Infrared footage of the leak from the Aliso Canyon gas storage facility
After more than four months of spewing potent methane pollution, the massive Aliso Canyon gas leak has finally been plugged. But now the state of California and the utility that owns the site, SoCalGas, are left with the responsibility of ensuring a disaster like this doesn’t happen again.
While Aliso Canyon has captured the attention of the nation, it’s important to remember that there are smaller—and far more prevalent—leaks happening throughout the country’s oil and gas supply chain every day. In fact, those emissions add up to more than 7 million metric tons of methane pollution every year. That equals over $1 billion worth of wasted natural gas at 2015 prices.
Map of leaks around the Porter Ranch area
Methane leaks aren’t just wasteful—they have real impacts on communities. In Wyoming, for example, oil and gas pollution has driven up respiratory illness and smog levels to rival those in famously polluted Los Angeles. In California, residents living near the Aliso Canyon leak have already experienced headaches and vomiting; the long-term health impacts of their exposure to these leaks are a big unknown.
While solutions to detect leaks—like the infrared cameras that made the Aliso Canyon geyser visible to the world—are readily available today, a group of technology developers and oil and gas companies are collaborating with EDF to develop even more cost-effective–and automated–technologies to dramatically speed up leak detection. Read more
As oil and gas leaders converge on Houston for the year’s largest industry conference, CERA Week, falling oil and gas prices are understandably top of mind and a cause for concern for the industry. But there is another decline story underway in industry, one that poses a risk to the future of hydrocarbons in a carbon constrained world – a story of falling trust.
While today’s $30 oil price is disruptive in the short-term, new information on the very low level of public trust in the oil and gas industry should prompt concern from executives and investors about possible longer-term disruption to companies’ social license to operate.
The Industry’s Public Trust Problem
Recent polling conducted by KRC Research for EDF found that a mere 29 percent of Americans trust oil and gas companies to operate responsibly. Strikingly, even among Republicans, the trust rate is under 40 percent.
Digging deeper into the numbers, just 15 percent of Americans trust the oil and gas industry to be accurate in disclosing how much pollution they cause.
So what do these results mean?
They mean that a basic ingredient essential to the long-term viability of any industry – societal trust – is sorely lacking. When 197 nations agree to an ambitious framework and goal to cut greenhouse gas pollution, but very few Americans trust oil and gas operators to even disclose their pollution accurately, a collision course develops. Read more
No one likes uncertainty, least of all investors. From changes in interest rates, to supply chain disruptions, the list of risks investors must monitor is long and growing. Good, actionable information is investors’ most important tool for risk management and integral to successful investing. Without proper data, investors are flying blind.
A new report published by EDF this week throws the spotlight on a growing risk for investors—methane emissions from the oil and gas sector. As so clearly demonstrated by the ongoing and massive leak at Aliso Canyon, methane emissions pose a multitude of expanding risks, with both short and long-term consequences.
Three key risks from oil & gas methane
At 84 times more powerful than carbon dioxide in the short-term, methane emissions represent a potent and fast-emerging form of carbon risk. In a world looking to reduce carbon pollution, methane emissions pose regulatory, reputational and economic risks. Preparedness to comply with forthcoming rules varies across the industry, methane undercuts natural gas’ ability to play a role in a carbon-constrained world, and emissions of methane are lost product amounting to $30 billion a year globally.
Investors should be asking themselves these questions:
- Do you know how much money your oil and gas companies are losing?
- Do you know if they have a plan to reduce emissions to limit impacts?
- Do you know how prepared they are to comply with forthcoming regulation?
It’s difficult to find out, and that’s a problem. Read more
Heath Consultants' methane-measuring drone
Dr. Jason Gu was still a graduate student when he developed the technology behind SenSevere, a start-up that creates laser-based gas sensors for use in heavy industry and power plants. Today, he’s working to apply this technology to methane emissions from the oil and gas industry, making him one of the many entrepreneurs developing solutions to tackle the problem. His fascination with innovation isn’t just making his clients more efficient—it may also be saving the planet.
The hidden cost of methane
Methane, the main component of natural gas, is a powerful pollutant responsible for a quarter of the global warming we feel today. The oil and gas industry releases 7 million tons of it into the atmosphere every year through emissions from oil and gas fields and associated pipelines, resulting in over a billion dollars’ worth of wasted American energy resources. And, toxic chemicals like benzene, a known carcinogen, can accompany methane emissions, posing a potential threat to public health.
“The industry is beginning to become more sensitized to the fact that methane is an aggressive greenhouse gas,” said James Armstrong, president of Apogee Scientific, a Colorado-based methane mitigation company. For more than 15 years, Apogee has manufactured a methane detection system that uses a vacuum and infrared sensors and can be mounted to trucks, ATVs and helicopters to identify leaks in the field. “If you find the leaks and repair them, you’re not only helping the environment…you’re extending the resource.” Read more
Bill Gates, in an interview with The Atlantic, reminded us that if Thomas Edison were alive today, he’d probably recognize a lot of our energy infrastructure – batteries and most coal plants, for example. Gates argued in the interview that we need to drastically speed up the pace of innovation to bring our energy infrastructure out of the Victorian era. But how do we change how we make and use energy? It touches everything we do, but in less than a decade we will be living, working, and traveling differently.
That’s where I – and EDF – come in. I joined EDF this fall after working as a lawyer, consultant and accelerator for business-social collaborations, and I’ve found that it takes all kinds of skills and experiences to set ambitious targets and turn the impossible into the inevitable. From energy retrofits for churches to starting a clean energy incubator with global energy companies, I’ve attacked the challenge of achieving a low-carbon future from many angles. I’ve been drawing on all of that experience since joining EDF, at what’s proving to be an exciting time for climate change leadership.
Methane: a challenge we have to tackle today
One area where we know we have to innovate – like people stranded on a desert island – is methane emissions from oil and gas. Methane is the most powerful greenhouse gas that almost no one has heard of. And more importantly from a climate perspective, methane emissions from the oil and gas industry are cheap to eliminate, if you can find them. The recently-announced regulations on methane emissions from the oil and gas industry won’t take us all the way to the 40-45% reduction in methane emissions the administration has set as a priority. We need action at hundreds of thousands of oil and gas facilities, and that’s just for U.S. onshore oil and gas. Worldwide, methane leaks amount to 8% of global greenhouse gas emissions in 2012, or the equivalent of 40% of the total CO2 emissions from burning coal.
How do you innovate fast enough to attack this challenge? One approach we at EDF have taken with the Methane Detectors Challenge is to identify a need – invisible methane leaks – and envision a tool that didn’t yet exist that could enable the action we need – operators finding and fixing leaks faster. The ultimate goal is to make tools like that a reality, and bring to market continuous methane detection systems that are so affordable they can be deployed throughout the oil and gas supply chain. Read more
What a difference a year can make. Even before the last weeks tick away, 2015 stands out as a remarkable and dynamic year for climate and energy in the United States.
Read on for five bold trends that are beginning to reshape our economy – and our national discourse on climate change.
1. Investments in renewables soar
I admit it: For years, I thought renewable energy was more hype than reality. I’m happy to report that recent data proves me wrong.
In just five years, solar panel prices have fallen 80 percent, and solar capacity installed worldwide grew more than six-fold. The overall cost of solar per kilowatt-hour, meanwhile, plummeted 50 percent.
For the first time in history, energy from the sun is as cheap as traditional energy in states such as Arizona, California and Texas.
The proof is in the pudding. Apple, for example, recently signed an $848-million power agreement with a solar provider – bypassing the electric grid. A deal of this magnitude shows where solar is today, and where it is headed. Read more
People often think of the energy sector as a great place to find jobs, but some of the best, most stable job opportunities in the sector aren’t what you’d think. They’re not dedicated to resource production, but to minimizing the millions of tons of natural gas and associated pollution that leaks as the product is produced and delivered, wasting resources and causing a serious environmental problem.
Each year, more than 7 million tons of methane – the main component of natural gas and a powerful pollutant – escapes from oil and gas operations. These emissions pack the same short-term warming punch as pollution from 160 coal-fired power plants, and equal enough wasted natural gas to heat and cook meals for 5 million American homes.
Companies across the country are already harnessing the power of American innovation to solve this problem, creating new job opportunities in the process. And, a growing trend toward stronger state and federal safeguards to standardize methane reduction best practices is putting more wind in the sails of this growing industry.
Many of the positions being created are skilled, high-paying jobs for workers such as engineers and welders, according to a 2014 Datu Research report on the emerging methane mitigation industry. But these companies need a variety of other positions filled too, from sales to accounting to general labor.
Many of these companies have their roots in traditional equipment manufacturing, such as valves and sealing technologies that keep industrial systems running as efficiently as possible. Others, such as makers of optical gas imaging, are on the cutting edge of new technologies that allow users to identify methane leaks that are invisible to the naked eye. Read more
There is often staunch disagreement between industry and policymakers on how to address pollution. But an event last week convening business leaders, federal and state officials and other stakeholders showed that there’s at least one idea on which they can agree and work together: the feasibility of reducing methane emissions from the oil and gas sector.
Here are four perspectives shared at this event that give me hope we can solve the large, but addressable problem of methane pollution from the oil and gas industry if we take a fact-based, collaborative approach. That would be great news in itself, and powerful precedent for tackling the broader climate opportunities ahead.
Environmental regulations are not a zero sum game. Martha Rudolph, director of Environmental Programs at the Colorado Department of Public Health and Environment, was on the front lines when Colorado proposed the nation’s first direct regulation of methane pollution from the oil and gas industry. At the event, she shared her state’s powerful example of unlikely allies coming together to protect climate and communities in a way that makes business sense.
Instead of tales of industry resistance, she shared a history of business and other stakeholders coming together with state policy makers to formulate and implement cost-effective regulations that will cut 100,000 tons of methane emissions – the climate equivalent of taking over 1.8 million cars off the road. Rudolph reports that the rules have not been challenged in court, and to date, her office had not heard complaints about compliance being difficult or costly . Noble, Anadarko, and Encana supported strong rules at the front end, and even the industry trade associations have rolled up their sleeves and set up trainings to ease rule implementation. Read more
Since the president announced in January a national goal of reducing methane emissions from the oil and gas industry nearly in half by 2025, an outpouring of voices has supported the move. Now, EPA has proposed rules to help meet that target, and we’ve seen another wave of support – everyone from editorial boards in the heart of oil and gas country to massive investors like California’s pension funds has recognized that the rules are a manageable, commonsense means for reducing methane pollution.
The one voice that’s been silent? The companies with the opportunity to adopt the proven, cost-effective technologies and services to not only reduce pollution but also prevent the waste of the very energy resource they’re producing. Now another voice has emerged to make the case directly to these companies that it’s worth constructively engaging in the rulemaking process: the Interfaith Center on Corporate Responsibility (ICCR), a group of shareholders dedicated to promoting environmentally and socially responsible corporate practices.
Several shareholders from ICCR’s coalition sent letters today to dozens of energy companies in which they invest, voicing their concern about the impact of methane emissions on the climate and public health. As You Sow, BCAM, Mercy Investments, Miller Howard, the Sisters of St. Francis of Philadelphia, Trillium Asset Management, and others made their case to companies whose shares they own, including some of the biggest names in the business, like Chesapeake Energy, ConocoPhillips, Exxon, Kinder Morgan, and Valero.
Specifically, the investors asked the companies to file public comments on EPA’s proposed methane rules, sharing the companies’ data and experience with methane monitoring and management and providing perspective on how the methane rules can be designed to reduce emissions cost effectively. They also urged the companies to guide their powerful trade associations –which have been some of the most vocal opponents of the rules – to engage honestly and transparently in the rulemaking process. Read more
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.
When 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: Read more