By Simi George

The New York Public Service Commission recently approved plans by National Grid, the largest distributor of natural gas in the Northeast, to use advanced leak detection and quantification technologies developed by EDF and Google Earth Outreach in order to maximize the environmental and ratepayer benefits of a three-year, $3 billion capital investment program. This program includes plans to replace 585 miles of old, leak-prone pipes on the company’s systems in Long Island and parts of New York City.

The Commission’s December 16 order marks a major step forward in EDF’s efforts to accelerate the diffusion of environmentally beneficial technologies – in this case cutting edge methane emission measurement tools – by natural gas utilities.

Speeding the Process

Typically, the adoption of new technologies starts gradually, led by a few visionary leaders. Over time, with the right market and regulatory conditions, the use of beneficial technologies spreads, leading eventually to adoption at a broader scale.

The typical technology diffusion curve representing the cumulative use of a new technology over time looks like this:

Source: Carey et al., When Media Are New: Understanding the Dynamics of New Media Adoption and Use (2010)

With the help of collaborators in the utility sector, along with our partners at Google Earth Outreach and Colorado State University, we’ve seen the industry move steadily along the technology diffusion curve toward the point at which best practice is adopted by a critical mass of utilities, before eventually becoming standard practice.

National Grid will consider methane emissions data drawn using advanced leak detection and quantification methods to identify and address the leakiest sections of its gas infrastructure first, which will reduce methane emissions much faster than otherwise possible. Methane, the main ingredient in natural gas, is a greenhouse gas, over 80 times more potent than carbon dioxide over a 20-year timeframe.

The company also plans to develop the means to quantify methane emissions released from its system on an ongoing basis. National Grid is the first utility to make a commitment to using these new methods on an ongoing basis, and to explore integration of these methods into its operations at scale.

Collaboration & Incentives

The Public Service Commission also blessed National Grid’s plans to collaborate with EDF on a series of pilot projects aimed at reducing methane emissions from its distribution system in New York. In approving these pilot projects, the Commission noted:

“It is unique for proposed pilot programs to be predicated on goals that provide benefits to the utilities, their ratepayers, and the environment and to come at no cost to ratepayers. We commend the parties in agreeing on these programs and encourage them to begin collaborating immediately in an effort to implement the programs […] as soon as possible. We look forward to the results of these programs.”

Under the terms of the final order, National Grid will receive financial incentives for exceeding annual leak repair and pipe replacement targets. By connecting the utility’s leak abatement performance to its bottom line, the Commission has created a powerful impetus for the acceleration of its leak abatement and pipe replacement efforts – a framework that could serve as a model for other jurisdictions.

This order represents a new milestone in EDF’s advocacy efforts by creating a pathway for the integration of advanced leak detection and quantification methods into a major utility’s operations, building on other recent precedents advanced by EDF.

A Growing Trend

Utilities are required by law to monitor their systems for hazardous leaks, and fix them quickly. But hundreds of other leaks that are deemed non-hazardous can persist for months or years on end. Our collaborations with gas utilities, centered on the diffusion of new, beneficial technologies to minimize methane emissions, are moving the ball forward in the utility industry. By making it possible for gas utilities to identify and prioritize the leakiest sections of their infrastructure as part of leak abatement efforts, advanced leak detection and quantification technologies are delivering substantial environmental and ratepayer benefits.

In November 2015, the New Jersey Board of Public Utilities approved plans by PSE&G, New Jersey’s largest utility, to use methane emissions data gathered by EDF to prioritize a $905 million, three-year pipe replacement program, making it the first utility to do so. This new approach allowed PSE&G to reduce as much as 83% of its methane emissions early while replacing one-third fewer miles of gas lines than under a business as usual scenario.

Earlier this year, EDF successfully completed a pilot project with Con Edison, another major New York utility, in which methane data gathered by EDF was used to identify and address the largest non-hazardous leaks on its system. Using the data, we found that more than half of the emissions could be eliminated by addressing the largest 18% of the leaks.

Other major utilities including CenterPoint Energy and Pacific Gas & Electric are independently exploring the integration of such technologies into their operations.

In the coming year, EDF will focus its efforts on facilitating further diffusion of advanced leak detection and quantification technologies in the utility sector to advance our overarching objective of minimizing methane emissions from the oil and gas sector. This will take time, but we’re well on our way.

By Andrew Williams

Oil and gas methane emissions in Pennsylvania. Image source: Environmental Protection Agency

Recently the Pennsylvania Department of Environmental Protection (DEP) took  an important first step to implement new requirements aimed at reducing methane emissions from new oil and gas operations.

Methane is the main component of natural gas – 51% of Pennsylvania households depend on it to fuel their homes. The more methane is wasted, the less there is to deliver to the PA communities that depend on it.

Methane pollution is a focus for Governor Wolf and the DEP for a number of reasons. Scientists estimate that methane is responsible for 25% of the man-made climate impact we experience today. The majority of methane emissions come from the oil and gas industry. As the second largest producer of natural gas in the nation, Pennsylvania has a duty to operate in a responsible and efficient manner by reducing its waste of this valuable domestic resource. In the Keystone State alone, oil and gas companies waste an appalling 100,000 tons of methane every year.

When less methane is delivered to the pipeline, that means lost revenue and less benefit to local economies. Last year alone Pennsylvania’s oil and gas producers allowed some $14 million worth of a valuable domestic energy resource to escape into the atmosphere, despite the fact that numerous analyses have shown industry can reduce up to 40% of methane emissions by implementing cost-effective technologies on the market today.

Besides contributing to climate change and resulting in massive energy waste, industry’s methane emissions have other implications for Pennsylvania communities. Air pollution from oil and gas facilities can contain toxic air pollutants like benzene – a known carcinogen – and other volatile organic compounds that exacerbate an already hazardous smog problem in many parts of the state.

Once in place, DEP’s efforts will reduce methane pollution from new facilities. However, more action is necessary to have any sort of real impact on reducing the massive amount of methane coming from the more than 100,000 active oil and gas facilities across the state. Governor Wolf has committed to taking action to reduce methane from these existing sources of methane emissions. If Pennsylvania’s leaders care about the economy, smart business, and the safety and security of Pennsylvania residents and communities, they should protect and defend cost-effective, common sense policies that can make the industry cleaner and more competitive.

 

By EDF Blogs

By Jon Goldstein and Peter Zalzal

The legal fight to defend the Bureau of Land Management’s (BLM) recent efforts to prevent oil and gas companies from wasting methane on public and tribal owned land continued yesterday.

EDF and a coalition of local, regional, tribal and national allies filed a brief opposing efforts by industry organizations and a handful states to block BLM’s protections before they even come into effect. 

The states of New Mexico and California also sought to participate in the legal challenges, likewise stepping up to defend BLM’s common sense standards. Notably, New Mexico is the largest producer of oil from public lands in the U.S. and the second largest producer of natural gas.

In seeking to stay BLM’s protections, the industry associations have claimed the standards have no benefits – so blocking them won’t have any impacts on the communities they are designed to protect.

But BLM’s oil and gas waste standards are about ensuring that operators use common sense technologies to capture natural gas that would otherwise be wasted. That preserves a valuable natural resource and cleans up the air, all while putting additional royalty payments in the pockets of Western communities that can be used to fund schools, roads and important infrastructure.

For example, a recent analysis found that in 2013, oil and gas companies operating on public and tribal lands wasted more than $330 million worth of gas – more than $100 million of that from New Mexico alone. This translates to lost royalty revenues for local communities. One report estimates that without action to reduce this waste, taxpayers could lose out on more than $800 million in royalties over the next decade.

The challengers’ legal claims stand in stark contrast to the facts on the ground. Evidence of the broad-based benefits of BLM’s Waste Prevention Rule was readily apparent in yesterday’s court filings supporting the protections..  Current and former state and county officials and everyday Westerners alike let their voices be heard about the importance of common sense measures to preserve public resources and protect the environment.

For example, in their filing seeking to participate in the case, the states of New Mexico and California emphasized:

“Implementation of the Rule will benefit the States of California and New Mexico by generating more annual royalty revenue . . . . In addition, the Rule will benefit the health of the states’ citizens who are exposed to harmful air contaminants leaked, vented and flared from federally-managed oil and gas operations . . . . The People of California and New Mexico have a strong interest in preventing the waste of public resources, as well as in reducing the emission of harmful air pollutants that threaten the health of the states’ citizens, the integrity of their infrastructure, protection of their unique environments and ecosystems, and the continued viability of their economies.” ( Filing, pages 2 and 3)

And in their filing opposing the preliminary injunction, these states claimed:

“Because the Rule is likely to result in the stronger protection of federal lands and greater prevention of the waste of natural resources, which belong to the People, the public interest weighs strongly in favor of denying the injunction.” (Filing, page 16)

The benefits that New Mexico and California identified are broadly shared and were likewise reflected in declarations submitted by county officials and former state officials in support of the standards.

Current La Plata County Colorado Commissioner Gwen Lachelt identified both the problem of resource waste on public lands and the benefits for Western counties like hers in addressing it:

“The San Juan Basin, in which La Plata County is situated, has one of the highest rates of wasted gas and methane loss in the country, accounting for nearly 17% of U.S. methane losses.

“In addition to wasted methane, oil and gas sites in La Plata County and the San Juan Basin release dangerous pollutants such as benzene and ozone-forming pollutants that can lead to asthma attacks and worsen emphysema . . . . This air pollution continues to be a regional public health hazard, and has contributed to La Plata County receiving a low grade for poor ozone air quality from the American Lung Association…

“The Rule will benefit La Plata County by providing additional royalties that we can use to fund key County priorities—including infrastructure, roads, and education—while also helping to clean up the air in the San Juan Basin, which will have health benefits for our citizens.” (Filing, page 4 and 5)

Lachelt points out that unlike other leading oil and gas states like Colorado, New Mexico has no policies to reduce methane waste and other pollution from oil and gas wells, and that BLM’s efforts will help to provide uniformity across state lines.

Sandra Ely, a former Chief of the New Mexico Environment Department’s Air Quality Bureau likewise submitted a declaration describing the importance and benefits of the BLM standards. She particularly focused on the long-standing problem of resource loss in the San Juan Basin. The region made headlines in recent years when NASA scientists discovered a 200-square-mile methane cloud over the region – the largest methane cloud uncovered in the U.S. Subsequent studies determined that oil and gas emissions were the main contributor to the methane “hot spot.”

“I am aware of a recent study, focused on the San Juan Basin, which suggested that BLM’s proposed leak detection and repair requirements alone would result in anywhere from $1–$6 million dollars of additional revenue for New Mexico… Absent the Waste Prevention Rule, I am concerned that resource loss and poor air quality associated with oil and gas development will continue unabated in New Mexico” (Sandra Ely, Filing, page 7)

Western leaders have been vocal in their support for BLM’s sensible standards that take an important energy resource out of the air and deliver it responsibly to the American public. At public hearings that the BLM held across the west these rules were supported by more than 3 to 1 margins. More than 80 local officials across the West, including county commissions in La Plata, Park and San Miguel counties in Colorado and Bernalillo, Rio Arriba and San Miguel counties and the Santa Fe city council in New Mexico, all support the protections. And these rules enjoy broad bipartisan public support as well (more than 80 percent of Westerners in a recent poll).

Given this cross-cutting support and yesterday’s forceful legal filings, it’s no wonder that industry challengers in this case don’t even want the judge to hear the views of New Mexicans and Californians. Yesterday, they indicated that they would oppose these states’ efforts to protect the interests of their citizens by participating in the case. While this reflexive obstructionism isn’t surprising—industry petitioners filed their legal challenges within 40 minutes of the rule being finalized and tried to block the standards’ effectiveness shortly thereafter—it certainly reveals their very one-sided view of what is in the public’s interest.

The Wyoming Court is scheduled to hear oral argument in this case on January 6. We look forward to continuing to defend these standards that will clean the air and prevent waste.

By EDF Blogs

Data helps prioritize gas line replacement

By Simi Rose George and Virginia Palacios 

A new method of prioritizing gas infrastructure improvements is resulting in faster reductions of greenhouse gas emissions in New Jersey. Just over a year ago, we wrote about an order from the state’s Board of Public Utilities approving a settlement agreement for a $905 million, three-year pipe replacement program by PSE&G, New Jersey’s largest gas utility. This order, and the underlying settlement agreement were pioneering in one major aspect – PSE&G agreed to use environmental data to inform its infrastructure improvement efforts.

The order provided that the company would use data on leak flow rate (the speed at which methane is leaking from gas pipes) to help prioritize its local distribution pipe (“gas line”) replacement program. PSE&G is the first utility in the country to do so. The idea was that this data would be gathered by EDF as part of a collaborative project with Google Earth Outreach and Colorado State University through a survey of sections of PSE&G’s service territory targeted for gas line replacement.

Methane, the main constituent of natural gas, is a powerful greenhouse gas 84 times more potent than carbon dioxide over a 20-year time frame. Replacing the leakiest gas lines first (after safety has been considered) means emissions can be reduced much more rapidly.  In this way, PSE&G is generating benefits not only for the environment and public safety, but also for ratepayers, who pay the costs of leaked gas.

In Practice

Working with our partners, we surveyed 30 one-square-mile grids in PSE&G’s service territory, using a Google Street View car specially outfitted with methane sensors. PSE&G shared the type and location of the gas lines they were looking to replace, making it possible to orient the survey efforts in a manner responsive to the Company’s pipe replacement program. Readings were taken from May 2015 through November 2015.

As always, safety factors remain paramount in the prioritization of PSE&G’s pipe replacement efforts. What the new dataset on leak flow rate provides to PSE&G is a layer of insight not previously available. Where two or more grids have a comparable safety ranking and are not immediately hazardous, PSE&G is addressing the one with the higher methane emissions first. This allows the company to co-optimize environmental, ratepayer and safety benefits.

Impacts

We found an average of about one leak per mile of gas line within the 30 grid areas surveyed. Similar to other national studies on distribution pipeline leaks, we found that a few large leaks contributed to a substantial portion of the emissions we found.

PSE&G prioritized three grids for replacement based on leak flow rate, after replacing gas lines in all the grids that were deemed to have the highest safety risk. These three grids accounted for 37% of the total emissions we quantified, but represented only 9% of the gas line miles in the 30 grids that were surveyed.

Our analysis shows that using leak flow rate for prioritizing pipe replacement allowed PSE&G to achieve an 83% reduction of quantified methane emissions by replacing one-third fewer miles of gas lines than it would have needed to replace in order to achieve the same level of emission reduction under a business-as-usual scenario. These figures take on greater meaning when you consider that the average costs of replacement per mile of gas line on PSE&G’s system ranges from $1.5-$2 million.

The Bigger Picture

These findings have important implications for utilities across the country. In 2011, the Department of Transportation and the federal Pipelines and Hazardous Materials Safety Administration (PHMSA) issued a joint call to action to all state pipeline regulatory agencies, technical and subject matter experts, and pipeline operators to accelerate repair, rehabilitation, and replacement of the highest-risk pipeline infrastructure.  According to PHMSA, cast iron pipes, which are considered to be high risk infrastructure, represent approximately 30 percent of the total leak-prone pipe in the country. The U.S. Department of Energy estimates that the total cost of replacing cast iron and bare steel pipes in gas distribution systems is a massive $270 billion, underscoring the need to direct this investment in the most optimal way possible.

Our analysis shows that methane emissions reductions can be achieved more quickly nationwide if cutting edge leak quantification methods are used to prioritize cast iron distribution pipeline replacement programs. If PSE&G’s ratio of emissions to gas line miles (37% of emissions from just 9% of lines surveyed) were to be found nationally, prioritizing replacements using the method employed by PSE&G for 9% of the highest-emitting cast iron gas lines in the nation could result in 12,000 tons of methane emission reductions. That would have the same climate benefit as taking over 200,000 cars off the roads each year.

More Progress

Other utilities are exploring new leak quantification methods. EDF recently concluded a pilot project with Con Edison to characterize its backlog of non-hazardous leaks in Westchester County in New York. Con Edison will use this data to prioritize repairs of these leaks, addressing the largest ones first. Analysis of the data found that more than half the emissions could be eliminated by addressing the largest 18% of the leaks.

EDF is continuing to advocate before regulatory commissions across the country for this new method of implementing gas infrastructure improvements to be adopted more broadly by utilities. In the meantime, PSE&G is leading the way in using data and analytics to inform its asset management decisions.

By Ben Ratner

Money talks. That’s why one key element in the battle against climate change must be aligning the financial compensation of executives to tangible corporate efforts to decarbonize.

Better aligning incentives is particularly important in energy intensive industries, where the status quo can encourage decisions on strategy, investment, and operations that jeopardize the planet’s climate, while also generating risk to investors that can, ultimately, undercut a company’s long-term viability.

In a promising sign, Royal Dutch Shell CEO recently announced that executive bonuses at the oil and gas giant will include greenhouse gas goals. “We have linked executive remuneration in the past to energy intensity and next year we are going to make it even more specific to the CO2 footprint metrics associated with these energy efficiencies” he said. Ten percent of bonus payments to executives, including the CEO and CFO at Shell, will reportedly be linked to “greenhouse gas management”.

Shell’s move to link GHG management to executive compensation, along with its stated intention to screen the carbon profile of future investments more seriously, suggest the company is moving in the right direction.

Indeed, a broader trend toward heightened sustainability in governance is underway. Analysts at the nonprofit organization CERES report that as of 2014, 24% of examined companies linked executive compensation to sustainability performance, up from 15% two years earlier.

Do These Pay Policies Measure Up?

As companies like Shell translate aspiration into practice, the big questions now are how will executive pay linked to de-carbonization be operationalized, and will it be enough to make the difference demanded by the dire science of climate change. There are two key issues in particular that boards, shareholders, and others can ask as GHG bonus measures are developed and assessed:

1. Are bonus payments tied to explicit, ambitious and well-chosen metrics?

The mere act of including greenhouse gas management in compensation is not sufficient. CERES found that of companies linking executive pay to sustainability, few used sustainability performance targets that go beyond goals driven by compliance with laws and regulations. In the absence of comprehensive climate policy – for example market-based signals that put a price on carbon pollution – operators like Shell must go above and beyond compliance metrics for their bonuses to be meaningful. Mere compliance should be expected as a matter of course; winning a GHG bonus must require another level of executive leadership and results.

There are a host of metrics that oil and gas operators can consider as they link compensation to GHG management. Those metrics may differ for large vertically integrated oil and gas majors like Shell, versus smaller companies that operate in just one or two segments of the oil and gas value chain. One common element is incentivizing strong methane management.

Methane emissions are a widespread issue across the oil and gas supply chain. Leaks and other intentional releases waste valuable product, speed climate change, and cast serious doubt on the ability of natural gas to play a constructive role in the transition to a cleaner energy economy. However, as Environmental Defense Fund found in Rising Risk: Improving Methane Disclosure in the Oil and Gas Industry, as of early 2016, none of the leading 65 oil and gas operators disclosed a quantitative target to reduce methane emissions.

As Principles for Responsible Investment noted in its recent Investor's Guide to Methane developed with EDF, investors should expect operators to put governance to work to get the incentives right for enhanced methane management. After all, what gets measured, gets managed, and creating incentives to address invisible gas leaks can make a visible difference.

The ultimate methane metric would operationalize the same kind of “zero tolerance” approach to methane leaks that companies take to preventing fatalities. In the near term, we look for incentives tied to comprehensive, direct methane measurement; leading practices including minimizing venting and conducting regular leak detection and repair; and achievement of verifiable emission reductions.

Beyond methane, GHG metrics may encompass reducing CO2 intensity from fossil fuel operations, but also expanding into renewable energy, as Total, Statoil, and others have signaled. Ultimately the gold standard is absolute reductions in CO2 emissions over time. Taken together, an appropriate mix of GHG metrics will send an unmistakable signal to executives that a holistic approach to de-carbonization is the new order of the day.

1. Is the bonus a token or a change agent?

Even well-defined de-carbonization metrics can prove insufficient if the incentive is not strong enough, particularly compared with the full suite of executive motivators. In Shell’s case, while its commitment to tie 10% of executive pay to greenhouse gas management puts it 10% ahead of most of its peers, the question remains: is the incentive adequate enough to change decision making with the speed and seriousness required to achieve the energy transformation we need.

We expect institutional investors and others to look carefully not only at the specifics of the 10% bonus on GHG management, but the 90% on other factors. For energy operators taking the positive step to link pay to climate performance, it will be important to guard against also using contradictory factors that could send mixed messages, such as rewarding executives for expanding carbon reserves, a practice that 13 of 30 major U.S. fossil-fuel corporations practiced, according to a recent report by the Institute for Policy Studies.

We applaud Shell’s intent to link climate performance to pay and look forward to examining the details. In the meantime, as pressure mounts for more oil and gas operators to follow suit, varying operator reactions will tell investors a lot about which companies are poised to adapt best to a lower-carbon energy future.

Image source: Royal Dutch Shell, Flickr

By Ben Ratner

President-Elect Trump’s selection of Oklahoma attorney general Scott Pruitt as the next head of the Environmental Protection Agency has drawn swift criticism from environmental and health advocates.

Passing the nation’s environmental agency to one of its staunchest opponents risks upending the clean air and clean water that Americans of both parties demand. And looking deeper, Pruitt’s track record suggests he will harm the American economy while increasing pollution.

Here are three ways the Pruitt choice isn’t just bad for the environment, it’s bad for business

1. Blocking federal methane rules means more wasted American energy

Protecting common sense standards to reduce oil and gas methane emissions is a winning opportunity for American business, but that did not stop Pruitt from suing EPA on its proposed methane rules earlier this year.

Methane is a natural resource, and cutting methane emissions means cutting economic waste. A recent study from ICF International found that drilling on federal and tribal lands – mostly in the rural West -leaked, vented, and flared natural gas worth about $330 million in 2013. Across the U.S., the market value of wasted natural gas is estimated at $2 billion.

Furthermore, there are good jobs at stake keeping methane and other air pollutants in the pipes and out of the air communities breathe. A report by Datu Research identified over 75 firms with over 500 locations across the country putting people to work in the methane mitigation industry. These include well-paying jobs in manufacturing, plus leak detection service jobs that offer technical training and are inherently offshore-proof. With nearly 60% of methane mitigation firms being small businesses, including in states like Colorado, Ohio, and Pennsylvania, national efforts to support methane reductions are a job creator at just the right time.

And, many investors recognize that achieving methane reductions is vital if natural gas is to play a constructive role in the transition to a low carbon energy economy. In fact, investors representing over $3.6 trillion in assets under management praised the North American agreement to reduce oil and gas methane emissions 45%. Public pension fund CEO Jack Ehnes wrote that as a large investor with a financial stake in the long term performance of the natural gas industry, CalSTRS sees that “methane emissions — which literally leak away the potential climate benefits of natural gas over other fossil fuels — must be actively managed.”

Most recently, seven in ten Colorado oil and gas operators interviewed about that state’s experience implementing methane rules reported that the benefits of compliance outweighed the costs.

In spite of the jobs and other business benefits of regulating methane emissions, as attorney general of Oklahoma, Pruitt took a page – literally – from a large oil company and sued EPA on its proposed methane rule. This approach may have appeased a big oil backer, but is short-sighted for the industry’s own long-term good, and hurts the American workers whose paycheck comes from preventing and fixing natural gas leaks.

1. Undermining the Clean Power Plan will slow economic growth in clean energy

The Clean Power Plan helps continue the trend of generating even more jobs in fast-growing segments of the American economy, including wind and solar energy, and energy efficiency. Third party estimates suggest that the plan will create 74,000 to 273,000 new jobs in those and related industries, on top of the hundreds of thousands of already existing clean energy jobs. Unfortunately, Pruitt joined a lawsuit against the plan, parroting scare tactic claims that the rule would increase electricity prices.

In reality, the Clean Power plan capitalizes on economic progress many states are already making, such as the rise of solar energy in North Carolina and California. With costs plummeting in solar energy, renewable energy last year accounted for the majority of new installed power capacity.

And because wind and solar are generally more labor-intensive than older energy forms, we can expect a windfall of well-paying, sustainable American jobs in tomorrow’s clean energy economy if we stay the course.

These positive trends are part of why American businesses like Google have committed to sourcing 100% renewable energy. Google and other leading technology companies defended the Clean Power Plan in court because they see that market-oriented government support for clean energy will help their businesses gain access to cheap, clean, stably priced energy for years to come.

In attacking the Clean Power Plan, Pruitt raised the specter of shuttering coal fired plants. However, as a fossil-fuel backer, he should know what experts believe and even natural gas industry insiders privately admit: it is cheap natural gas, not environmental rules, that is mainly responsible for driving coal plants out of business. As CEO of Appalachian Power, a West Virginia, Virginia, and Tennessee utility said, “You just can’t go with new coal [plants] at this point in time. It is just not economically feasible to do so.”

1. Denying climate is denying a great threat – and opportunity – for business

The days of seeing global climate change as only an environmental issue are over. But while many business leaders acknowledge climate change as the fundamental threat that it is – to infrastructure, supply chains, and national security to name a few – Pruitt says the “debate” on climate change is “far from over”.

The doubt seeded by climate denialism may be fake, but it can inflict business consequences that are real.

In a globalized economy, American businesses benefit from our standing in the world and the goodwill we have achieved. With the world marching toward a cleaner energy future, propelled by the climate agreement of nearly 200 nations last year in Paris, American businesses have an interest in standing with the international community and competing on a level playing field.

We have an opportunity to win the next frontier of entrepreneurship and innovation in the clean energy products and ideas demanded the world over. Yet, Pruitt would likely become the only environmental chief in the world who doubts climate change. This anomaly would isolate and embarrass America. In short, the opposite of what businesses need to hear as America competes with China and others to seize the mantle of leadership on a global economic opportunity.

There are many capable environmental leaders from across the political and philosophical spectrum. America needs leaders to chart a path of environmental stewardship and economic prosperity. Mr. Pruitt’s record suggests he would do neither.

By Ramon Alvarez, Ph.D.

In 2012, EDF spearheaded its largest scientific pursuit to date—a collaborative 16-study effort designed to better understand how much methane is being leaked across the natural gas supply chain (and from where). In the coming months, we plan to wrap up and summarize that work, packaging all that we have learned from this undertaking and the growing body of work from other researchers.

The first study was led by the University of Texas (UT Study) and found that methane emissions from equipment leaks and pneumatic devices were larger than previously thought. The study also found that techniques to reduce emissions from hydraulically fractured well completions are effective at capturing 99% of the methane that was previously vented to the atmosphere, and provided a data-based example of EPA regulations working.

After publication of the findings from the UT Study, public debate about the results ensued, with one criticism suggesting that the UT Study underestimated emissions because of a possible malfunction of one of the instruments used for measuring emissions, the Hi Flow Sampler.

The Hi Flow Sampler

EDF took this concern seriously.  So did primary authors of the UT Study journal articles, who re-evaluated their data and concluded that instrument malfunction “did not significantly impact” their measurements. We went a step further by doing a “what-if” analysis to estimate how big an error might have occurred if the instrument had – in fact – malfunctioned.  Our results are published today in Elementa: Science of the Anthropocene.

The new paper begins by clarifying that whilethe UT Study quantified emissions from five source categories, it relied exclusively on the Hi Flow Sampler for only two out of the five categories. Obviously, this mitigates the potential impact of any malfunction in the Hi Flow on the overall study.  We then present a quantitative estimate of the effect on the UT Study conclusions if the Hi Flow Sampler had systematically malfunctioned during the UT Study.  We found that the worst case scenario is that the UT Study could have under reported total emissions from all five sources it examined by no more than 12-24% (the effect on an individual source type like equipment leaks could have been larger, up to 40-80%). The potential error is even smaller when accounting for emissions from source categories in the natural gas production segment that were not part of the UT Study (<7-14%), or across the entire natural gas supply chain (<2-5%).

Our new paper affirms what we said when the UT Study was first published:  emissions from key natural gas production sources are too big and they need to be reduced.  Underestimation due to malfunctions of the Hi Flow would only increase the scale of the problem. In other words, the issue raised by the possibility of Hi Flow malfunction in the UT Study is whether emissions are big or bigger.

Methane Still Matters

Our overall understanding is that methane emissions are nonetheless substantial, and need to be addressed, particularly from production sites. We still know that oil and gas operations in the US leak and waste methane at a rate of nearly 10 million metric tons of methane a year, valued at almost $2 billion each year. This is enough gas to heat over 7 million homes.

All of this wasted methane can be accompanied by other air pollutants that also affect the health of those living near these production sites. The toxic pollution that the oil and gas industry leaks into the air can also trigger asthma attacks in children and cause cancer, among other public health threats.

EDF will continue our work to engage with the scientific community on the importance of emissions of methane and other air pollutants from the oil and gas industry.

By Jon Goldstein

Last month the Bureau of Land Management took a much needed step to prevent the oil and gas industry from needlessly wasting American energy resources.

For oil and gas companies operating on public and tribal lands, the new standards will reduce the amount of methane that operators can leak, vent or burn into the atmosphere. These methane emissions result in massive amount of energy waste that translates to lost revenues for federal taxpayers and tribes. One recent analysis suggests that without these standards, taxpayers could lose out on more than $800 million in royalty revenue over the next decade.

Nowhere in the country is this a bigger problem than in New Mexico. Of the $330 million worth of gas experts estimate that is wasted from federal and tribal lands across the U.S. annually, almost a third of it ($101 million) is wasted in New Mexico alone.

Don Schreiber, a New Mexico rancher who lives amongst oil and gas development of the state’s San Juan Basin recently voiced his gratitude for BLM’s efforts.  “Thank you for acting to stop oil and gas companies from wasting our natural gas resources on our public and tribal lands,” he said.

Oil and gas methane emissions made New Mexico the subject of international headlines after a 2014 NASA study revealed a giant methane cloud hovering over the Four Corners. A subsequent study found that natural gas leaks were primarily to blame for the largest concentration of methane ever discovered in the U.S.

Tribal members are also voicing their support. Kendra Pinto, who is Diné (Navajo)  also expressed happiness with that the rules would have both economic and public health benefits.

“Thank you to our New Mexico leaders who stood up to protect taxpayers and fight for the health of our local communities.”

BLM’s actions were supported by dozens of elected officials across New Mexico and especially by the state’s congressional leaders, Senators Tom Udall and Martin Heinrich and Members of Congress Ben Ray Lujan and Michelle Lujan Grisham. And many in New Mexico are calling for those efforts to continue in the coming months at the state and federal levels.

Thank New Mexico's elected officials for standing up for standards that reduce waste and clean the air.

“The state of New Mexico and the federal government need to continue to work together and find win-win solutions that will cut natural gas waste, ensure a fair return to taxpayers, create good paying jobs and clean up our air,” said Oriana Sandoval, Executive Director or the Center for Civic Policy.

EDF recently filed a petition to defend the standards in federal court, and will continue to ensure New Mexico residents — and all communities across the Western US – retain these landmark standards that reduce waste, reduce air pollution, and return real dollars to Americans living in the oil and gas fields.

By Peter Zalzal

EDF, along with a coalition of health and environmental groups, just filed a motion to intervene in defense of vital new standards that will prevent the wasteful loss of natural resources, save money for taxpayers and tribes, and reduce emissions of dangerous and climate-disrupting pollution.

The Bureau of Land Management’s (BLM) waste prevention standards will reduce venting, flaring, and leakage of natural gas on BLM-managed federal and tribal lands – but they are being challenged in U.S. Federal District Court in Wyoming by oil and gas industry groups and three states.

Federal and tribal lands are an important source of oil and gas production. Together, the amount they produce is the equivalent of five percent of the U.S. oil supply and 11 percent of the U.S. natural gas supply, and generates more than $2 billion annually in royalties.

Unfortunately, oil and gas companies that lease these federal and tribal lands lose substantial amounts of publicly-owned natural gas through unnecessary venting, flaring, or leaking at production sites.

A recent study from ICF International found that in 2013, drilling on federal and tribal lands —mostly in the rural West— leaked, vented, and flared natural gas worth about $330 million. An analysis from the Western Values Project estimates taxpayers could lose almost $800 million over the next decade if wasteful venting and flaring practices continue.

In addition to wasting a public resource, oil and gas companies’ unnecessary venting, flaring, and leakage on federal and tribal lands also poses significant public health and safety risks.

The wasted natural gas is primarily composed of methane – a powerful greenhouse gas, capable of warming the climate at a rate 84 times that of carbon dioxide over a 20-year period.

The leaked, vented, and flared natural gas also emits air pollutants including carcinogens such as benzene, and volatile organic compounds – which contribute to hazardous smog.

BLM’s recently finalized venting and flaring standards deploy common sense, cost-effective, and readily available technologies — already effectively in use in several states across the country — to capture this gas.

The standards yield significant benefits by minimizing the waste of a taxpayer-owned natural resource, and by curbing emissions that contribute to air pollution and climate change, all while helping to create new jobs in methane mitigation. They will save, and put to productive use, up to 56 billion cubic feet of gas a year — enough to supply up to 760,000 households – and will provide millions in additional revenues for taxpayers.

The standards will also cut methane emissions by up to 169,000 tons per year — the equivalent to carbon emissions from as many as 890,000 vehicles.

These benefits will accrue to millions of people across the country, including those living near oil and gas development on federal and tribal lands.

EDF member and New Mexico rancher Don Schreiber has more than 100 oil and gas wells on and near his ranch in the San Juan Basin that will now be covered by the BLM standards. In a declaration supporting EDF’s motion to intervene, he describes the impact of venting, flaring, and leaking from these wells on his family and, in particular, his grandchildren:

“Most noticeable is the near-constant smell from leaking wells. …  These odors make breathing uncomfortable and often cause us to leave affected areas as quickly as possible. … We worry about [our grandchildren’s] exposure to air pollutants from oil and gas development on the property, and always are careful to keep them away from the wells and above ground pipeline equipment. Protecting our grandchildren from the negative health effects of oil and gas emissions is a constant concern when they come to visit us.” (New Mexico rancher Don Schreiber, Declaration)

With the new standards, he anticipates a reduction in the “harmful air pollution near my home and in the state where my family and I live, work, and recreate.” (Declaration)

BLM’s efforts to reduce natural gas waste have broad and cross-cutting support from elected officials and community members across the West. In a recent bipartisan poll of Western states, 80 percent of respondents supported BLM standards to curtail waste of this valuable resource. And, over the course of several years during which the rule was under development, BLM solicited the feedback of community stakeholders, oil and gas developers, and local, tribal and state governments. The final rule is the result of a collaborative and deliberate process and includes changes that reflect this stakeholder input.

Standing in stark contrast to this careful process, industry associations rushed to file legal challenges seeking to overturn the waste prevention rule within 40 minutes after it was released — hardly enough time to read the rule, let alone meaningfully consider its contents.

And in a subsequent filing seeking to block these protections before they become effective, these industry associations put forward a number of flawed claims, not least of which was their suggestion that BLM acted unlawfully because its rule may “only” produce additional annual royalty revenues of $22.4 million — a sum the filing characterizes as “de minimis.”

While $22 million annually may be an insignificant amount for the oil and gas companies litigating to overturn this rule, it has real meaning for infrastructure projects, schools, and communities across the country that stand to benefit from this funding.

It’s unfortunate that some have engaged in reflexive efforts to roll back protections designed to prevent the waste of our nation’s public resources and, at the same time, protect our air quality and climate.

The good news is that BLM’s commonsense standards are firmly rooted in the agency’s manifest authority to minimize waste and to address the harmful health and environmental consequences of oil and gas development on federal lands.  We at EDF look forward to vigorously defending these standards in court.

 

 

By Ben Ratner

At Energy Dialogues’ North American Gas Forum last month, I had the opportunity to participate on a panel moderated by Gregory Kallenberg of the Rational Middle. While the panel pre-dated the presidential election, the topic of constructive engagement through rational discourse is now more important than ever.

We explored how environmental groups, industry, and other stakeholders need to come together to rationally discuss and collaboratively act on the challenges of meeting rising energy demand while addressing real and growing environmental risks.

The still principally fossil-based energy system, which includes natural gas, is not the only cause of climate change, but it is the largest. And so a range of stakeholders, from protesters holding signs, to investors with a long term interest in the future of natural gas, to industry consumers, are looking with increasing criticism at fossil fuels. That was true before the election, and it’s true today. They’re asking: How can we reconcile the environment we want to protect for the future with the traditional energy and feedstock resources we are using now?

Unfortunately, industry, when pressed with concerns and asked to act, has often come up short. For example, with precious few exceptions, oil and natural gas companies have declined to set quantitative methane reduction targets – of their own choosing, and for their own product. And they have declined to join their counterparts’ support for a 2 degree limit on temperature rise. Too often, industry has failed to engage with the real concerns of their customers and communities.

But there’s a better way

As Sarah Sandberg, from the Colorado Oil & Gas Association, said on the panel, “You’re either at the table or on the menu.” As panelist Michael Crothers from Shell observed, industry must engage directly and responsively with the legitimate climate concerns of the general public. And they’re right.

At Environmental Defense Fund, we work to create opportunities for diverse stakeholders to come to the table and have the conversations that feed the actions – whether establishing public policy, catalyzing technology innovation, or making best practice standard practice – to address environmental challenges and protect our future.

There have been bright spots of industry leadership, like energy companies joining the table in Colorado to help craft the first methane regulations, or Shell Canada supporting Alberta’s new climate strategy, including a methane goal backed by regulations. Unfortunately, such constructive engagements have been the exception to the rule. All too often, industry’s response to environmental concerns and opportunities has amounted to “Just Say No”.

A better response? “Just Say How.” For example:

• How will operators demonstrate that they hear and are addressing in practical terms, the air and groundwater pollution concerns of the 15 million Americans who live within a mile of a well?

• How will industry leaders acknowledge and finally engage on public policy to reduce their contribution to climate change?

• How will they make unnecessary methane emissions a thing of the past, by finding and fixing leaks?

• How will the companies that do step up and lead on these issues maximize the competitive advantage of being cleaner companies in a world that demands it?

Let’s hope industry can take the real issues head on and start showing how we can make positive changes by working together. Pressure on industry is not going away, and rational engagement can help cut a productive path through polarization.

By Andrew Williams

Pennsylvania Governor Tom Wolf and EDF Chief Scientist Steve Hamburg check out the methane-sniffing Google Street View car

EDF and Google have released new interactive maps that show Pittsburgh residents just how much methane may be escaping from city pipelines.

Methane is the main component of natural gas. Millions of families across Pennsylvania and the country depend on it to heat homes and prepare their dinners. But when leaked into the atmosphere, it can wreak havoc on our climate, represent millions of dollars’ worth of wasted American energy, and pose serious risks to public health and safety.

That’s why we spent the past year working with Peoples Gas in Pittsburgh to use Google Street View mapping cars specially equipped with state-of-the-art methane sensors to determine how many pipeline leaks there are, how much methane is leaking, and where these leaks are located.

Snapshot of natural gas leaks in Pittsburgh, PA https://edf.org/hX3 via @EnvDefenseFund
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Fixing hazardous gas leaks has long been a requirement for utility companies, but countless other leaks that don’t pose an immediate risk can, and often do, go unrepaired for long stretches of time. And until recently, it has been hard to measure the leak problem on a large scale, or to use leak information to prioritize upgrades that deliver the biggest bang for the buck. This data helps them do just that, and in fact, some states are mandating that this methodology be used to help develop data to help address public safety and climate concerns.

A growing body of scientific research makes it clear that methane emissions are a problem across the entire natural gas supply chain, from the moment the gas is pulled from the well, all the way to the local pipes and gas meters that deliver gas to homes and businesses. And this is largely why Governor Tom Wolf has made controlling methane from the state’s existing oil and gas infrastructure one of his key priorities.

Why Pennsylvania is Tackling Methane Pollution

Methane is responsible for about a quarter of today’s global warming. It’s also a public health risk. When it leaks from well pads and other upstream facilities (before it gets to the local pipeline) it can frequently escape with other pollutants that can exacerbate respiratory illnesses,  like asthma, for people who live, work and play near such facilities. Nearly one and a half million Pennsylvanians, about 12.5% of the state’s total population, are affected by asthma and, therefore, are particularly vulnerable to pollution from oil and gas operations.  And recent polls have shown that the majority of Pennsylvanians support common-sense rules for methane pollution.

Because methane is the main ingredient of natural gas, energy companies, utilities and regulators have a vested interest in keeping a valuable American energy resource out of the atmosphere and in the pipes. Cost-effective technologies – like those used in our methane mapping project – are already being used with great success to help companies capture and control wasted methane.

In the wake of this newly released data, Gov. Wolf has indicated that his administration will soon release new regulatory proposals that will require oil and gas companies to use these leading methane capture technologies on the more than 100,000 active wells, compressors, and processing stations across the state.

Take Action: Thank Governor Wolf for his commitment to tackle methane

As the second-largest natural gas producing state in the nation, Pennsylvania must rise to the challenge of safe and sensible energy development.  Policy that requires operators and utilities to maintain functioning and efficient equipment will help us meet that challenge and ensure that impacted communities in Pennsylvania are protected.

Photo Source: George Mendel Photography

By Dan Grossman

Today the Bureau of Land Management finalized new rules that limit the amount of methane oil and gas companies can leak, vent, or flare on the 245 million acres of taxpayer-owned and tribal lands. This is a huge, $330 million dollar problem according to a recent study from ICF international. While an analysis from the Western Values Project estimates taxpayers could lose out on almost $800 million over the next decade – unless the BLM acts to reduce wasteful venting and flaring practices.

Reeling in waste of resources that belong to the nation’s tribes and taxpayers is an effort that folks from across the   political spectrum can get behind.

Methane is the essential ingredient of natural gas and a potent climate forcer when emitted to the atmosphere.  Wasteful drilling practices on public and tribal lands – largely located in the rural Western U.S. – exacts both financial and environmental costs.

Fortunately, the surge in affordable technologies has made it possible for oil and gas companies to capture methane and reduce waste cost effectively.  It’s a key reason why elected officials from across the West and thousands of community members support the BLM’s efforts to crack down on waste.    Moreover, according to a recent poll, 80% of Westerners (Democrats, Republicans and independents)  support these efforts – numbers that were reflected at public hearings where supporters of BLM’s efforts outnumbered adversaries by a 3-to-1 margin. And a recent U.S. House vote saw a number of Republicans cross the aisle to support this rule.

With the transition to a new President and a new administration, many have asked about the fate of some of the energy policies that have been enacted in the last few years. It is too early to draw firm conclusions about what the incoming Trump Administration or the next Congress will decide on specific policies or regulations. But we do know that the BLM proposal is sound policy that will reduce waste of an important domestic energy resource.

The Trump transition team has said it wants to create jobs and harness America’s energy reserves. The BLM natural gas waste rule will create new jobs in methane mitigation and ensure we are putting American energy to good use.

No matter what side of the aisle you’re on, this is what smart energy policy looks like and EDF will work hard to implement and defend it.

By Mark Brownstein

With 2016 on pace to be the hottest year ever recorded, it’s never been more urgent for countries to work together to protect our climate. Europe, with its long history of climate leadership, has a pivotal role to play in driving the next wave of efforts.

European leadership was central to achieving the historic Paris Climate Agreement, as well as recent breakthrough agreements on carbon dioxide emissions from aviation and hydrofluorocarbons (HFCs) in refrigerators and air conditioners.

But there is one critical climate opportunity still to be taken on in Europe, and that’s methane – one of the biggest levers we have today to slow the rate of warming.

The other important greenhouse gas

Methane is a powerful greenhouse pollutant, over 80 times more powerful than carbon dioxide during the first 20 years it hangs around in the atmosphere. In fact, scientists say methane accounts for around 25% of the warming experienced today.

Accumulation of CO2 in the atmosphere determines the amount of warming our planet will experience; reducing it now lowers the chance of long-term catastrophic climate change. Cutting methane affects the rate of warming, decreasing the probability of intense heat waves and slowing rapid sea level rise. That’s why an effective climate strategy requires action to reduce both carbon dioxide and methane.

Shrinking the methane footprint

Natural gas is mostly methane, and globally the oil and gas sector is one of its largest contributors. Curbing methane across this industry is also the single biggest, most affordable opportunity to eliminate a sizable chunk of these emissions.

Across the supply chain, tens of millions of tons escape each year. In 2012, the industry leaked as much methane as was produced by Norway, the world’s seventh largest producer. Losses would be higher if they included wasted gas now burned off in flares rather than put to productive use.

A recent study concluded that methane from fossil fuel development is up to 60% greater than previously estimated. This mirrors new measurements in the United States that strongly indicate the same. Without action, experts say, emissions will climb by more than 20% worldwide by 2030.

Natural gas is widely marketed today as a low-carbon fuel, emitting roughly half the carbon dioxide of coal when burned. But that ignores the methane problem. Consequently, whether gas can truly be seen as a greener substitute for coal and oil  remains in question until the methane that is emitted is fully measured, regularly monitored and significantly reduced.

If the world were to cut oil and gas methane emissions by 45% by 2025, as the United States, Canada and Mexico recently agreed to do, it would have the same climate benefit over 20 years as closing one-third of the world’s coal plants.

Untapped opportunity for Europe

The International Energy Agency says oil and gas methane emissions are among five key pillars to reduce global greenhouse emissions. Fortunately, there are cost-effective strategies to reduce these emissions, creating important opportunities for countries and companies trying to meet their greenhouse-gas goals.

Curbing oil and gas methane requires little in the way of new capital or fundamental changes in business practice. Often, it’s as easy as tightening valves and repairing leaks. In places like the state of Colorado, where industry reductions are required, companies are finding that the benefits outweigh costs of regularly checking for leaks.

Europe is a central player in the global oil and gas industry. Four of the world’s top 15 gas-producing corporations are headquartered in Europe, with the continent producing 8% of the world’s natural gas. Presently, Europe is the largest gas importer, globally, and the IEA predicts the continent’s gas to rise over the next decade. For its emissions, official inventories rank total EU oil-and-gas methane higher than those reported for Iran or Saudi Arabia.

Taking the next steps

In May, the five Nordic states committed to developing a global target to reduce oil and gas methane. It’s a step, but we need greater European ambition to seize the full climate benefit offered by reducing methane emissions.

European companies have begun engaging more in the methane challenge. BP, Engie, ENI, Repsol, Statoil and Total have all expressed concern about methane. They’ve started surveying parts of their operations for emissions and disclosing that information. But so far only a few European companies have an action plan to reduce their global methane emissions, and none have specific reduction targets. All of them should be doing both.

Likewise, European nations inside and outside of the European Union should revise and implement national standards for oil and gas methane and incorporate measures into commitments for achieving the greenhouse reductions agreed to in Paris. And while Europe’s data suggest that its oil and gas methane emissions have declined, studies have shown such estimates to routinely undercount emissions. Europe could also be instrumental in developing a worldwide oil and gas methane goal, building on the Nordic commitment and cultivating support in other parts of the world, similarly to how it led the international community in setting limits on global aircraft and refrigerant industry emissions.

In a world where we are looking for every available tool to reduce greenhouse gas pollution and stay below dangerous climate thresholds, we can’t afford missed opportunities. Europe can affect real change in the oil and gas industry and reduce methane emissions, showing once again that it can propel a global community forward on climate solutions.

This post originally appeared on The Economist Intelligence Unit Perspectives blog.
Image source: David Wright, Geograph

By Mark Brownstein

The Oil and Gas Climate Initiative, a group of 10 oil and gas CEOs representing 25 percent of the industry’s global production, came together in London today to sign an agreement committing to invest $1 billion over the next ten years to accelerate commercial deployment of low carbon energy technologies. Their primary focus will be carbon capture and storage and reducing oil and gas methane emissions.

Not coincidentally, this accord comes the same day that the Paris Climate Agreement enters into force.

Is $1 billion enough? Of course not. The emission reduction goals the world has set in Paris require nothing less than a fundamental transformation of our global energy system. We must dramatically reduce the total amount of fossil fuels we use – coal, oil, and natural gas – and dramatically ramp up deployment of renewable resources – solar, wind – and aggressively pursue energy efficiency and vehicle electrification.

Jeremy Legget, chairman of the Carbon Tracker Initiative, points out that “the world has to mobilize trillions of dollars a year for clean energy” within a 10 year time frame if the Paris goals are to be realized. Collectively, the ten OGCI CEOs signing today’s accord already plan to spend more than $90 Billion in capital this year alone just doing business as usual, so even by the standards of their own capital budgets, a $1 billion commitment over a decade is a drop in the bucket.

As Global Leaders Step Forward, U.S. Companies Dig In

But make no mistake, the OGCI accord is a big deal. I say this for two reasons. First, a core group of the world’s largest oil and gas companies are now squarely on record in support of the Paris goals. And the OGCI is more than just a European old boys club. Besides leading European producers like BP, Shell, and Total, the group includes China National Petroleum Company, Saudi Aramco, and Mexico’s PEMEX (and the CEO of BP happens to be an American).

The global oil and gas industry may not yet be playing to full potential, but they are now clearly in the climate game, and that deserves applause.

It’s equally important to note that not a single American-based oil and gas producer has joined this initiative. This speaks volumes about just how out of step the U.S. oil and gas industry is with global peers. If I were an investor, I’d be worried about whether the U.S. companies are taking the necessary steps to survive in the new energy future. Today’s announcement certainly suggests they are working hard at being left behind.

Methane in the Mix

The new OGCI accord is also significant in that it specifically highlights the importance oil and gas methane emissions. Methane is responsible for 25 percent of the warming our planet is experiencing today, and the global oil and gas industry is a major source of these emissions. EDF’s work on this issue in North America has shown over  and over again that there abundant, low cost opportunities for the industry to make major methane reductions, and we expect the same is true is globally.

OGCI’s express commitment to pursue better science on the magnitude and sources of oil and gas methane emissions is important. The scientific studies we’ve been part of in the United States clearly show that the official U.S. government methane inventory was understating the magnitude of the problem. A global effort to better measure and report oil and gas methane emissions is likely to show similar results.

Transparent Accounting, New Measurement Technology

Better data and greater transparency is critical to understanding the full dimensions of the problem and achieving accountability for both emissions and reduction commitments. The 10 OGCI companies assert that they have already achieved a 55% reduction in their methane emissions since 2008. But absent greater disclosure of both the methods of data collection and the data itself, we have no way of knowing whether this is true. Parallel efforts, like the Oil and Gas Methane Partnership (OGMP) should help improve the quality and transparency of oil and gas methane data, but OGCI’s commitment to better science is essential.

Similarly, the OGCI commitment to pursue the commercialization of methane reduction technologies and practices can only help make a low-cost reduction opportunity even more affordable, paving the way for methane emission reductions beyond what we know to be cost effective today. Several OGCI members are participants in our Methane Detectors Challenge, which is pioneering innovative methane detection technology that can lower the cost of leak detection and repair at oil and gas facilities, one of the most critical methane reduction strategies we know of.

The three countries of North America – Canada, the United States, and Mexico – have each committed to achieving a 40-45% reduction in oil and gas methane emissions by 2025. To put that in context, a 45% reduction in global oil and gas methane emissions will have the same impact on the climate over 20 years as closing one-third of the world’s coal fired plants. OGCI’s efforts to lower the cost of reducing oil and gas methane emissions could enable us to get beyond to a 45% reduction and beyond, even faster, and at less cost.

CO2 + CH4

Let’s be clear. The global oil and gas industry must take aggressive action to reduce methane emissions and carbon dioxide emissions simultaneously. Both are essential. There is no avoiding the fact that are limits to how much fossil fuels can be burned consistent with achieving the goals of the Paris Agreement. No amount of methane emissions reductions will change this essential fact.

But OGCI’s commitment to reducing oil and gas methane emissions demonstrates that leading global oil and gas companies are aware of the necessary steps that need to be taken to slow the rate of warming now, even as they wrestle with the transition to a fundamentally lower carbon energy future over the long term. We’re ready to help them do both.

By Mark Brownstein

Vocal opposition from parts of the oil and gas business against policies to limit the industry’s heat-trapping methane emissions can sometimes obscure emerging efforts by some companies to tackle one of the sector’s biggest environmental and reputation challenges – and one that’s becoming ever more prominent by the day.

But not everybody in oil and gas is digging in their heels. In fact, there’s a growing list of companies working in various ways to start solving the problem. None of these initiatives alone is likely to get us where we need to be. But together they’re helping pave the way toward a more comprehensive answer that levels the playing field by creating sensible performance standards for everyone in the industry.

One of these emerging efforts is the Oil and Gas Methane Partnership, a voluntary effort to improve emissions reporting and accelerate best practices to reduce methane. Launched at the 2014 United Nations Secretary General’s Climate Summit, OGMP includes BP, Eni, Pemex, PTT, Repsol, Southwestern Energy, Statoil, and Total. The companies agreed to seek out ways to survey, assess and disclose their methane emissions, and find new opportunities to reduce them.

Journey Begins with the First Step

The OGMP recently issued its first annual report, detailing emissions found in nine key sources categories throughout individual operator’s systems. As a serious collaborative effort by oil and gas companies to address methane, it constitutes a solid, strong step toward development of sector-wide best-practices to cut these emissions.

For example, Southwestern Energy reduced emissions more than 11,000 metrics tons by instituting best practices during the phase after a well is drilled and hydraulically fractured, routing more gas to sales rather than venting it to the atmosphere. Elsewhere, Statoil conducted a methane mapping exercise spanning all Norwegian offshore operations (comprising nearly 90% of the company’s upstream assets).

OGMP’s efforts to increase transparency and responsibility are an example others should follow. And indeed, OGMP welcomed its newest participating company Engie, a global integrated energy company, as part of the release of its first-year emissions report – an encouraging sign that the initiative is taking broader hold.

Now the second and most important phase of the companies’ work must begin. More participants should be ramping up the share of their facilities entered into the OGMP program, and all expand the emission reduction activities they’re applying to those facilities.

Plucking Ripe Opportunities

The International Energy Agency says oil and gas methane emissions are among five key pillars to reduce global greenhouse emissions, and that methane emissions must be minimized if natural gas is to have potential to play a constructive role in the transition to a decarbonized energy system.

Fortunately, there are cost-effective strategies to reduce these emissions, creating important opportunities for countries trying to meet their greenhouse-gas goals, as well as for companies looking to reduce product waste while demonstrating more responsible stewardship.

Curbing oil and gas methane generally requires little in the way of new capital or fundamental changes in business practice. Often, it’s as easy as tightening valves and repairing leaks. In places like Colorado, where industry reductions are required, companies are finding that the benefits outweigh costs of regularly checking for leaks.

Follow the Smart Money

With new temperature records being set around the world on a monthly basis, business and policy leaders are demonstrating renewed urgency to reduce greenhouse emissions of all kinds. crucially, investors are also watching much more carefully to see how energy companies are responding, making methane management one more opportunity for competitive advantage for leaders  – or for those that lag behind.  (For more on this, see our latest guide for investors, just released last month.)

Carbon dioxide remains the key to long term climate protection, but methane – which is responsible for about a quarter of the warming we’re experiencing – represents both a major threat and a huge, highly cost effective opportunity to achieve much-needed results quickly. The smart money leaders in oil and gas are the ones taking the challenge seriously.

By Simi George

Yesterday, the Southern California Gas Company filed for permission to resume operations through approved wells at its Aliso Canyon gas storage facility, saying it has completed key safety tests. The facility has been offline over the last year, after it sprung one of the largest gas leaks ever recorded.

Efforts to bring the facility online – and the challenges for the region’s electricity system if Aliso stays offline – underscore the need to address these issues from a broader, longer term perspective.

In addition to supplying gas to homes and businesses, the giant storage field served 17 major gas fired electric generating plants in the region. When a link as important as Aliso Canyon fails, the reliability implications for the electric grid are serious.

Despite official warnings of blackouts, California did not experience any serious electric reliability threats over the summer, thanks to the California Independent System Operator (CAISO) – the entity responsible for keeping the lights on in California – and other agencies, as well as relatively favorable weather and system conditions. But winter could bring new spikes in demand, which means we’re not out of the woods yet.

Electric Generation Plants Served by Aliso Canyon

Short Term Fixes vs. Long Term Solutions

CAISO’s main focus in the immediate aftermath of the Aliso Canyon leak was on short-term reliability, which is understandable. But now that a year has passed, the focus must shift to the long term. CAISO is seeking approval from the Federal Energy Regulatory Commission (FERC) to extend most of its short term measures to address summer 2016 reliability concerns through November 2017.

This means that, subject to FERC approval, short term responses developed through an expedited stakeholder process and intended as temporary measures, are taking on the character of California’s longer term response to the Aliso Canyon incident. The good news is that CAISO has recently announced plans to evaluate certain market design features and consider long term responses to the Aliso Canyon leak through stakeholder processes.

But more needs to be done. And it’s important to start addressing these market gaps now.

Integrating Complex, Shifting Needs

For starters, there is no quick resolution in the cards. Although SoCalGas is asking for permission to restart some operations, Aliso Canyon is unlikely to be returned to historic levels of functionality in the near future. In fact, it may be permanently limited because of regulatory changes.

In addition, California’s gas storage regulatory landscape is poised to change dramatically. The state’s Division of Oil and Gas and Geothermal Resources is formulating new rules for gas storage facilities. Recent legislation, like SB 887, will also increase regulatory oversight of these facilities. CAISO must consider and respond to these developments, so that electric reliability continues to be maintained.

Other agencies have already started considering broader questions. The California Council on Science and Technology is developing a study on the long term viability of gas storage. A federal interagency task force has just issued critical recommendations to reduce the risk of incidents like the Aliso Canyon leak. This broader discussion is incomplete without considering underlying CAISO market design gaps.

The Need for Better Gas Electric Coordination 

A key lesson from the Aliso Canyon incident is the risks of overreliance on gas storage. These risks are exacerbated by the misalignment between the timing of the electric and gas markets.

The basic challenge is that gas fired generators are required to determine how much gas they need before receiving electric dispatch orders from CAISO. California generators schedule their gas for the following day before they bid into CAISO’s day ahead electricity market. Because generators must schedule gas supply before they receive electricity dispatch awards from CAISO, they’re effectively forced to guess their gas needs, increasing the likelihood of imbalance.

Imbalance refers to the difference between how much gas a shipper causes to be delivered into the pipeline relative to how much gas is actually burned by that shipper. Shippers are required to maintain imbalances within a certain band called a tolerance band. When trading imbalances with other shippers isn’t feasible, shippers often depend on storage withdrawals or injections to adhere to the tolerance band, increasing reliance on gas storage facilities like Aliso Canyon.

Getting the Markets Right

The federal interagency report recommends that the timing of information relating to energy bidding and/or gas nomination processes be improved to enhance coordination between the gas and electric systems. CAISO’s position is that the costs of implementing changes needed to better align gas and electric market schedules outweigh the benefits.

But this remains a subjective, qualitative assessment that is not backed by hard numbers. A quantitative analysis would allow CAISO to verify if its assessment is supported by data.

CAISO must also address market gaps relating to price formation. When generating resources aren’t properly compensated to reflect the value of their services to the grid, price signals will be distorted, preventing the right levels of investment in resources needed by the electric grid.

CAISO’s current market design doesn’t allow generators to reflect sub-day variations in fuel costs in their market bids, muting price signals reflecting the true costs of gas fired generation. It also doesn’t allow generators’ actual costs of gas procurement to be reflected in their market bids (a gas price index is used to calculate fuel costs), thereby obscuring price signals in the wholesale electric market.

The Road Ahead

Fixing these and other gaps in CAISO markets would go a long way to addressing the reliability issues raised by the Aliso Canyon incident, and help reduce overreliance on gas storage. If there’s a good time to consider the longer term implications of Aliso Canyon’s limited operability and the underlying market design gaps, it is now. Focusing on these issues is critically important given California’s vision of a cleaner, more renewable electric grid.

 

 

By EDF Blogs

By Daniel Roda-Stuart, Fellow

With oil and natural gas production, it’s not only the industry that benefits monetarily. Mineral rights holders (the people who actually own the oil and gas deep below the earth’s surface) benefit too. Depending on where you look in the United States, who owns these mineral rights varies. In many places those minerals are owned by individuals and in other situations it’s the federal or state government. In the Western U.S., it can often be Native American tribes that own the rights to these resources. And the revenue from the production of these tribal resources can be invaluable for funding education, health care, and other programs. So, what happens when faulty equipment and poor practices allow valuable natural gas to escape to the atmosphere before making it to the sales line? It can result in millions of dollars of lost royalty revenue for Native American tribes.

A recent EDF analysis focuses on the value of this wasted gas and the financial impacts to the Northern Ute tribe in the Uintah Basin of Northeastern Utah.

Mineral Rights Surface Location Lower Upper Lower Upper Tribal Base Emissions [mcf NG/yr] 1,242,531 1,380,590 3,141,158 3,490,176 Tribal Flaring/Venting [mcf NG/yr] 169,897 188,775 376,513 418,347 Tribal Liquids Unloading [mcf NG/yr] 29,791 33,101 240,613 267,348 Total Tribal Waste [mcf NG/yr] 1,442,219 1,602,466 3,758,284 4,175,871 Value of Wasted Gas at 2.85 $/mcf [$/yr] $4,110,325 $  4,567,028 $10,711,108 $11,901,232 Value of Lost Royalty at 18% [$/yr] $739,859 $822,065 $1,928,000 $2,142,222 Value of Lost Royalty at 20% [$/yr] $822,065 $913,406 $ 2,142,222 $2,380,246

 

Natural gas is considered wasted if it could have been captured, yet was either intentionally or unintentionally released to the atmosphere via flaring, leaks or venting. Accidental leaks, equipment operation and malfunctions, and routine flaring and venting are all significant sources of wasted gas.  The analysis found that on Northern Ute reservation land, the value of wasted gas was up to $12 million per year. This translates to lost royalties to the tribe of between $750,000 to $1 million per year. And to put this in a different perspective, this lost gas would have been enough to meet the needs of 60,000 Utah households (or over 80% of the households in Salt Lake City) for a year.

This wasted gas not only has a monetary value, but has significant climate and health impacts as well. Methane is the primary constituent of natural gas and has a greater near term global warming potential than carbon dioxide. Volatile organic compounds found in natural gas also contribute to the formation of ozone pollution, which has significant impacts on local air quality and is leading to unhealthy air in the area. In fact, the Uintah Basin t is out of compliance with federal, health-based ozone standards. A 2012 study showed that reduced concentrations of ozone in the United States would result in thousands of avoided ozone-related premature deaths each year. Improved oil and gas operations in the basin would result in lower concentrations of ozone and better air quality.

However, the good news is that cost effective avenues exist to ensure that the Northern Ute tribe receives its fair share of royalties, and that those who live in the basin have access to the clean air they deserve.

New rules currently being finalized by the Bureau of Land Management aim to reduce methane emissions from oil and gas production on tribal lands, and will reduce the amount of wasted gas to ensure royalty-holders receive their fair share. Forthcoming actions from the Environmental Protection Agency (EPA) including a Federal Implementation Plan to improve air quality on tribal lands should also mean healthier air for local communities if they adequately target pollution from oil and gas operations.

Strong measures like these are needed to guarantee that concrete improvements to air quality and resource management come to fruition. Policies from federal, state and tribal regulators that target methane emissions will protect the rights and interests of too often-overlooked tribes, fight the long-term impacts of climate change, and protect the health and well-being of local communities.

 

By Tim O'Connor

When the gusher of methane pouring out of the Aliso Canyon natural gas storage field was discovered last October 23, it almost instantly transformed the sleepy Los Angeles suburb of Porter Ranch into the site of one of the biggest environmental disasters in recent history. It would ultimately take four months to stop the massive underground leak.

Now, a year later, the question: What’s been done to fix the problem, and to prevent future blowouts – either at Aliso Canyon, or the 400 similar facilities in more than 30 states? The answer is, while there’s been some progress, it’s not nearly enough.

Crumbling Infrastructure, Weak or Non-Existent Rules

These sites aren’t just a health and safety risk to their neighbors. Methane is a potent greenhouse gas, with 84 times the warming power of carbon dioxide over 20 years. Old age only makes problems more likely – and more expensive when they occur.

The 60-year-old Aliso Canyon facility is one of the largest of its kind, and it was not in good shape when one of its wells started leaking uncontrollably. There weren’t sufficient state or national rules requiring operators to check equipment for damage, or to make timely repairs. Owner SoCalGas has since spent over $700 million on cleanup, and multiple lawsuits have been filed claiming millions more in damages. But even now, because of lax or non-existent policies, it’s unclear whether any laws were actually broken.

That’s because as it stands, there are still no federal safety or environmental rules covering gas storage facilities. Where state regulations do exist, they vary widely in quality and effectiveness. Last week, a federal task force that was convened after Aliso Canyon to look at these problems issued 44 recommendations to bring national policy into the 21st century. That’s an important step, but the trick is turning that list into action.

Patching Holes in the Safety Net

To get the job done, we need concrete state and federal standards, with regulators at both levels working together to fix the safety net. (We also need a set market reforms that reduce the nation’s dependence on gas and gas storage.) Here’s a list of steps that ought to come next:

1. The federal Pipeline Hazardous Materials Safety Administration (PHMSA), one of the agencies on the task force report, is crafting rules regulating gas storage facilities for the first time. It’s imperative that they get the first phase done by the end of the year. (The agency itself recognizes these first steps won’t be enough, and that more robust action is necessary, but it’s vital to get moving now).
2. As a starting point, PHMSA plans to base its rules on guidelines developed by industry. However, these were never designed to act as regulations, or to cover everything that needs to be done at gas storage facilities. For this effort to become anything more than industry self-policing, PHMSA must couple that guidance with active oversight and stronger standards of its own.
3. While federal rules for underground gas storage will be a first, all states enforce basic well construction principles (some have also had specialized storage rules for years) that neither the industry's gas storage guidance nor PHMSA are yet addressing. It is important that PHMSA make use of this state expertise and that it not disrupt the basic state requirements.
4. PHMSA also needs to develop regulatory capacity that it currently lacks. For any new policy to be effective, the agency will need increased resources and additional staff who understand the complexities of gas well engineering, construction and operation.
5. States should enhance their gas storage rules with help from a forthcoming Interstate Oil and Gas Compact Commission and Groundwater Protection Council guidance document with regulatory considerations on the topic.

There’s plenty for California in particular to do at the state level, and that process is also well under way. Although drafts of permanent regulations we’ve seen so far leave room for improvement, the state’s proposed new rules are still likely to be the most comprehensive in the nation, and we expect California's rules to exceed PHMSA's in many areas when they come out early next year.

The agency in charge in California is the Division of Oil, Gas, & Geothermal Resources, known as DOGGR, part of the Department of Conservation. That includes deciding when (or whether) Aliso Canyon can reopen. SoCalGas is reportedly finishing required safety testing of the Aliso Canyon storage wells, and is expected to file for that permission soon. DOGGR needs to take every precaution before allowing injection and production to resume.

The agency has promised to put all data related to the restart decision online; EDF and many others will be watching closely.

While we hope the PHMSA rule is good news for gas storage-related safety and environment around the country, it's going to be a multiyear process to get the federal rule up to the quality level that Americans deserve. In the meantime states and PHMSA will need to work together closely to minimize gaps in coverage, especially on basic but critical topics like well drilling, casing, and cementing – the best way to prevent well leaks is to build wells right in the first place.

There’s been a lot of progress since Aliso Canyon, but there’s still a long way to go before we can rest easy – and there is always room for improvement. Porter Ranch was not the first community hit by this kind of disaster. With a lot of effort and a little luck, we hope to make it the last.

By Felice Stadler

While air quality as a whole has been improving across the United States over the past few decades, many areas that are ground zero for the nation’s expanding oil and gas industry have shown an increase in dangerous pollutants. In fact, states with substantial drilling activities saw worsening air quality recently, according to the American Lung Association’s last State of the Air report.

That’s because the oil and gas industry is the largest industrial source of volatile organic compounds (VOCs), which mix with NOX and sunlight to form ground-level ozone, also known as smog. Additionally, existing oil and gas sources do not face comprehensive nationwide limits for this type of pollution.

This smog has tangible effects, though. In late September, the Clean Air Task Force released a report detailing that the amount of smog forming emissions from the oil and gas sector could lead to as many as 750,000 asthma attacks.  The report, called “Gasping for Breath,” similarly documents that these emissions could lead to more than 500,000 days of school missed and 2,000 asthma-related emergency room visits. Accompanying the report is an interactive map, developed by Earthworks, which displays data about the location of active oil and gas wells, and areas of threats to public health.

This week, in a move forward, the Environmental Protection Agency (EPA) has finalized emission reduction guidelines for states to address ozone smog emissions from oil and gas operations, known as Control Technique Guidelines. While this may seem like a small technical step, the Guidelines will bring urgently needed health protections to citizens living adjacent to or downwind of oil and gas operations.

Once fully implemented by states, the Guidelines are estimated to reduce VOC emissions by about 80,000 tons per year, methane emissions by about 200,000 tons per year, and other hazardous air pollutants by about 3,000 tons per year. The Guidelines include recommendations for storage tanks, controllers and pumps, and compressors, and include leak detection and repair requirements, utilizing available technologies and common-sense approaches that help save natural gas that otherwise would go to waste.

Standards like these to reduce smog pollution can have a big impact. In Wyoming, for instance, a key oil and gas region started to experience poor air quality as drilling expanded. However, after that part of the state adopted common sense protections to reduce air pollution from the oil and gas industry, smog levels started to improve, providing health benefits to nearby communities.

When the prevalence of smog in a given area exceeds national health-based standards, states are required to submit a plan to EPA on how it will bring the area’s air quality back to healthy levels. That’s why the new Guidelines, which build on lessons learned from leading states including Colorado and Wyoming, are so important.

In their plans to cut air pollution from the oil and gas industry, States can use the ready-to-adopt, cost-effective blueprint laid out in the new Guidelines to achieve required emission reductions and protect the health of communities and families.

These Guidelines, which apply to areas with moderate and severe smog pollution, will especially benefit communities in Pennsylvania and Texas , where ozone pollution is endangering communities and state regulations haven’t kept pace with the rapid growth in oil and gas development.

The Guidelines are a good and important step forward to protect communities from smog-forming pollution, but there are key additional steps EPA can take in the near-term to strengthen the guidelines and improve the measures at states’ disposal to improve air quality.

For example, in its draft Guidelines, EPA proposed exempting lower-producing wells, which account for over 70% of existing wells and can be associated with substantial emissions. Fortunately, the agency declined to finalize this exemption.  In the final guidelines EPA has sought additional information on how best to address these sources, and we urge the agency to move forward expeditiously to close the harmful pollution loophole to protect the health of our communities and families.

Over 12 million Americans live within a half-mile from oil and gas facilities, and many more live downwind from the smog caused by these operations. These communities urgently need the clean air protections that these new Control Technique Guidelines will begin to deliver.  Even so, they are just one piece of the clean-air puzzle, and we must move forward toward final, comprehensive standards that address both new and existing sources of pollution, without exceptions.

By David Lyon

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This week sees the release of new figures from the U.S. Greenhouse Gas Emissions Reporting Program (GHGRP), which includes self-reported, large facility-level emissions data for 2015.

The good news is that methane pollution from the oil and gas industry is down slightly, thanks to a combination of stronger safeguards starting to take effect, along with a decline in new drilling projects due to an overall market cooling.

Operators report that methane pollution from onshore oil and gas production is down about 3.8% in 2015 from 2014.  However, overall greenhouse gas emissions from all reporting segments in the oil and gas sector are only down 1.6%.

Sensible methane standards are starting to work

Some in industry will undoubtedly point to the new numbers as evidence that new emission rules are unnecessary. In fact, the figures show that sensible safeguards are responsible for much of the progress.

For example, the data from 2011-2015, oil and gas companies report a decline in methane emissions from well completions – an area the EPA began regulating in 2012. Since October of that year, operators have been required under an early phase of EPA’s New Source Performance Standards (NSPS) to either flare (burn off) or capture emissions with Reduced Emissions Completions (RECs), or use “green completion” methods that capture and route excess gas back into the system.

What we don’t learn from the Greehouse Gas Reporting Program numbers

It’s also important to note that many methane emissions are still unaccounted for in these new figures, which are self-reported by industry, and only include facilities emitting over 25,000 metric tons of CO2 equivalent per year. Only about half of U.S. oil and gas wells are required to report their emissions to the GHGRP. This is unlike the EPA’s Greenhouse Gas Inventory, which is an agency-prepared accounting of all man-made greenhouse gasses from across all sectors.

Greehouse Gas Reporting Program methods can also underestimate emissions since they often require use of emission factors rather than direct measurements.

For example, the Aliso Canyon storage facility in Southern California that sprung a massive, four-month leak last October reported annual emissions of only about 1,400 metric tons of methane, even though official estimates predict the actual amount of pollution during the leak was closer to 100,000 metric tons. This means that the monthly emissions rate during the leak was about 215 times higher than reported. Had Aliso Canyon been included in the GHGRP, it would show emissions were 7% more than reported.

We don’t know what other catastrophic super-emitter events have gone undetected and underreported.

Bottom line: Emissions are still too high

EPA’s much more comprehensive inventory finds that the oil and gas industry is emitting nearly 10 million tons of methane pollution a year —  34% higher than previously estimated. And a new study, out this week in Science, shows that methane emissions attributable to fossil fuels are at least 20-60% higher than reported.

So while we may be making progress addressing emissions, it’s clear methane continues to be a huge problem for our public health, economy, and climate.