By Jon Goldstein

Ozone pollution is a growing problem in Utah, both in the state’s urban areas and in largely rural regions where oil and gas development has been directly tied to unhealthy air.

That’s why new draft rules for oil and gas emissions released yesterday are a breath of fresh air for the Beehive State.

These new standards are designed to reduce the amount of smog-forming volatile organic compound (VOC) pollution emitted from both new and existing oil and gas sites across Utah. If strengthened and finalized as soon as possible, these rules will help limit Utah’s smog problem and protect Utah families from asthma attacks, respiratory problems and other health issues.

The rules — drafted by Utah’s Division of Air Quality and approved yesterday for public comment — are a strong start. However, key improvements are necessary if they will have the maximum benefit in cleaning up Utah’s smog problem. These include:

1. Improved leak detection and repair requirements without carve outs for lower producing sites. Numerous scientific studies have shown that frequent leak inspections are one of the best, most cost effective methods to limit oil and gas air pollution. Frequent inspection requirements are also currently the law of the land both federally (though subject to a great deal of uncertainty from the Trump administration) and in neighboring states. Utah’s air deserves a level playing field.
2. Broader applicability to limit “hydrocarbon” pollution more generally (and not just VOCs). By casting a wide net to limit all forms of hydrocarbon air pollution from oil and gas wells, Utah will stay coordinated with federal rules currently in force, help foster additional Utah jobs in the growing methane mitigation industry, increase revenue to the state by capturing more hydrocarbons currently being wasted, and demonstrate the state’s ability to lead as neighboring states like Colorado have done.

An infrared camera reveals leaking methane at an oil and gas facility in Utah's Uinta Basin.

With these new oil and gas rules Utah is joining a growing list of states including Wyoming, Colorado and Ohio that have stepped up to limit this source of pollution and better protect the health of area residents. This is a vitally important issue as the Trump Administration is fighting at every turn to weaken and water down recently enacted methane protections from both the Environmental Protection Agency and Bureau of Land Management.

If strong standards are implemented in Utah, it could deliver significant improvements to the state’s air quality, and reduce the number of asthma attacks and hospital visits that Utah residents undergo as a result of high ozone levels.

Reducing ozone levels is unquestionably a high priority for Governor Herbert and the state of Utah, and the DAQ is wise to make oil and gas emissions a part of that effort. As states like Colorado have shown, provisions that target total hydrocarbons and require frequent leak inspections are proven cost effective pathways to improving air quality and generating increased revenue from oil and gas development.

Image source: Aaron Gustafson, Flickr

By EDF Blogs

By Ben Ratner and Ramon Alvarez, Ph.D. 

Three years ago, Environmental Defense Fund (EDF) united with oil and gas industry leaders including Shell and Statoil to launch the Methane Detectors Challenge – a collaborative effort to catalyze the development and deployment of stationary, continuous methane monitors. With industry pilot projects now cropping up from Texas to Alberta, continuous methane monitoring on natural gas sites is on a pathway to become one of the core tools in the monitoring toolkit.

And that’s a good thing – 24/7 monitoring is the gold standard for emissions control, opening a new frontier in site-level insight. It will enable real time identification and repair of natural gas waste that pollutes the atmosphere, and the industry’s own reputation.

Now, another exciting area of innovation is emerging, as entrepreneurs, technologists, and academics pursue mobile approaches to monitor leaks. Whether by plane, helicopter, drone or truck, mobile monitoring offers the promise of surveying highly dispersed industrial facilities – including smaller and older ones – quickly and effectively. With an estimated one million well pads in the United States alone, the speed and coverage of monitoring matter.

Environmental Defense Fund takes oil and gas operators and local media for a demonstration of mobile monitoring technology from Apogee Scientific

Mobile methane monitoring for some sites could be a perfect complement to continuous monitoring for others, offering a 1-2 punch solution to comprehensively monitor and address emissions across a highly variable industry, with fit-for-purpose tools.

A new collaborative challenge to reduce methane

That’s why we are so pleased to support Stanford University’s Natural Gas Initiative by announcing the Stanford/EDF Mobile Monitoring Challenge (MMC). The MMC is the latest collaborative innovation project from EDF, partnering with Dr. Adam Brandt of Stanford’s School of Earth, Energy & Environmental Sciences, the principal investigator for MMC and one of the world’s leading scientists studying oil and gas methane emissions.

Stanford/EDF Mobile Monitoring Challenge – Now accepting applications →

The aim of the Mobile Monitoring Challenge is to rigorously test and compare the most promising new mobile technologies and approaches to quickly detect and quantify methane emissions – with extra interest in commercially scalable options.

Calling all methane monitoring entrepreneurs

Today begins a 45-day application period for technologists around the world who wish to participate in 15 days of field trials. Stanford and EDF, aided by industry and other expert advisors, will pick the most promising submissions this fall, and Professor Brandt’s team will oversee field testing with controlled releases of methane this winter and spring, culminating in a Stanford paper documenting results for the peer-review process.

Candidates for the Mobile Monitoring Challenge should have methane monitoring technology that:

• Is field ready
• Can be deployed on a mobile platform (e.g. drone, plane, car, truck, etc.)
• Is cost-effective and can quickly detect leaks at multiple sites
• Provides both detection and quantification

See the Stanford/EDF application process for full details.

With subsequent real world testing and demonstration, the leading mobile monitoring approaches coming out of this initiative may even support regulatory compliance, propelling greater emission reductions at even less cost – the classic win/win.

Three years ago, EDF was encouraged to receive dozens of technology applications from around the world for the Methane Detectors Challenge. With the ongoing sensor revolution coupled with the surge in methane emissions interest across North America and the world, we are even more optimistic today about what the future holds.

That’s because at EDF, we know that bringing the right stakeholders together to harness diverse thinking and innovative technologies is the next wave of environmental progress.

Let the challenge begin!

By Renee McVay

EDF Schneider fellow Scott Roycroft co-authored this post

California’s gas utilities have had their share of problems in recent years – so improvements in environmental impacts, operations, and safety are important to track.

In 2014, the California legislature passed a law to require utility companies to publicly disclose data on gas leaks and emissions while working to actually cut those emissions.  Now, three years later, utility reporting has been standardized, an emissions trend has emerged, and the results are significant.

Graphic 1: A depiction of the volume of methane emissions from California utilities between 2015 and 2016. Emissions from the Aliso Canyon blowout are shown as a separate category.

According to the emissions data, from 2015 to 2016, both Pacific Gas and Electric Company (PG&E) and Southern California Gas Company (SoCalGas) have shown a reduction in their total annual emissions of leaked and vented gas.  PG&E was in front, with an 11% reduction of natural gas methane emissions, while SoCalGas — the nation’s largest utility — reduced its emissions by 3%. Together – the reduction in emissions from these two utilities is equal to nearly 700,000 metric tons of CO2e on a 20 year basis.

Even with the reductions though, there is still much room for improvement. Overall, if you exclude emissions from the Aliso Canyon blowout, natural gas utilities across California emitted about 6.2 billion cubic feet of methane — enough to provide natural gas to over 165,000 homes in California for the year. This is gas that customers paid for but is never delivered – also referred to as Lost and Unaccounted for Gas. The top three sources of emissions are customer meter leaks, distribution pipeline leaks, and distribution station leaks. Together, these three sources comprise 73% of total statewide utility emissions – and each have solutions to reduce their pollution.

Graphic 2: A depiction of the source categories of methane emissions from California utilities in 2016. Note: emissions from the Aliso Canyon blowout are not included in this analysis.

A red flag on Grade 3 pipeline leaks

About a quarter of the state’s natural gas emissions from utility systems come from distribution pipelines – and more than half of pipeline leaks are what companies classify as “Grade 3” leaks.  Reason being: since Grade 3 leaks are technically non-hazardous, until now companies have not been required to repair them, regardless of size.

Leak Age (in years) Less than 5 5-10 10-20 20+ Total Leaks 18,333 2,279 468 51

 

Looking at discovery dates for Grade 3 leaks shows just how long companies often take to repair these leaks; according to the data some of these leaks were discovered in the late 1980’s and still have not been repaired. Although some utilities have implied they are committed to repairing these older leaks, real and sustained action is needed to ensure continued abatement of all Grade 3 leaks – action which is required in the state’s new leakage abatement program.

Leak information can be correlated to pipeline materials

Public utility companies keep detailed records of leaks they discover, including date of discovery, geographic location, pipeline material, and pipeline pressure. With the new reporting by utilities, the public has access to information on how leakage correlates to pipe material (for example, older cast iron pipes are more leak prone than newer plastic pipes) and other qualities.

New technologies find greater number of gas leaks

The data also reveals that some technologies are more effective than others at finding a greater number of gas leaks. PG&E uses advanced leak detection technology to locate a large number of Grade 3 leaks, whereas other utilities do not. This partially explains why PG&E is registering more leaks on its system today than in prior years and also likely part of why they may be experiencing larger emission reductions than others. According to recent analyses, leak discovery is expected to increase in coming years as these technologies are more widely adopted.

What can be learned from California’s leak data

Requiring companies to report gas leaks has been instrumental in increasing transparency and sheds valuable insights on the tools and practices that can deliver the biggest emission reductions. And it helps utility customers and consumer advocates learn more about the gas that customers pay for but is emitted into the atmosphere.

As a result of this data, in June 2017 the California Public Utilities Commission (CPUC) started requiring companies to begin the implementation of 26 best practices for reducing emissions – including targeting and scheduling Grade 3 leaks for repair. Once these practices are fully implemented, utilities are expected to reduce methane emissions by 40% by the year 2030.

It’s clear that better leak reporting is a critical part of reducing natural gas emissions. By requiring companies to disclose leak data California is once again demonstrating what climate change leadership looks like and setting a powerful example that other states can follow.

 

By Tim O'Connor

Sophia Brewer, Oil and Gas Intern, contributed to this article.

Since the 1892 discovery of oil in California, the oil and gas industry has been a major economic engine and energy supplier for the state. Although this oil and gas production may be broken down into dollars and barrels, it doesn’t tell the story of the potential impact of drilling activity on the lives of the people in Los Angeles and the Central Valley who live right next to these operations.

While some production sites may be meeting stringent operational and environmental standards, others may not –there simply isn’t data to discern which is which – and that is where monitoring comes in.

Opportunity

The world is experiencing the largest technology and innovation boom in history. Computers, space-age science, the internet, and cloud-based information platforms are making the collection and analysis of data easier than ever before. There’s no reason the gathering and evaluating of pollution data should be any different.

Oil and gas companies like StatOil, Shell, PG&E, and SoCalGas; academic institutions like Stanford and Colorado State University; government agencies like NASA and South Coast AQMD; and several tech companies like Picarro, Quanta 3 Sensit, United Electric Controls, Entanglement Technologies and many more; have demonstrated that it’s now possible to install precise continuous monitors at or around oil and gas facilities to capture real-time data on air pollution at all hours of the day. In some cases, such as natural gas storage sites, monitoring systems are being tested and installed right now under new regulatory requirements. In other cases, companies and communities are installing continuous monitors to provide valuable information about on-site operations issues or to inform neighbors of potential health risks.

A major series of studies is also underway by the state of California, stemming in part from requirements of AB 1496 to evaluate potential methane “hot-spots” in the state and observations of a 2016 Air Resources Board study that demonstrated that nearly half of the leaks at California oil and gas sites have detectable levels of cancer-causing compounds. From these efforts, it is clear that more pollution monitoring is needed to protect the public.

Pollution monitoring has economic, environmental and public health value

Perhaps the clearest example of the value of continuous monitoring can be seen at the Aliso Canyon gas storage field – operated by the SoCalGas Company. Stemming from a well blowout in October 2015, the event cost SoCalGas and its insurance providers over $832 million as of June 30, 2017, with additional costs expected well into the future. Pollution monitors may not prevent massive leaks, but they may act as an early warning system that alert facility operators to the presence of smaller leaks before they grow into bigger problems.

Continuous monitors can also act to empower the public and quell concerns over uncontrolled and unknown emissions. As a result of the Aliso Canyon incident for example, the California Air Resources Board (CARB) required the installation of continuous monitors at all natural gas storage sites in California. With these types of facilities holding vast amounts of natural gas mixed with crude oil residues and pollutants like benzene, the new CARB rule is a testament to the commercial availability of continuous monitors and the value these monitors provide to regulators and the public.

To find another example of the value continuous monitors can deliver, one must look no further than to the 1.3 million Californians who live within a half mile of the 93,000 active oil and gas facilities in the state. And since recent studies suggest a possible correlation between living in close proximity to oil and gas production sites and respiratory complications such as onset asthma and cancer, the public depends on strong regulations, transparent information, and equitable enforcement to minimize the risk of pollution from these sites at all hours of the day.

Well site near a residential neighborhood in Southern California

Continuous monitoring in California can reduce unequal community burdens

In California, nearly 69% of residents living near oil and gas sites are people of color – meaning emissions disproportionately burden these communities. Government agencies and oil and gas operators may not intend for these disparate impacts, but they are none-the-less part of the landscape and local residents often have neither the time, energy, and/or money to stand up to fix these inequalities.

Continuous monitoring for air pollution will foster better transparency between corporations, the government, residents, and customers. Through this improved transparency and resources to evaluate data, in particular in areas where people live and work immediately adjacent to oil and gas sites, monitoring can and will encourage the highest levels of corporate responsibility, more precise and informed engagement by neighbors, and higher levels of effectiveness in government oversite efforts. By investing in low-cost, high precision continuous monitors, oil and gas companies will reduce pollution in the neighborhoods where they are needed most.

Looking forward

While many have a vision of a fossil fuel free world, elimination of oil production isn’t likely to happen any time soon. What is on the horizon though, is technology and data analytics that can better document pollution from the industry and help aim toward consistent environmental responsibility. As a matter of capturing the low hanging fruit, at minimum, high producing sites located next to homes and businesses in disadvantaged communities (like many in the Los Angeles Basin) seem to be a perfect fit for early roll-out of monitors and data evaluation resources that document and result in reduced pollution.

By Ben Ratner

Chevron, the nation’s second largest oil and gas producer, is in the news this week as reports surface that long-time CEO John Watson is expected to step down. It’s no secret that Mr. Watson has too often lagged on his response to climate change. As the board selects a new CEO, it has a chance to turn a new leaf and move Chevron toward the right side of history on climate change, better positioning the company to address investor and social demands for cleaner energy and climate risk management.

Here’s what their new CEO should bring to the table:

A vision for how the company adapts and leads in the low carbon transition

Chevron withheld support for the Paris climate accord even as peers like Exxon and Shell supported it. Opposing the vast majority of the rest of the world is not an economically sustainable posture for a global company –and it creates unnecessary risks for shareholders. The board should select a CEO with a vision to adapt and lead in the transition to a cleaner energy economy. Simply acknowledging the reality of climate change is no longer enough – a 21st century energy leader also develops a sound business plan to navigate that reality and help the global community address one of its costliest challenges.

A strategy to engage constructively on GHG policies in the states and federally

While companies like Noble and Anadarko supported sensible methane protections in Colorado, and some in industry stood quietly on the sidelines or worked through trade associations, Chevron vociferously opposed standards. Years later, we know that the methane standards work by cutting emissions and helping businesses reduce waste and earn their license to operate.

As other states size up the opportunity to tackle methane emissions, Chevron’s new CEO should recognize state-level environmental protections for what they are: an opportunity to demonstrate responsibility and secure progress that investors and customers demand. A compelling CEO candidate will seek appropriate balance in securing short-term cost efficiencies that help margins in a challenging price environment, while also investing in supporting public policy development that furthers license to operate for the longer term, at reasonable cost.

Chevron peers like Exxon and Shell have been recognized for complying with EPA methane safeguards despite regulatory uncertainty, yet Chevron has remained quiet. The new CEO should recognize the value of national protections that create a level playing field. He or she should signal a responsible path in the first 100 days by committing to stay the course with basic, proven controls that keep product in the pipeline.

A commitment to address methane emissions in its global operations

As a global company with a global footprint, Chevron has an opportunity to magnify the positive impact of environmental commitments. Strong CEO candidates will look for tangible, cost-effective actions that show a dedication to reduce Chevron’s global greenhouse gas footprint.

While it’s positive that Chevron reports its baseline emissions and conducts some level of leak detection and repair, investors and other stakeholders have little detail beyond this to understand how the company is managing methane. Also, while Chevron is part of the World Bank flaring reduction initiative, they should also set a quantitative methane reduction target or join others like BP and Statoil in the Oil and Gas Methane Partnership, a UN sponsored initiative to boost transparency and spur best practice adoption to control emissions from top known sources.

As Chevron trumpets its “Human Energy” campaign, it is time to select a CEO who will harness the company’s energy to become part of the climate solution. Shareholders and society stand to benefit.

By EDF Blogs

By Jason Mathers

Amid a sustained slump in sales for natural gas vehicles, a new study highlights significant challenges for these vehicles to deliver on their modest potential of climate emission reductions; the ultimate climate impact of these vehicles rests on the actions and practices of the upstream supply chain, or well-to-pump suppliers.

The central climate-related challenge of natural gas vehicles is unburned methane leaked from the natural gas supply chain, fueling stations, and vehicles. Methane is a powerful greenhouse gas known to be 84 times more potent than carbon in its first 20 years within the atmosphere. A 2015 study in Environmental Science & Technology found commercial fleets converting from diesel to natural gas could lead to greater global warming over the next 50 to 90 years before providing benefits to the climate.

Heavy Truck Emissions Outpace Fuel Stations

The new study, Future Methane Emissions from the Heavy-Duty Natural Gas Transportation Sector for Stasis, High, Medium, and Low Scenarios in 2035, expands the research conducted around methane emissions from commercial fleet vehicles and refueling stations. Led by researchers at West Virginia University, the study used data from the first study published in January to evaluate emissions and explore ways to reduce emissions from the pump-to-wheels portion of the natural gas supply chain with best management practices.

The study presents future scenarios based on vehicles and engines currently under production as these are most likely to populate the fleet in 2035. The four scenarios examined included a stasis scenario based on the performance of the best current vehicle and fuel station technology and high, medium, and low scenarios.

New Practices Outlined for Natural Gas Fleet Operators

One of the more notable new findings in the study is vehicles were found to emit 79 percent of the total emissions compared to fuel stations. Within the vehicles themselves, the engine crankcases were the largest contributor of methane emissions, representing 39 percent of the total emissions from the vehicle.

The sizeable proportion of methane emissions from vehicles creates an opportunity for manufactures and fleet operators managing natural gas fleets to immediately reduce methane emissions by closing spark-ignited engine crankcases and following several recommended methane best practices identified in the study, such as minimizing manual venting of truck tanks before refueling.

Fortunately, spark-ignited engines with closed crankcases have recently been certified by EPA.

While these emission reduction opportunities are important, they are not sufficient in their own to enable natural gas trucks to deliver immediate climate benefits. As it stands right now, the U.S. loses $1.5 billion worth of methane from the oil and gas industry each year.

Methane Footprint Undermines Natural Gas Fleet Benefits

In order to achieve potential climate benefits with natural gas trucks, methane emissions must be reduced across the entire value chain. With this in mind, companies in the midst of re-hauling their fleet operations should focus first on acquiring and up-fitting their trucks to maximize fuel efficiency and secondly, operate them in a manner to maximize freight productivity.

For companies already operating natural gas fleets, methane emissions from both vehicles and trucks should be closely monitored, and operators should adhere to the best practices set forth in the West Virginia University study published this week. Fleet operators should also make strong demands to fuel station operators to ensure they are also following the methane emission best practices, such as meeting minimum throughput requirements and avoiding manual venting.

And as individual states, such as Colorado, California and Pennsylvania move forward with their own methane legislation, and federal standards continue to edge forward despite push-back from the Trump administration, companies with natural gas fleets should advocate for these critical new policies. Support is needed from the commercial sector to ensure well-crafted and common sense methane policies are created in the short-term to drive down methane emissions across the entire natural gas supply chain.

Image source: TruckPR, Flickr

By Matt Watson

Let me first make this important point: I’ve met and worked with a lot of folks in the oil and gas industry who are truly dedicated to making their operations as safe and clean as possible – people who care about the communities they live and work in and who take pride in the reputation of the companies they work for.

That said, I’ve always rolled my eyes a little when I see companies boast in sustainability reports that they comply with all applicable federal and state laws.  Really?  Not breaking the law is the high bar you’re shooting for?

But , as it turns out, one of the nation’s largest oil and gas trade associations is now saying that not only does it oppose common-sense laws requiring companies to reduce their emissions of methane and other harmful air pollution, it’s casting doubt on the extent to which companies should even comply.

The courts have repeatedly struck down efforts by the Trump administration and industry lobbyists to suspend these pollution standards.  And these rules are now in full legal effect.

Yet, in last week’s Inside EPA/Climate, Lee Fuller of the Independent Petroleum Association of America (IPAA) is quoted saying that the court’s rejection of these efforts makes compliance “an EPA enforcement issue, and we have had no guidance from EPA on the enforcement process that they will undertake.”

There should be no confusion here. Compliance is not an enforcement issue. Compliance is a legal obligation. Any company that refuses to meet that obligation is operating outside of the law, regardless of how EPA decides to approach enforcement.

Cries that companies haven’t had enough time to get ready for these standards also fail to pass the straight-face test.  These rules were issued in June 2016 and gave the industry a full year to start taking basic steps to detect and repair leaks – using cost-effective techniques that were pioneered in the states and which have long been in use by leading oil and gas operators.

In fact, operators were required to conduct their first leak surveys at well sites and compressor stations by June 3, 2017, several days before EPA’s unlawful 90-day suspension of the standards was published. Any company that wasn’t implementing these find-and-fix practices was breaking the law then.  And any company that isn’t complying since the court ruled the suspension illegal is violating the law now.

Some in industry have bemoaned the cost and confusion of “regulatory uncertainty” as the Trump EPA attempts to roll back basic public health and environmental protections and the courts time and time again rule those efforts illegal. Even now, EPA Administrator Scott Pruitt – backed by players who represent industry’s lowest common denominator – is attempting another delay of the methane rules, this time for two years.

If the industry is truly worried about regulatory uncertainty, trade groups and the industry lobby should stop litigating against these vital protections, cease sowing doubt about their legal effect and urge Scott Pruitt to abandon his lawless efforts to undermine them. The chaos they bemoan is entirely of their own making.

It’s worth noting that not everyone in industry is playing that game.  Leaders aren’t throwing up smoke screens and dodging the issue, they’re moving forward.  In fact, both Exxon and Shell confirmed their compliance with the operational requirements of the methane rules even before the 90-day stay had been overturned by the court. That’s the kind of responsible action that’s not only good for communities and the environment, it’s good for business – in terms of both bottom-line and reputation.

As I said at the outset, I know a lot of good people in the oil and gas world – people who don’t like the turn things have taken in D.C. and who know that any short-lived upside will pale against the backlash this industry will face at home and abroad if it’s seen as doing nothing but fighting against the shift to a cleaner, lower-carbon future.

It’s time for leaders in industry to step out from behind the shadows.  If the IPAA’s of the world are allowed to speak for everyone, companies that are trying to do the right thing will be tagged as retrograde thinkers right along with them. Instead of proving that they can evolve, adapt and be part of the solutions demanded by and owed to both their host communities and the planet, they’ll be riding a side-car to obsolescence.

By Jon Goldstein

Be Prepared. It’s not just the Boy Scout motto, it’s also the way most smart businesses try to operate. Better to anticipate future compliance issues today and bake them into your forward planning, than to be caught flatfooted tomorrow.

That is a big part of the reason major multinational oil and gas producers like ExxonMobil and Shell have said they are already following methane pollution rules finalized by the U.S. Environmental Protection Agency last year. Despite EPA Administrator Scott Pruitt’s best efforts to delay implementation of these rules, the courts have repeatedly ruled in favor of their speedy and complete implementation.

Most recently the DC Circuit last week rejected the latest attempt to undermine methane pollution limits for sources in the oil and gas sector and put those standards into full force and effect. It’s a decision that shows the wisdom of ExxonMobil’s and Shell’s strategy to lean in on regulatory compliance (and highlights the danger for other oil and gas producers that seem to be content dragging their feet and exposing their investors to compliance risk).

A second policy shift last week again underlines the benefits of proper prior preparation from the oil and gas industry. Last Wednesday, the Pruitt EPA withdrew its attempt to extend the deadline for compliance with the new, more protective, health based standard for ground-level ozone, commonly known as smog. This decision came one day after a coalition of 16 state Attorneys General joined a lawsuit challenging the delay (EDF and partners also challenged the delay). This means that EPA will now again have to meet an Oct. 1 deadline for determining which areas of the country fail to meet healthy air standards.

This ozone decision is terrific news for residents of areas that struggle with smog pollution tied to under-regulated oil and gas development. With this decision, EPA and states should now have the impetus to continue working on a more expedited timeline to reduce oil and gas pollution and restore healthy air.

It’s also a workable development for the forward thinking oil and gas companies since compliance with EPA’s methane rules will also help reduce the emissions that lead to the formation of unhealthy smog. By thinking ahead on methane, these producers have also put themselves in a better position to address smog problems.

There is a real danger for the oil and gas industry in this era of federal regulatory uncertainty. By pushing the pendulum so far toward deregulation, the worst actors in oil and gas may find themselves creating the very regulatory confusion they and their investors loathe. But you don’t have to take our word for it, as Kevin Book Managing Partner with ClearView Energy Partners recently told Pamela King of E&E News, “If the Trump administration veers more toward a 'rip it up' approach to rulemaking, the implication could be that uncertainty limits future investments."

A stable regulatory environment, investment certainty and cleaner air. Addressing methane is the smart move for the oil and gas industry no matter how you look at it.

By Aileen Nowlan

This week, the oil and gas giant Shell took a positive step toward addressing methane emissions. The company announced a new technology trial at a wellsite in Alberta, Canada, where it is piloting a specially designed laser to continuously monitor emissions of methane, a powerful pollutant known to leak from oil and gas equipment.

The move by Shell is a glimpse into the future and demonstrates growing market interest in smart, sensor-based methane detection technology. Shell’s project joins a similar field test already underway in Texas, operated by the Norwegian producer Statoil, and a California utility pilot run by Pacific Gas and Electric Company.

Each of these deployments is promising, but the ultimate test will be broad-scale adoption of innovations that generate actual methane reductions.

For industry, there is an incentive to move ahead. An estimated $30 billion of natural gas (which is largely methane) is wasted every year due to leaks and flaring from oil and gas operations worldwide. In addition, roughly 25 percent of global warming is driven by methane. Oil and gas methane emissions also contain chemicals that adversely affect public health.

For these reasons, methane is a problem that has caught the attention of regulators, investors and consumers alike. Advancing new technologies to enable the oil and gas industry to tackle this challenge more efficiently is key, even as companies use established tools to manage emissions now.

Collaborations Spark Methane Innovation

When you bring the right people to the table, innovative solutions will follow. Behind the Shell, Statoil and PG&E demonstration projects is a collaborative initiative, the Methane Detectors Challenge, begun by the Environmental Defense Fund four years ago. The project united eight oil and gas companies, R&D experts, and technology innovators in an effort to accelerate the development of next-generation methane detectors.

The formation of this project was motivated by a key insight: new technology to manage emissions needs to be created and deployed faster than ever. The Methane Detectors Challenge offers a unique resource to innovators – access to real facilities and collaboration with potential customers – which is essential to help entrepreneurs understand the market, demonstrate demand, and ultimately achieve economies of scale.

Both the Statoil and Shell pilots are using a solar-powered laser, created by Colorado-based Quanta3. The technology uses the Internet to provide real-time data analytics to wellsite managers via mobile devices or web portals.

Continuous Visibility, Faster Response

The oil and gas industry has a lot to gain from smart methane sensors that can prevent the loss of valuable product and reduce pollution.

Imagine a future where continuous leak detection systems allow operators to digitally monitor methane emissions occurring across thousands of sites. It’s a game-changer on the horizon. The burgeoning field of continuous methane monitoring offers a range of possibilities – including technologies capable of identifying emission spikes in real-time, allowing operators to cut mitigation time from months to days. Over time, smart sensors on wells may even help predict and prevent leaks and malfunctions before they occur.

Smart Methane Sensors Triggering New Market

The methane-sensing laser deployed by Shell and Statoil is one of many technologies in the emerging methane mitigation industry. In North America alone, more than 130 companies provide low-cost methane management technologies and services to oil and gas customers – a number likely to expand as innovators innovate, pollution requirements tighten, and producers increasingly appreciate the urgency of dealing with methane to maintain their social license to operate.

Smart automation technologies are already being used across the oil and gas industry to improve operating and field efficiencies. Continuous methane detection technology is the next logical step, which has the potential to provide significant economic, environmental and societal benefits.

The Shell pilot is a milestone to celebrate and we recognize the company for its early leadership. Now, we need governments and industry to show the determination needed to meet the methane challenge head-on. Sustained leadership is a prerequisite. But the keys to solving this problem are smart policies that incentivize ongoing innovation, and clear methane reduction goals—supported by technologies like continuous monitoring.

Image source: Shell/Ian Jackson

By Drew Nelson

This week, oil and gas giant Shell announced the launch of a technology pilot at one of its shale gas facilities in Canada that will continuously monitor methane levels and provide real-time leak detection to facility operators. This is a big deal and shows what can happen when companies, environmental groups and innovators work together to find solutions.

The pilot is a product of the Methane Detectors Challenge (MDC), a partnership involving EDF, eight oil and gas operators, technology developers and other experts that aims to spur next-generation solutions that can help the oil and gas industry find methane leaks more efficiently and effectively.

Shell is not alone. Other MDC participants include Statoil, which launched a pilot in Texas early this year, and Pacific Gas & Electric Company, which began a pilot in California in 2016. But the Shell project at Rocky Mountain House is the first MDC technology to be deployed in Canada, where the federal and key provincial governments are both developing regulations that will reduce oil and gas methane emissions.

The timing of this test in Alberta couldn’t be better.

First, the deployment of another MDC pilot demonstrates that environmental organizations and industry can and do work together to find innovative solutions. EDF has a long history of working with companies to reduce their environmental impact, and we’re taking that same approach to address the global methane challenge.

After all, it is in the interest of both industry and the public to reduce methane, a powerful pollutant responsible for about 25 percent of today’s climate warming. The International Energy Administration has said that “the potential for natural gas to play a credible role in the transition to a decarbonised energy system fundamentally depends on minimising these [methane] emissions.”

Without methane reductions, industry can’t claim that natural gas is part of the climate solution. Tackling this issue also reduces harmful air pollution and minimizes needless energy waste (natural gas is mostly methane).

Second, the pilot illustrates how new technology can unlock potential that can  bring improved efficiency to the global methane challenge. Today, there are already technologies that, combined with consistent inspections, can detect methane leaks effectively and affordably. All jurisdictions regulating oil and gas methane in the United States require that companies make quarterly leak inspections of some kind. Quarterly inspections are currently regulatory “best practice,” and many other stakeholders are actively encouraging the federal and Alberta governments to adopt this frequency. But even quarterly inspections can allow leaks to persist for months.

The goal of continuous remote detectors, like the one used in Shell’s pilot, is to provide constant visibility to operators, allowing more sites to be digitally monitored and increasing the odds of finding leaks as they occur. Leaks found sooner reduce emissions faster and conserve more valuable product.

Third, the MDC pilots underscore the economic opportunity of producing cleaner energy. An analysis by ICF International shows that oil and gas companies can significantly reduce their emissions using low-cost solutions already on the market. In Canada alone, there are more than 180 methane detection companies – some are developing new technologies, some are already in the oilfield.

Regulations send an important message to these companies that their products, services and innovations have a long-term market. By moving ahead with strong methane rules that require frequent leak detection, Canada and Alberta will help its innovators tap a growing international opportunity.

Shell’s methane tech pilot is a clear demonstration of leadership.  And, while EDF and Shell don’t agree on everything, we’re optimistic that with continued cooperation, we can pave the way for innovative solutions that will be a win-win for industry and the environment.

Image source: Shell/Ian Jackson

By Felice Stadler

EPA Administrator Scott Pruitt has been trying every trick in the book to suspend rules that require oil and gas companies to limit pollution from their operations as they look to expand drilling across the country. His attempted delay tactics follows a cozy relationship he’s had with the worst elements of the oil and gas industry in his prior role as Attorney General of Oklahoma, where he sued to block these very rules on the behalf of his oil and gas allies.

Following a historic court decision and subsequent mandate, EPA’s New Source Performance Standards (which set first-ever national methane pollution limits for the industry) are now in effect. However, Administrator Pruitt continues to push to delay these standards with a proposed two-year suspension. The impact of this action is sweeping: Hundreds of thousands of Americans live near the 23,000 oil and gas wells that should be covered by these rules.

The senseless delays of common sense pollution standards have major implications for the health and welfare of communities living downwind of oil and gas development in the U.S. Here’s why:

There is a lot of oil and gas drilling happening.

EPA’s new pollution rules apply to all wells built or updated since September 2015. Over 1,000 wells a month (on average) have been built or updated during this period; each new drilling operation can lead to more methane pollution, more smog pollution, and more cancer-causing pollution.

They also lead to more wasted American energy since methane pollution is essentially natural gas leaking into the atmosphere. Methane leaks and other intentional releases from oil and gas operations nationwide in 2015 could have met the heating and cooking needs of over 5 million American homes.

 

Oil and gas drilling is happening without common sense oversight 

Oil and gas drilling is happening all across the country, with new wells dotting the landscapes of nearly two dozen states (click here to find out if you live near one of the new 23,000 wells). While some operators are complying with pollution limits set by the state – like in Colorado, which has in place statewide methane standards – the majority are operating without any methane pollution requirements, where the only thing in place are the suspended federal standards.

That’s the case in Texas, where there are over 6,500 new and modified wells, or Oklahoma with almost 2,000 new and update wells. In these states, oil and gas companies have no accountability for their methane pollution, and communities are left to bear the burden from this energy development.

As we know, however, air pollution does not respect state lines, so even Coloradans will pay the public health price for not having federal standards in place, as pollution drift can drift over from New Mexico, Utah, and other nearby states.Regulatory chaos leads to environmental uncertainty

The Trump administration, and its allies in Congress, has been sending signals to the oil and gas industry since the day after the elections that rolling back environmental protections was their top priority. The industry also knows that this decision does not just lie in the hands of the administration, but rather in the courts, which is where the fate of the oil and gas methane rules now sits.

Regulatory uncertainty often leads to industry delaying investments in new technology or practices, which only delays providing much-needed public health protections and seeds distrust in energy development.

Despite these rules being highly cost-effective to implement, few top energy operators have made public statements indicating that they will comply with the rules. Regardless of the regulatory chaos, proactively taking steps to address pollution isn’t just the right thing to do; it also manages reputational risk and positions companies for future compliance as rules tighten.

It’s unfortunate that more companies haven’t publicly come forward in staying the course for cutting methane rather than accepting the Trump free pass to pollute. The public is left to assume that communities all across the country are likely left unprotected and exposed to the release of thousands of tons of methane and toxic pollution.

Majority of Americans demand protections  

During EPA’s only public comment period on the proposed suspension of its pollution rule, only two stakeholders out of 118 supported EPA’s move including the nation’s main oil and gas lobby, the American Petroleum Institute. The other 98 percent representing public health groups, businesses, tribes, Latino communities, ranchers, and others spoke opposition to the delay, sharing their experience of what it’s like to live adjacent to or downwind of the expanding oil and gas development that’s occurring nationwide.

Citizens came from vastly different regional, political, and religious backgrounds with one shared goal: to express their frustration and concern about EPA’s latest action to undo public health protections for the nation’s largest polluters.

Members of Moms Clean Air Force ask Pruitt to cut methane pollution at recent EPA hearing

As Elizabeth Chun Hye Lee of the United Methodist Women said at the hearing: “How many more children must suffer before EPA says enough?”

EPA’s comment period for the public to weigh in on this senseless two year delay is coming to a close. The public doesn’t want more pollution and it’s important that Scott Pruitt hear that message loud and clear. Make your voice heard.

Sources for well data: Drilling Info, DI Desktop 

By Drew Nelson

Canada’s move to reduce methane emissions from its oil and gas sector passed another milestone this week, as the deadline passed for stakeholders to submit comments about the proposed regulations to Environment and Climate Change Canada (ECCC). EDF issued extensive comments commending ECCC for moving forward, but urging decision makers to address some critical weaknesses of the draft rules.

EDF is not alone in this thinking. A group of investors from Canada, US, and Europe, which together represent $89 billion CAD in investments, released a synopsis of their comments. Many leading Canadian NGOs, including the David Suzuki Foundation, the Pembina Institute, Environmental Defence (no relation to this EDF), Equiterre, and the Blue Green Alliance, also issued a press release urging ECCC to improve and strengthen the draft regulations.

As Canada’s effort to regulate this potent greenhouse pollutant continues, EDF is focused on ensuring Canada takes advantage of low-cost reduction opportunities, which have the added benefit of improving air quality, eliminating waste, stimulating innovation, and creating jobs. For that to happen, the country’s draft methane regulations need to be strengthened.

Here are four ways that can happen:

1. Fix the Timeline

In the days before the draft regulations were released in May, the oil and gas industry successfully lobbied government officials to delay implementation of the regulations by as much as three years. This would result in the release of an estimated 55 million additional tons of methane compared to the original timelines. Delaying key provisions for five years is excessive and inconsistent with how – for example – US jurisdictions have regulated methane. We urged ECCC to reset the timetable so the regulations begin in 2019 (not 2020) and full implementation occurs by 2022 (not 2023).

1. Require Quarterly Leak Inspections

Because methane is invisible and odorless, and many leaks are intermittent, it’s nearly impossible to find methane leaks unless you’re looking for them. Canada’s proposal calls for leak inspections only three times a year; we urged EEEC to implement inspections four times a year instead. This may seem like a minor detail, but the effectiveness of any detection requirement is better with greater frequency. In fact, the International Energy Agency has said “tracking and fixing these [methane] leaks – which can be short-lived and intermittent – requires a systematic effort of measurement, reporting and monitoring, backed up by effective regulation. More regular inspections mean better odds of catching serious but intermittent problems. Across the United States, regulatory best practice is four times a year. Canada’s rules should follow this industry best practice.

1. Reduce Venting

Unlike leaks, venting is the intentional release of methane, and ECCC has proposed regulations that will significantly reduce venting across Canada. That’s great, but the proposed rules include exceptions and loopholes, and still allow for venting. In recognition of the availability of technologies that eliminate venting, leading U.S. jurisdictions increasingly prohibit venting. Strengthening the venting provisions will ensure that Canada is in line with regulatory best practices on venting.

1. Ensure “equivalent” really means equivalent

Canadian law allows provinces to develop their own regulations and have those regulations take place instead of federal regulations if there are “provisions that are equivalent to a regulation.”  We urged ECCC to ensure that any equivalency agreement show that equal or greater reductions are achieved. If a province’s rules don’t achieve the reductions the federal rules would, they shouldn’t be considered “equivalent.”

These are simple, commonsense steps that are squarely consistent with the goals and intent of the policy, which can make implementation faster, cheap and more effective. We hope the Canadian government will consider these opportunities as they review public comments. Final regulations are expected late this year or early next.

Image source: Flickr user davebloggs007

By Tim O'Connor

In early 2016, southern California awoke to the harsh reality that reliable operation of the regional energy system might be tied to a single aging natural gas storage field called Aliso Canyon, where a catastrophic blowout that started the previous October was not closed until February. So while Southern California Gas Company got to work to repair the facility, several government and private institutions also went to work assessing whether the facility was actually needed in the first place.

Last week multiple state agencies issued a verdict that Aliso Canyon is now safe, and giving the green light to increase the gas stored in it on a limited basis. The decision caused an outcry from nearby residents, but it should also be a concern for utility customers throughout the region.

But what if we don’t need the facility at all? Why take the risk? The latest analysis strongly suggests we don’t have to.

Policy is clear

After the massive leak, state elected officials passed a piece of legislation, SB 380, writing into law a preference for minimizing or eliminating use of the Aliso Canyon natural facility so long as the region could maintain reliable gas and electric service. Even if Aliso Canyon could be operated safely, the law is clear that closure should be the course of action if those conditions hold.

In support of this policy, last week, in a statement apparently timed to correspond with the safety finding, California Energy Commission Chairman Robert Weisenmiller said that:

“Governor Brown has asked me to plan for the permanent closure of the Aliso Canyon natural gas storage facility…a plan to phase out the use of the Aliso Canyon natural gas storage facility within ten years…I am confident that through sustained investments in renewable energy, energy efficiency, electric storage technologies and other strategies, we can make this transition a reality.”

How much storage is required?

Aliso Canyon is one of several underground storage facilities that supply gas to the region’s electric generating plants, as well as direct household and industrial uses. The answer to whether it’s necessary depends entirely on the timeframe evaluated (e.g. needed over the summer, for next winter, at any point in the next 10 years, etc.) and the actions California takes — or doesn’t take — during that time.

On one side of the debate over need, SoCalGas has long argued that Aliso canyon is needed to maintain reliability in both the short and long term. Studies by state energy agencies mostly support that assertion – in particular for the short term. As recently as last week, for example, the California Public Utilities Commission (CPUC) released figures saying that Aliso Canyon needs to hold about 23 billion cubic feet of gas (roughly 28% of capacity) to ensure reliability in the case of other gas outages.

On the other side though, analysis shows the utility and state estimates may be overblown. For example, a detailed set of comments and examination filed by EDF (prepared with assistance from Skipping Stone LLC) with the Commission yesterday strongly suggests that the facility is likely not needed – either in the immediate timeframe or in the next 10 years.

This analysis shows that demand previously met by Aliso Canyon can be supplied by a combination of gas already being imported from out-of-state or available at other existing storage fields, combined with sensible policies like gas market refinements that reduce the overall need for storage sites like Aliso canyon.

With a storage volume of nearly 50 billion cubic feet in three neighboring storage fields, and the ability to rapidly charge and discharge, the study says that SoCalGas can deliver more than sufficient quantities of natural gas into southern California on a moment’s notice, and refill the reserves in a matter of days. If these fields are maintained between 70% and 80% full, according to Skipping Stone, maintaining overall energy reliability is not an issue.

Reducing Dependence

Skipping Stone and EDF also said that new forecasting policies can improve overall reliability without Aliso Canyon. If California requires SoCalGas and other parties using gas in the region to do a better job predicting demand ahead of time and aligning gas purchases with those projections, the need to keep inventory stored in these facilities for reliability will be dramatically reduced.

Therefore, rather than providing seasonal assurance and opportunities price arbitrage as it does today, existing capacity can be streamlined to support real-operations and needs of the energy system, leaving more than enough extra capacity on the system to ensure reliability even in extreme circumstances.

A public process will have the final say

On August 1, 2017, the CPUC will hold a public meeting to continue research and modelling necessary to look at the short term and long term need of the facility – and the overall process is expected to take a full year.  What is clear from this process– even if the facility is found to be safe – is that the need for Aliso Canyon (and any policies the state can pursue to minimize that need) must be incorporated into any decision about its long-term future.

By EDF Blogs

By Ben Ratner and Michael Maher

This post originally appeared on Forbes.

Recently, at an oil and gas industry event co-hosted by Energy Dialogues and Shell in Houston, Ben Ratner, a Director at Environmental Defense Fund, met up with Michael Maher, presently with Rice University’s Baker Institute for Public Policy and a former longtime economist with ExxonMobil, to discuss the future of the natural gas industry. Specifically, they talked about the growing divide between those—in government and in the industry—who want less environmental regulation, particularly over the issue of methane emissions, and those who see sensible regulation as the best way for the industry to assure its future as offering a cleaner alternative to other, dirtier, fossil fuels.

Since Michael and Ben met in Houston, the Trump Administration announced the U.S. departure from the Paris climate agreement and postponements and potential weakening of methane emission rules from the Environmental Protection Agency and Bureau of Land Management. These new developments put the industry divide into sharper focus.

States could now step up to address issues that the federal government was poised to take the lead on under rules promulgated by President Obama toward the end of his term. But will states act without industry prodding or at least, support for action? And will companies most worried about license to operate intervene against delays, weakening, or even elimination of nationwide standards? Mike and Ben discuss below.

Ben: As a former oil and gas industry employee, how do you think the industry should respond to the regulatory rollbacks of the Trump administration?

Michael: This administration is moving rapidly away from a federal role in climate change policies. The question for the oil and gas industry is whether to sit back and coast on the federal failure to act or to work with states to address greenhouse emissions. Coasting may look like a cost saver for the near term, but the pendulum will eventually swing back, and a reversal of Trump’s policies is a real prospect down the road. However, if enough states—with industry support—were to effectively address methane emissions it could provide guidance for federal action down the road and protect the industry against the reputational damage of being seen to have resisted sound environmental regulation.

Michael: In the current political climate, what do you see as the role of leading companies?

Ben: The great irony here is that while the Trump attacks on environmental standards are intended to help industry by reducing costs in the short term, they may end up inflicting much greater long-term damage. A classic case of “short term gain, long term pain.”

Energy consumers, institutional investors and citizens want cleaner energy, and scrapping rules that help the industry clean up may ultimately endanger the industry’s social license to operate and make it more difficult to do business. So we will be looking hard to see which companies step forward to slow down the deregulatory torrent that is tarnishing the industry’s reputation just as demand for cleaner energy is lifting off.

In recent days, Shell and Exxon reportedly stated that they are complying with EPA’s contested methane rules, but other companies have stayed silent. Companies like ConocoPhillips and BP voiced their support for the Paris international climate agreement. With the U.S. now withdrawing from the Paris accord, will companies like these make good on addressing climate change by publicly supporting policies aimed at reducing methane emissions? We haven’t seen true industry support at the federal regulatory level, at least not yet.

At the same time, regardless of what happens in Washington, states have a golden opportunity to develop their own methane policies. In Colorado, for example, companies like Noble Energy and Anadarko worked with EDF and the state to negotiate methane and air pollution standards that work for business and the environment.

Industry played a vital role in Colorado’s success, and there will be more opportunities for industry leaders to participate in regulatory development in other states.

Ben: Are there business and reputational impacts of failing to address methane emissions?

Michael: Natural gas has historically competed with other sellers with other fuels almost totally on price. But customers and officials are increasingly looking at energy options based on environmental benefits and not just price. There is a robust debate in the Northeast, for example, about how to move forward in decarbonizing their electric power system and it is not focused solely on the costs of alternatives.

In this regard, it is in the interest of the natural gas industry to be able to promote natural gas as a much cleaner alternative to coal. But methane and associated emissions from natural gas drilling operations cloud that cleaner-than-coal claim and plays into the hands of those supporting a more rapid shift to renewables and who argue for “keeping it in the ground.”

Michael: How does EDF view methane control as part of a company’s social responsibility?

Ben: How a company manages its natural gas leaks tells you a great deal about how responsible it is, because leaks cause climate damage and can harm people’s health—especially among the most vulnerable, like children and the elderly. Also, since methane is a commercial product, if a company doesn’t know or care how much of its own product is going into thin air, that’s not a good sign.

Southwestern Energy is one example of a leader that sets a methane target, conveys to its people the value of methane management, and implements leading practices in the field. Another is Statoil, which is working with EDF and an entrepreneur to pioneer efficient new automated methane monitoring technology. These kinds of efforts can deliver financial value by recouping lost product, and demonstrating to investors, communities and other key stakeholders their lived commitment to responsible corporate behavior.

Ben: How do you see the industry tackling the methane problem?

Michael: Farsighted, well operated companies are already taking action to cut emissions, but sometimes the policy advocacy lags behind. There needs to be leadership on this issue from major players—not just singly but as a coalition urging federal agencies to retain or improve rules, rather than delay or weaken them. This coalition should also engage states in developing sound regulation of new drilling and older wells.

Some in industry are already pushing ahead with testing new technology that would reduce the cost of controlling emissions. That effort should continue, but voluntary action of this sort is not a replacement for regulations that apply across the entire industry. Nor will piecemeal voluntary efforts of a few overcome the stigma of hundreds of other companies abstaining from action to reduce their methane emissions.

Michael Maher is a senior program advisor at the Center for Energy Studies at Rice University’s Baker Institute for Public Policy

Ben Ratner is a Director with EDF+Business at Environmental Defense Fund

By Adam Peltz

More than a year and a half after the Aliso Canyon natural gas storage facility caused more than 100,000 tons of methane to leak into the atmosphere – amounting to be our nation’s largest-ever gas leak,  California regulators continue to labor away at improving the rules  that could prevent another gas storage disaster.

That leak was a wake up call to regulators around the country charged with protecting workers, people and the environment from gas storage facility accidents.  

In early 2016, California implemented some “emergency” standards for the state’s gas storage facilities, and is currently in the process of developing a more permanent solution through a rulemaking with the Division of Oil, Gas and Geothermal Resources (DOGGR), which just wrapped up its public comment period.

It is widely accepted that more oversight and smarter management of gas storage facilities can go a long way to prevent another disaster from happening. Adopting a few key improvements to the leading standards in the current rulemaking will give California the most robust, protective gas storage regulatory program in the United States.

A smart and successful natural gas storage program must include proper risk management and emergency response planning. That’s a lot of the secret sauce right there. These plans should outline the risks each facility faces, the practices and procedures for reducing those risks, and the playbook for dealing with problems. If California gets that right – along with a number of targeted rules on well integrity, monitoring and maintenance — the state will be in good shape to deal with whatever lies ahead.

California can and should be a leader on gas storage regulation in the United States. Many jurisdictions, the federal government included, are looking closely at their gas storage rules in the wake of the Aliso Canyon disaster, and California’s experience will have a huge impact on how this issue is handled at the 400+ gas storage facilities around the country. If California gets this right, it will help reduce safety and environmental risks from gas storage nationwide.

By Sean Wright

Institutional investors worldwide are increasingly encouraging oil and gas companies to improve and disclose their management strategies to minimize methane risk.

Methane – an invisible, odorless gas and main ingredient in natural gas – is routinely emitted by the global oil and gas industry, posing a reputational and economic threat to portfolios.

Natural gas is widely marketed as a low-carbon fuel because it burns roughly 50 percent cleaner than coal. But this ignores a major problem: methane. Natural gas is almost pure methane, a powerful pollutant that speeds up Earth’s warming when it escapes into the atmosphere.

Last month marked a significant milestone in investor action on the methane issue. The Principles for Responsible Investment (PRI) launched a new initiative representing 35 investors and U.S. $3.8 trillion in assets that will engage with the oil and gas industry across five different continents to improve its methane management and disclosure practices. The PRI initiative complements existing methane engagement efforts focused on the U.S. led by the Interfaith Center on Corporate Responsibility and CERES.

EDF Senior Manager Sean Wright recently sat down with Sylvia van Waveren, a Senior Engagement Specialist with Robeco Institutional Asset Management, a Dutch-based investment firm managing over $160 billion, to discuss the matter and understand why some investors are keen to affect the status quo on methane.

Wright: Why is methane a focus of your engagements? What do you see as the risks of unmanaged methane emissions?

Sylvia van Waveren, Senior Engagement Specialist, Robeco Institutional Asset Management

van Waveren: Methane is one of the most important drivers of engagement with the oil and gas industry. We invest in oil and gas companies worldwide. A year ago, we started engaging them, specifically on climate change – and within that the methane issue is included.

In the past, methane was viewed as a U.S. shale gas issue, but more recently it has become important in Europe as we learned that methane is a powerful greenhouse gas. So in that sense, we learned a lot from the U.S. discussions and we still do.

I would like to stress that we see the methane issue more as a business opportunity than a risk. What we often say to companies is that methane is a potential revenue source. It would be a waste if companies do not use it. 

Wright: The scope of PRI’s initiative is global, with investors from 3 different continents as far away as Australia and New Zealand, and a plan to engage with companies from the Latin America, Europe, North America and Asia-Pac. What does this level of global collaboration convey about methane emissions? 

van Waveren: I am happy and it is good to see that others have taken up the seriousness of this issue, as well.  Methane is no longer a U.S. only problem. The issue is being raised and discussed in all kinds of geographies.

I’m a firm believer in collective engagements. They can be a powerful force when the issue is not contained within borders. That is the case with greenhouse gases. So yes, I’m happy to see the PRI initiative taking off and I am an active believer in getting this solved and bringing attention to this subject.  

Wright: In your conversations thus far with companies about methane, what resonates best when making the business case for improving methane management and disclosure?

van Waveren: When we talk about motivation at the company level, I have to be honest, it’s still early days. The European companies are talking in general terms and just now conceptualizing methane policies. If we’re lucky, they have calculated how much methane is part of their greenhouse gas emissions. And if we’re more fortunate, they are producing regional and segregated figures from carbon, but it’s really very meager how motivated the companies are and what triggers them most.

I really feel we should emphasize more with companies to get them motivated and to really look at the seriousness of methane. One issue that is particularly bothersome is that many companies do not know how to calculate, estimate and set targets to reduce methane. It is still a mystery to many of them. That’s why we come in with engagements. We need to keep them sharp on this issue and ask them for their actions, calculations and plans. 

Wright: Who are other important allies that have a role in solving this problem, and why?

van Waveren: We always would like to have an ally in the government. For example, carbon pricing or carbon fixations are all topics that we look for from the government. But in practice, that doesn’t work. Governments sometimes need more time. So we do not always wait for the government. When companies say they will wait for government, we say, “You should take a proactive approach.”

We rely very much on our knowledge that we get from within the sector. We review data analyses and make intermediate reports of scoring. We find best practice solutions and we hold companies accountable. There are also times when we name names. So in that sense, that is how engagement works. The data providers and other organizations with good knowledge and good content on methane – and EDF is certainly one of them – are very instrumental to get the knowledge that we need.

Wright: Can you give me an example of a widespread financial risk facing an industry in the past that was proactively improved by investors leading the charge – similar to this initiative?

van Waveren: More than 20 years ago, we had a greenhouse gas issue – acid rain. Investors helped solve that problem. Because of this, I’m hopeful that investors can also play a positive role in reducing methane.

I would also say the issue of Arctic drilling. Not so long ago, this was top of mind when we talked to our portfolio companies. A lot of companies have now withdrawn from Arctic drilling, especially from offshore Arctic drilling. I think investors were quite successful in sending a clear signal to the industry in a collective way that we didn’t see Arctic drilling as a good process. Maybe profitable – if at all – to the companies, but certainly not for the environment.

Wright: Thank you, Sylvia. We really appreciate your time and your thoughtful answers showing how investors can be part of the solution on methane.

By EDF Blogs

By Ben Ratner and Sean Wright

In the same week Apple raised $1 billion through green bonds to invest in clean energy, and Amazon put solar panels on a million square foot processing facility, the Trump administration – at the urging of the worst elements in the oil and gas industry –proposed a two-year delay of sensible rules that would limit emissions of methane and other air pollutants.

Natural gas, which is mostly methane, has been put forward as a cleaner alternative to other fossil fuels and as an energy resource that can play a key role in the transition to a lower-carbon future. But now more than ever, that proposition is now called into serious question.

How will natural gas compete in a changing world?

Every year, oil and gas operations around the country emit some 8-10 million metric tons of methane into the air. Methane is a highly potent greenhouse gas, responsible for about a quarter of the climate warming we’re experiencing today – and those emissions come mingled with a host of other smog-forming and carcinogenic pollutants.

There are cost-effective, proven ways to reduce these emissions, and leading companies are already implementing them. The problem is, many companies refuse to address the problem on their own. And now they’re looking to the Trump administration for a free pass to pollute.

When trade associations like the American Petroleum Institute attack cost-effective policies that protect public health and the climate, it sends a signal that the natural gas industry will do everything it can to maximize short-term profits – even at the risk of damaging the reputation of the industry in the eyes of the public and jeopardizing its ability to operate over the long term.

The question is: In an increasingly carbon constrained world, what is the natural gas industry’s plan for the future?

We’re not arguing that gas is at risk of going away tomorrow. The United States leads the world in natural gas production, as new technologies and processes have unlocked massive, cheap reserves. But make no mistake, the transition to cleaner energy in the U.S. and across the globe is irreversible and accelerating. In this context, fighting reasonable and necessary emissions rules only magnifies risk for the natural gas industry and its investors. It’s a head-in-the-sand approach that ignores the realities of what consumers, communities and markets demand.

Capital markets shifting to cleaner companies and forms of energy

The Trump administration’s recent moves come at a time when environmental concerns informing investment decisions are reaching record highs. For example, investors with $10 trillion in assets under management have committed to the Montreal Carbon Pledge to reduce the carbon footprint of their portfolios, with an eye towards portfolio de-carbonization in the long run.

As part of the shift to assets in lower emitting companies and industries, investors are demanding better carbon and methane disclosure as well as proactive environmental management. The recent watershed Exxon vote, in which 62% of investors (including industry titans like BlackRock and Vanguard) demanded better climate risk disclosure from Exxon management, showed that carbon risk considerations have hit the mainstream.

Increasingly, investors see methane simply as a form of carbon risk in need of management, not neglect. And methane waste can be cost-effectively managed – as proven in states like Colorado where production has continued apace even as strict methane rules have come on the books.

On top of investors’ efforts to shift portfolios towards cleaner companies, the divestment movement also continues to grow, driven by a range of environmental risks of owning fossil fuel stocks. Just recently mainstream investor CalSTRS divested from coal. Going forward, increasing numbers of investors will look carefully at the environmental record of oil and natural gas companies in determining their comfort level in continuing to invest.

Some companies lead but no substitute for commonsense rules

Companies like Southwestern Energy, Noble, Shell and others have led on methane emissions by setting methane targets, supporting state-based regulations, and working with the Oil and Gas Methane Partnership to disclose methane emissions. Their efforts certainly deserve recognition, and are supported by some investors who factor strong methane management into investment decision.

Still, voluntary actions by the few are no substitute for rules and oversight that require responsible operations by the thousands of oil and gas companies operating in the United States. Some of these companies simply lack a commitment to sustainability and to operating over the long-term, and will not rein in emissions unless they are required to do so by law.

Methane safeguards serve the long-term interests of industry and investors

As the scientific reality of climate change and consumer demand steer the world toward a cleaner energy future, will attacks on environmental protections inflict lasting damage on the oil and gas industry? Only time will tell. It’s likely, however, that if the loudest industry voices continue to oppose rules that could guide it toward a cleaner future, the industry as a whole will suffer.  Unfortunately, that will include the more forward-leaning companies, which will be dragged down by their intransigent peers. This outcome will become all the more likely thanks to the Trump administration’s erosion of environmental safeguards that are fundamental to responsible development.

It’s time for oil and gas operators and mainstream investors with a long-term view to take a look at what rules and regulations are needed to rein in methane emissions in their industry. And they also need decide if they want to align themselves with an administration whose policies may be unwittingly handicapping the very industry it attempts to serve.

By Colin Leyden

Map of Texas oil and gas wells that would have been covered under recently-delayed EPA methane rules.

This post originally appeared on TribTalk.org. 

A new report from the Academy of Medicine, Engineering and Science of Texas (TAMEST) Shale Task Force underscores the problem of methane emissions from Texas’ oil and gas industry.

When burned, natural gas has about half the CO2 emissions of coal (that’s good!), but the release of methane into the atmosphere can greatly erode that benefit. TAMEST explains that methane leak rates can greatly impact the overall greenhouse gas footprint of natural gas and reduce the benefit of burning natural gas versus coal. As TAMEST puts it, “Although the greenhouse gas footprint of natural gas combustion is lower than the footprint associated with coal or petroleum combustion, emissions along the supply chain of natural gas can change this footprint.”

The report notes that when industry emits methane, it also emits other hazardous air pollutants that could jeopardize public health — and calls for more research to better understand how these emissions could be harming communities near oil and gas developments.

But the report, written by a task force that consisted of oil and gas experts from academia, industry and non-governmental organizations, also examines the solutions for reducing these harmful emissions. According to the experts, “recent federal and state regulations have reduced emissions from multiple types of emission sources” and the report authors go on to predict that these emissions will continue to decrease under our nation’s current methane policies.

Under normal circumstances, this observation would be considered good news. But with the Trump Administration placing a two-year pause on methane controls, air pollution is expected to get worse, not better. As the number one source of oil and gas methane pollution in the country — Texas is about to bare the biggest brunt of this proposed rule suspension. EDF estimates that, without national methane reduction policies, Texas companies could pump up to nearly 10,000 tons of methane and another 100 tons of hazardous air pollutants into the atmosphere.

Regrettably, when it comes to climate and air, Texas’ political, regulatory and industry leadership are openly hostile toward any efforts aimed at solving the negative trade-offs associated with oil and gas. The Texas Railroad Commission and the Texas Oil and Gas Association are among some of the entities suing the Environmental Protection Agency over commonsense pollution controls — effectively using taxpayer dollars to argue in favor of more pollution.

According to the TAMEST report:

In 2016, under the Obama administration, the EPA began collecting information from oil and gas operators to inform potential future [methane] standards for oil and gas production sources. In March 2017, under the (then) new Trump administration, the EPA officially withdrew the information collection request.

This EPA information request was in preparation for future methane rules to address pollution from existing oil and gas sources — especially important in Texas, since as TAMEST points out, “existing well sources in Texas far outnumber newly created wells…” Guess who led the charge to petition the Trump administration to withdraw this EPA information collection request? Yep, the state of Texas.

These unfortunate decisions by Texas policy makers will directly impact Texans and go against the findings of the state’s own oil and gas experts. The very emission decreases cited in the TAMEST report are now in jeopardy.

Texas’ actions prove many of our state leaders are turning blind eyes to some of the biggest health and environmental risks associated with oil and gas development — fighting tooth and nail against existing protections and efforts to learn more to inform future protections.

We should praise the good work of the TAMEST Shale Task Force. At the same time, we need to hold our government leadership and the industry’s worst actors accountable for ignoring what their own experts are telling them.

Disclosure: The Environmental Defense Fund has been a financial supporter of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.

By Felice Stadler

The Trump Administration and EPA Administer Pruitt recently released a proposed budget targeting the health and well-being of all Americans. Alarmingly, by stripping funding for critical safeguards, this budget would be especially detrimental to the over 15 million Americans living near oil and gas industry operations across the country.

Communities depend on EPA for air monitoring

The oil and gas industry releases methane and toxic and smog-forming pollution like benzene, from drilling wells all across the country. This has unfortunately led to declining air quality in communities living near these operations, and reports of health impacts such as nose bleeds and headaches.

Americans in areas from rural Utah to urban Los Angeles and beyond rely on a network of air monitors to give them accurate and up to date information on air quality conditions. However 30 percent of the cost of these monitors is funded by an EPA program which would see significant reductions under President Trump’s budget. And less vital pollution data could sadly mean more asthma attacks and more school and work days lost.

The potentially drastic cuts to the nation’s air monitoring networks are compounded by EPA Administrator Pruitt’s efforts to delay and potentially weaken rules to reduce smog pollution, rules his allies in the oil and gas industry, including the American Petroleum Institute, have been tirelessly fighting.

Less enforcement would let polluters off the hook

The proposed budget also cuts EPA’s enforcement work – the cop on the public health beat – by 25 percent. A strong oversight program ensures polluters are held responsible for their pollution. Without strong enforcement programs, it is virtually impossible to protect communities by holding industry accountable for their operations.

Oil and gas companies that have illegally released pollution into our air, land, and water are responsible for a significant amount of the oversight actions taken by the EPA in recent years. This includes an almost $1 million fine to Sunoco for an oil pipeline spill in Ohio and a $2 million penalty from Slawson Exploration Company for illegally releasing hazardous and smog-forming pollution into the air in North Dakota.

Even before these budget cuts, there is evidence that EPA Administrator Pruitt has started relaxing and rolling back enforcement. The a New York Times report that Devon Energy is no longer planning to pay a six-figure settlement agreement for illegal pollution. However as demonstrated by a recent spill of oil sludge into an Ohio wetland, and a large methane leak detected in Eastern Utah, we need more oversight and enforcement to protect our communities, not less.

Axing incentives for companies to clean up their act

There are some oil and gas companies demonstrating leadership by implementing efficient practices to reduce pollution such as regularly looking for leaks, installing low-emitting equipment and more.

However, rather than rewarding these companies and trying to make these actions the norm, the proposed budget would entirely eliminate Natural Gas STAR, the leading voluntary pollution-reduction program in the industry. With this cut, companies across the oil and gas supply chain would lose an opportunity for transparency and accountability and have less motivation to innovate and clean up their acts.

Tying the hands of leading states

While the future of federal efforts to reduce pollution from the oil and gas industry is in question, states continue to be a bright spot. This includes Ohio, which recently finalized new permit requirements that will reduce methane and other air pollution from natural gas compressor stations; California, where the strongest methane rules in the country were adopted earlier this year; Wyoming, where the state moved to cut air pollution in key oil and gas drilling areas; and Colorado, which was the first state to enact comprehensive methane reforms.

However state efforts to protect clean air and clean water may also be in jeopardy if President Trump’s proposed budget cuts become reality, since states depend on significant resources and technical assistance from the federal government to do their job. For example, EPA funds one-third of the Colorado Department of Public Health and the Environment’s budget and up to 60 percent of the Wyoming Department of Environmental Quality’s budget.

Location shouldn’t determine the air you breathe

Americans living in states that have not adopted measures to reduce oil and gas pollution depend on a strong EPA to protect them from the health consequences of increasing energy development. To these communities, budget cuts to pollution and enforcement programs would be an additional health burden, on top of efforts by the Trump Administration to delay crucial methane and clean air standards.

The Trump administration has touted the need for more American to make the nation "energy dominant." Unfortunately if their proposed budget comes to pass, it would pose increasing and unnecessary risk to the communities on the front lines this development. As leading states and companies have shown, however, we can protect the health and welfare of American communities while keeping a strong energy economy; we don’t need to pick.

By Mark Brownstein

The questions the EPA Inspector General appears to be interested in are ones that have been widely and publicly addressed over the past three years, including in peer-reviewed scientific literature. For reference, see our blog posts from here (December 9, 2016), here (June 9, 2016), and here (March 9, 2015).

The most important thing to understand is that there is an extensive body of scientific research, including substantial research produced just over the last four years documenting the significant problem of methane emissions from the oil and gas sector, of which the two studies cited in the IG letter are just a small part. Together, this body of research presents a clear and compelling picture of the magnitude of the methane emissions problem and the urgent need for action to address it.

For example, EDF has helped organize 16 different research projects looking at emissions from on the ground and in the air. So far 33 peer-reviewed papers have been published on those projects. More than 35 different research institutions and over 120 individual co-authors have been involved in the work published to date.

(It’s worth noting that the two studies mentioned by the Inspector General were carried out with the cooperation and collaboration of several major oil and gas producers, including Anadarko, Chevron, ConocoPhillips, Encana, Pioneer, Shell, Statoil, Southwestern Energy and XTO.)

The central principle of our methane research efforts has been to examine the question from as many angles as possible, using the fullest possible suite of methods and technologies, precisely in order to see where the results were mutually reinforcing, and where differences might point to the need for additional study.

The picture developed from dozens of scientific studies published since the initial UT study was released encompasses a diverse range of measurement techniques, both top-down and bottom-up, that have also been cross-compared with one another.

Bottom line: It is clear that methane emissions from the oil and gas industry are too high – higher than EPA had long estimated, and that strong regulations are necessary to reduce them. What’s more, these emissions are frequently accompanied by smog-forming contaminants, toxic benzene – all of which further underscores the urgency of action.

Fortunately, research has also shown just how effective these solutions can be when properly implemented. We look forward to continuing to work with the federal government, the states and other stakeholders to reduce harmful methane emissions.