and the most positive future for this American fuel.

Yes, as popular as the trend may be with consumers, today’s low oil prices cause economic pain for producers, and some operators are cutting back on costs.

But executives with vision beyond the next quarter can see that small, short-term investments in emission reduction technologies and practices are part of the longer game.

2. It builds goodwill and trust = good for business

Recent polling by the American Lung Association found that while less than a quarter of Americans have a favorable view of the oil and gas industry, two-thirds support new federal limits on methane emissions.

Hydraulic fracturing bans in New York and Denton, Texas, reinforce that industry simply must do more to earn public trust.

Welcoming rigorous rules builds trust. That's one reason oil and gas companies in Colorado actively supported the ground-breaking policy enacted last year to begin limiting methane emissions.

Getting behind well-designed policies – and engaging in a collaborative way with the administration throughout the rulemaking process – is simply good business.

"Just say no" is not a credible position; it's time for the industry to show what it's for.

3. It sorts winners from losers

Ben Ratner headshotYou can tell a lot about a company by how far its environmental strategy goes beyond mere compliance.

This first iteration of the national methane rules will only set requirements for new and modified infrastructure. To achieve the national target, existing sources will need to be regulated as well, and indeed, they already are in Colorado and parts of Ohio.

Speed defines winners and losers in this industry.

Leading companies will get ahead of the curve – and of their competitors – by bringing existing facilities up to the standards of new facilities before they’re required to do so.

Companies such as Southwestern Energy have demonstrated a drive to excel with their use of infrared cameras for leak detection and repair, among many other control strategies.

Others such as EQT Corp. responded to last week’s announcement saying “we are committed to… even go beyond the White House’s focus of only new and modified emissions sources by targeting potential emissions at existing sources.”

4. It can help operators attract new talent in a competitive field

There is a well-known battle for talent in the hyper-competitive oil and gas sector. As environmental concerns swell – particularly for skilled young people in the labor force – companies can seize competitive advantage by supporting solutions-oriented environmental policies of which employees can feel proud.

With the methane strategy now announced, companies in the oil and gas sector face a choice.

They can seize an opportunity and help build a clean energy future. Or they can cling to old ways of doing business that fuel uncertainty and lingering doubts about license to operate.

Also of interest:

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.

Curbing leaks and minimizing vented methane keeps gas in the pipeline for their clients, improves air quality for communities and reduces how much of this supercharged climate pollutant is released into the atmosphere.

Less waste at a low cost

These companies manufacture the kinds of proven, cost-effective technologies highlighted in a 2014 report by consultancy ICF International that can significantly and cost-effectively reduce emissions. ICF found that by using the products and services provided by these American companies, the oil and gas sector can reduce emissions by 40% for, on average, less than a penny per thousand cubic feet (mcf) of natural gas produced.

Furthermore, those investments would save the oil and gas industry over $1 billion a year in wasted product, enough gas to heat nearly 6 million homes a year.

Jobs, Jobs, Jobs: U.S. manufacturing industry tackling methane emissions

There are over 75 American companies with over 500 company locations spread throughout 46 states involved in the methane mitigation business.  More widespread adoption of methane mitigation technologies and services driven by the EPA’s proposed rule will give a boost to the U.S. manufacturing sector and create jobs, particularly for small businesses, which make up almost 60% of the methane mitigation industry. It will give a boost to local economies, many of which are in areas most in need of cutting emissions, such as Texas, Oklahoma and Colorado.

The companies within this industry make the products we need to fix this problem, and are continuously investing in new technologies to better find and fix sources of emissions. They are solutions-oriented and stand ready to help the oil and gas industry to solve this problem.

Two Bold Efforts to Speed Methane Detection Technology to Market


Surging national focus among both industry leaders and government officials on the problem of methane emissions has put a sudden new premium on tools and technologies to help identify the leaks and other sources where the potent, heat-trapping greenhouse gas is escaping into the atmosphere. The good news is that some of the planet’s best innovators are rising to the challenge.

 Two major initiatives are helping uncover simpler, faster solutions: The U.S. Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E)’s Methane Observation Networks with Innovative Technology to Obtain Reductions Program grants (MONITOR for short), and the Methane Detectors Challenge, led by EDF and industry partners.

Fixing and repairing methane leaks is one of our most pressing climate challenges – and also one of our biggest opportunities. Improvements in methane detection technology will help the oil & gas sector find and fix leaks with the speed we expect in the digital age. In addition, reducing leaks can help clear the air in surrounding communities, and boost the revenue of companies that act quickly to repair them by keeping more product in the pipeline.


Last December, ARPA-E announced $30 million in awards to 11 methane detection innovators, from blue chips like IBM and General Electric (GE), to specialized firms like Rebellion Photonics and Physical Sciences Inc. Grants and assistance from ARPA-E’s MONITOR program will help these companies to accelerate development of early-stage methane detection and quantification technologies for use across the oil & gas supply chain. Here are a few of the funded projects:

  • GE’s project focuses on a novel hollow optical fiber that allows methane to pass through it that can detect methane along its length, allowing for significant flexibility in how it is deployed;
  • Duke University is developing a sensor that can distinguish between methane from different sources, such as agriculture and oil and gas fields, as well as detect other hazardous compounds such as benzene; and
  • Rebellion Photonics is developing a low-cost and portable miniaturized detection system that will incorporate cloud-based data processing that can stream results to mobile devices, allowing for faster notification of leaks.

These investments are a powerful example of government collaborating with the private sector, filling a critical funding gap for core R&D. Across the economy, we’ve seen huge advances and cost reductions in both sensing technology and big data analytics to create actionable intelligence for business of all kinds. The aim now is to unleash that same creative process to reduce climate-damaging methane leakage and product waste.

Methane Detectors Challenge

  • Dalian Actech's infrared laser-based methane detection system
  • RAE Systems/SenseAir's "alco-lock"
  • Quanta3's Dirk Richter preparing equipment for installation
  • University of Colorado Boulder's integrated circuit board solution outfitted with a network of low-cost, commercially available sensors

In parallel with ARPA-E, the Methane Detectors Challenge (MDC), run jointly by EDF and select industry leaders and launched in April 2014, is marching on through technology testing.

With the Methane Detectors Challenge, we dared developers and engineers to design cutting-edge, cost-effective methane monitors that could help the oil & gas industry more quickly detect and ultimately reduce methane emissions. Combined with MONITOR, our project packs a one-two punch of innovation for methane detection, propelling technologies forward at different stages of development.

Through the proposal process and our first round of independent testing, we’ve put five technologies through their paces in a laboratory setting. Four groups’ sensors – Dalian Actech, Honeywell/SenseAir, Quanta3 and University of Colorado – rose to the surface in terms of accuracy, cost considerations and overall promise. The four groups have been invited to a second round of largely outdoor field testing focused on more complete detection systems.

The best performers that meet required specifications are expected to continue on to industry pilots slated for late 2015.

Two Strategies, One Goal

MONITOR and MDC are complementary initiatives. MDC is speeding methane detection technologies that are close to “prime time” today, while galvanizing industry demand for new technologies and monitoring strategies. MONITOR makes longer-term seed investments and provides technical and market support for the breakthroughs of tomorrow. MDC takes a laser focus on oil & gas well pads and compressors, while MONITOR casts the net more widely including pipelines and large area monitoring.

We don’t yet know which of the technologies across the programs will ultimately be transformative, but it’s a strong and diverse field, and this market has room and need for a range of successful approaches. Active participation of partners like Shell on the MDC signals industry demand for the next generation of technology to find and fix methane leaks quickly and cost-effectively.

With two bold efforts to get technologies ready for the market – and this first round of testing showing positive results –we’re headed for game-changing tools to help control this climate super-pollutant.

Further reading:

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.

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Leadership on Sustainability Must Include Helping Shape Smart Policy

This past year, we’ve seen some bold action by companies in what we’ve dubbed the business-policy nexus, and it’s taking several different forms. Some have been calling for state or federal action on environmental impacts, while others are taking far-reaching voluntary efforts that could help support policy advocacy in the future.

Whether you view engagement on public policy as risk mitigation, providing market certainty, supporting corporate sustainability goals or securing competitive advantage, leading businesses are increasingly stepping up their efforts to support smart policy reform that will benefit the environment and economy.

Keeping toxic chemicals out of supply chains

Walmart shopper

Walmart and Target are moving to proactively get harmful chemicals out of their supply chains, even though the nation’s main chemical safety law, the Toxic Substances Control Act (TSCA), is outdated and hasn’t been reformed in nearly two decades.

Earlier this year, our long-term partner in this area, Walmart, took a big step forward by announcing a new sustainable chemicals policy focused on cutting 10 chemicals of concern from home and personal care products it sells. Chemicals of concern – for example, formaldehyde, a known carcinogen – have been found in about 40% of the formulated products on Walmart shelves, including things like household cleaners, lotions and cosmetics. Read more

Investors Voice Market Support for Methane Regulation

banner_gasLast week, financial community leaders took a big step into the intersection of business and policy on the urgent need to curb methane emissions from the oil and gas sector. A group of investors managing more than $300 billion in market assets sent a letter to the U.S. Environmental Protection Administration and the White House, calling for the federal government to regulate methane emissions from the oil and gas sector. The letter urged covering new and existing oil and gas sites, including upstream and midstream sources, citing that strong methane policy can reduce business risk and create long-term value for investors and the economy.

Spearheaded by Trillium Asset Management, the cosigners of the letter to EPA Administrator Gina McCarthy included New York City Comptroller Scott M. Stringer, who oversees the $160 billion New York City Pension Funds, and a diverse set of firms and institutional investors. They spelled out in no uncertain terms that they regard methane as a serious climate and business problem – exposing the public and businesses alike to the growing costs of climate change associated with floods, storms, droughts and other severe weather.

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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.

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Lasers, circuit boards and a $30 sensor: innovative solutions to the methane problem

This post originally appeared on EDF Voices.

The technologies we see today didn’t all start out in the forms we’re used to. The phones we carry in our pockets used to weigh pounds, not ounces. Engineers developed hundreds of designs for wind turbines before landing on the three-blade design commonly seen in the field.


(Missy Schmidt/Flickr)

Fast forward and now we're looking at a drunk-driver-and-alcohol sensor that was converted into a methane leak detector. And a sensor purchased off the web for less than $30 that was transformed into a monitor that fights off greenhouse gases.

I was excited to see the diversity of technologies such as these moving forward in the Methane Detectors Challenge.

Environmental Defense Fund’s initiative with seven oil and natural gas companies—including Shell and Anadarko Petroleum Company, the latest two to join—seeks to catalyze a new generation of technology for finding methane leaks in the oil and gas sector – a powerful contributor to climate change.

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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.

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Changing the Methane Numbers Game

Adding to the drumbeat for action on the supercharged climate pollutant methane, Showtime’s “Years of Living Dangerously” series recently spotlighted methane emissions leaking from America’s oil and natural gas infrastructure.


One theme of the May 19 episode hinged on a numbers question: Just how much methane is getting out? This question, a common one in the methane arena, refers to the national methane leakage rate for the entire oil and gas supply chain.

Various numbers, as low as 1 percent, were suggested for the national average with 4 percent, 11 percent and even 17 percent reported by scientific studies in some oil-and-gas producing regions. The problem is, it’s the wrong question.

We should stop fixating the debate on just how bad the problem is, when we know there is a problem and we can address it with confidence today.

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