By Drew Nelson

Mexican President Peña Nieto today formalized Mexico’s plan to join the U.S. and Canada in making oil and gas methane reductions a national priority, marking yet another country taking leadership to address this extremely potent greenhouse gas. The three leaders agreed that each of their countries would develop rules to cut up to 45 percent of methane escaping from across the continent’s oil and gas industries by 2025. It’s a pledge that once fully realized would have the same 20-year climate effect as taking 85 million cars off the road. Featured among a package of broader energy and climate commitments, the common methane reduction goal is a centerpiece.

This announcement is a milestone for North America energy integration and cooperation. But, it’s also an important moment for Mexico. The commitments Mexico is making both in-country and as part of the continental pact on methane, distinguishes Mexico as a clear world leader on energy and climate issues, along with the U.S. and Canada. By taking advantage of low-cost, oil and gas methane reductions, Mexico can make an immediate down payment on its climate goal – cuts can deliver about 10% of the greenhouse gas reductions Mexico pledged, and all at a cost savings. The key will be implementation and what steps Mexico takes next are critical. 

Mexico’s commitment is especially encouraging given the changing landscape of the country’s oil and gas industry. Recent historic changes opened up the industry to private investment for the first time since 1938. While state-owned oil and gas company Pemex has already set an example on methane by joining the Oil and Gas Methane Partnership, a voluntary UN-sponsored effort to improve transparency and accelerate best practices to reduce methane emissions, Mexico’s actions today will ensure future private developments are defined by the same environmental excellence.

This announcement is also evidence of nations making good on its Paris commitments. The U.S., Canada and Mexico specifically highlighted oil and gas methane as a way to meet their respective climate goals and today’s agreement shows forward momentum to implement the policies required that will deliver on their international targets.

Why Methane Matters

Responsible for about 25 percent of the warming we feel today, methane is a potent gas that packs 84 times the warming power of carbon dioxide over a 20-yr time span.

The oil and gas industry is the largest industrial source of methane emissions globally. Luckily, technologies exist today that can address the industry’s methane problem at little to no cost. Analyses by ICF International have shown this to be true across all three North American countries, despite today’s historically low gas prices, while in Mexico these reductions are the lowest cost of all.

The immediate climate impact of methane, coupled with readily-available, cost-effective solutions to address the problem from oil and gas, make curbing methane emissions across the supply chain an obvious target for action. No climate investment has a higher impact for such a low cost.

Signs of Momentum

As the largest combined producer of oil and gas, North America has a big role to play in establishing a road map that can jump start the methane cuts needed worldwide.

According to Rhodium Group, roughly 3.5 trillion cubic feet of methane escaped from the global oil and gas supply chain in 2012. That amount of methane, equal to about 3% of global natural gas production, has the same near-term climate impact as about 40% of annual global coal combustion. And the problem is projected to get worse. Without action, global oil and gas methane emissions can be expected to increase almost 20% by 2030, compared to a projected 10% increase in carbon dioxide from energy use.

But there is reason for hope. In the US, unprecedented federal rules aimed at limiting pollution from new oil and gas infrastructure nationwide were finalized in May, with a promise to go after existing sources. President Obama’s pledge to cooperate with Mexico and Canada on a common methane target continent-wide reinforces the importance of the U.S. moving ahead on existing source rules. Canada also announced that it will propose its national methane rules next year to ensure Canada fulfills its part.

Investors totaling $3.6 trillion issued a letter calling for more action on oil and gas methane, in response to the US-Canada efforts.

Last month, Denmark, Finland, Iceland, Norway, and Sweden joined the U.S. in agreeing to develop a global oil and gas methane goal, where the North American methane pact will be an important contribution to that process.

Later this year, oil and gas producers involved in the Oil and Gas Methane Partnership will also issue a report outlining the actions they have taken and emissions they have avoided by participating in this international partnership. Taken as a whole, these actions show there has been tremendous improvement in the global response to reducing oil and gas methane, but there is more yet to do.

A Catalyst for Global Action

North America has been a catalyst for global climate action in the past, and it can be again. In 2009, the three countries proposed a joint amendment to the Montreal Protocol, which catalyzed global action to phase out hydrofluorocarbons (HFCs) – another dangerous greenhouse gas. Those efforts are on track for completion later this year.

If today’s announcement sparked similar global commitments, the benefits would be significant. A global reduction of methane emissions by 45 percent would have the same climate impact over 20 years as closing one-third of the world’s coal-fired power plants.

While a North American methane commitment gets at a sizable chunk of the problem, global action will be necessary to meet the ambitious goals laid out in Paris and truly turn the corner on warming. The U.S., Canada, and Mexico have shown amazing leadership today; now other countries must follow suit.

By Tim O'Connor

California’s oil and gas industry emitted approximately 270,000 tons of methane in 2014 – nearly three times the gas released during the Aliso Canyon storage facility disaster. This wasted methane – primarily natural gas – is worth over $50 million, and would have met the heating and cooking needs of about 400,000 homes in the state, had it not been lost to the atmosphere.

Notwithstanding the fact that methane pollution damages the climate and co-pollutants can cause dramatic public health problems, losing natural gas is a wasteful practice. However, as demonstrated during a 2-day joint agency symposium in Sacramento earlier this month, there are businesses that are ready, willing and able to help the state reduce leaks by deploying cutting edge technology, many of which are based in California.

Innovative solutions on display

The symposium featured companies, like United Electric Technologies, Safety Scan, Rebellion and Heath Consultants, that showcased technologies and capabilities being used today to reduce methane emissions across the U.S. in the area of oil and gas production, transmission, and natural gas storage.

At the same time, ARPA-E of the U.S. Department of Energy, EDF, the Pipeline and Hazardous Materials Safety Administration, and others highlighted where this technology is going – with smaller, faster, cheaper, more versatile, and more precise instruments entering into the market at breakneck pace.

And in the area of natural gas utility system leak detection, companies like Los Gatos Research, Picarro, Enview and several others demonstrated how new technologies can improve traditional integrity management systems, helping companies to cut costs and better predict where investments can achieve the highest level of safety and environmental improvement.

California’s efforts need a strong backbone

With solutions available and growing, California is in the midst of a regulatory overhaul to cut methane emissions from the oil and gas sector. This includes proposed regulations at the Air Resources Board (CARB) and proposed Best Practices recently released by the Public Utilities Commission (CPUC).

Unfortunately, though not unsurprisingly, these efforts face stiff opposition as oil and gas companies push back against stringent leak detection and repair rules.

For example, as a result of industry pressure, the recent rule draft by CARB for oil and gas production leaves a serious loophole. By allowing operators to inspect less when they find fewer leaks, CARB’s proposal creates a powerful and perverse incentive to avoid finding and reporting methane leaks, and a baked-in reason to avoid fixing them quickly. Strengthening the proposed rule to require permanent quarterly inspections will help prevent leaks before they do damage to public health and the environment.

Similarly at the CPUC, some major gas utilities have pushed back against a requirement to use cutting-edge leak detection equipment, including those highlighted during the symposium, to survey distribution systems, even though this equipment can find small leaks faster than current methods. This equipment and the data it produces allows utilities to engage in better integrity management, predictive modelling and workforce deployment – practices that can reduce costs, and improve safety and environmental performance, across the board.

Cost effective opportunities

To ensure CARB and the CPUC stay strong and implement rules that eliminate waste and protect communities and the environment, a look at the economics of methane abatement is key.

Concerns about costs and feasibility raised by industry opponents seeking weaker standards simply don’t hold water – especially when dozens of companies are ready to do the work that California needs to protect its environment and communities.

Studies have found that we can significantly reduce oil and gas methane pollution for only around one penny per Mcf of natural gas. And with leaks responsible for approximately 50 percent of all methane emissions, reducing this pollution through commonsense measures like leak detection and repair, is among the most cost effective steps we can take today to cut energy waste.

Strong rules make good business sense, and additional economics make the case even better

Quarterly leak inspections and rigorous best practice standards for oil and gas operations stimulate gas savings, new business models, and better investment decisions. However, at the root of each cubic foot of gas saved is the pollution that otherwise would have gone into communities – emissions that produce smog and contribute to climate change.

Rules to reduce methane pollution from the oil and gas industry simply make sense, for our communities, such as those in Los Angeles whose health and well-being is impacted by oil sites located near their homes, schools, and playgrounds, and for our world, as the methane pollution from California’s oil and gas infrastructure helps to accelerate the worst impacts of climate change.

For the sake of our economy, our health and our planet, the state needs finalize the strongest standards possible that make use of newly available technologies to cut methane pollution.

By EDF Blogs

By Jayant Kairam and Timothy O’Connor. 

Adding insult to injury, Californians learned this spring that the disastrous four-month methane leak at the sprawling Aliso Canyon natural gas storage facility could result in a new problem: outages.

The failure at Southern California Gas Company’s massive storage site exposed a critical weakness in the state’s energy system. Densely populated Southern California is over-dependent on natural gas from a single provider.

As a result, a vast area stretching from San Diego in the south to Los Angeles and San Bernardino County in the east may face power and gas shortages during the hot summer and cold winter months, a recent report by a group of state regulatory agencies warned.

Will lights stay on?

Some analysts have suggested the possibility of power and gas outages might be exaggerated, but there’s no debate that the region is cutting it way too close for comfort.

Millions of people and thousands of businesses could be exposed to costly service disruptions if the region’s 17 gas-fired power plants can’t operate as expected and other gas needs go unmet.

It’s going to take time for the state to diversify its energy mix and create a stronger, more resilient system.

There’s recognition today that by balancing market incentives we can fuel competition between natural gas and clean energy resources to gradually transition to a more dynamic, reliable, and modern electric grid.

In the meantime, there are four steps regulators, utilities and consumers are already taking – and which must now be fully utilized and expanded to relieve immediate pressure:

1. Speed up deployment of demand response programs

This tool rewards customers for shifting their energy use to times of day when there is less demand on the power grid, or when renewable energy is more abundant. In turn, demand response reduces strain on the system when it’s most likely to hit or exceed maximum capacity.

Programs such as California’s Flex Alert, the Demand Response Auction Market and so-called automated demand response programs are all models that should be maximized.

2. Help consumers take advantage of time-of-use pricing

A different approach uses the power of prices to encourage consumers to adjust their energy use to times when the grid is not stressed – and renewable energy sources are plentiful. In addition to conserving energy, this program reduces bills.

This option is being piloted in California and already in use in other states. Southern California Edison’s pilot has more than 20,000 participants. If the utility educates consumers, they can take full advantage of this new program as we move into the summer months and the risk for power outages rises.

As SoCal braces for Aliso Canyon-related blackouts, these energy programs can help
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3. Invest in energy efficiency

Energy efficiency investments in residential and commercial buildings are among the most cost-effective and fastest ways to reduce peak energy and natural gas use.

California recently authorized an additional $250 million to target efficiency measures to households most affected by the Aliso Canyon leak, and to capture greater energy savings. These efforts can ease demand and reduce bills, especially in low-income communities. It’s critical that utilities fully leverage these funds.

4. Fast-track energy storage

Utilities and third-party providers can quickly build, connect and use home batteries and other energy storage systems to balance high energy demand. A leader in this area, California is already requiring utilities to invest in such projects – but more needs to be done.

Om a direct response to the Aliso Canyon disater and subsequent power reliability issues, the state’s Public Utilities Commission recently authorized fast-track procurement and deployment of this rapidly emerging technology to minimize the risk of outages. It’s an opportunity Southern California doesn’t want to miss.

California already generates more than one-quarter of its energy from renewable sources, and plans to boost that to 50 percent by 2030.

Turning the Aliso Canyon disaster into opportunity

California already generates more than one-quarter of its energy from renewable sources, and plans to boost that to 50 percent by 2030. By diversifying its energy portfolio for the long-term and designing a more competitive market, this state – like others – can become less dependent over time on one single fuel source.

But as the risk for power outages shows, these targets alone are not enough.

By rapidly scaling up programs that exist today, in addition to doubling down on clean energy investments, we can turn the Aliso Canyon disaster into an opportunity while keeping the lights on and our economy humming.

It’s what Americans expect.

This post originally appeared on our EDF Voices blog.

By Drew Nelson

In partnership with Mexico’s Mario Molina Center and Canada’s Pembina Institute, EDF released a policy brief in Mexico City this week that illustrates that national action in the United States, Canada and Mexico could cheaply and quickly eliminate 232 billion cubic feet of methane from the North American oil and gas industry.

Titled “North American Climate Leadership: A road map for global action,” the brief synthesizes analyses included in ICF’s North American report and its research conducted in the U.S. (2014), Canada (2015) and Mexico (2015). All of ICF’s analyses found that reducing methane from the oil and gas supply chain is cost-effective and environmentally beneficial. Even at today’s historically low gas prices, the cost of capturing methane would add just one penny to the current price of gas, based on the cost of solutions and the ability to sell the recovered gas.

Choosing to highlight these opportunities at an event in Mexico City was no accident. As one of the world’s largest oil and gas producing countries, Mexico could make significant headway in reducing its climate emissions by addressing methane quickly (now), as the United States and Canada did this spring when they announced a pact to reduce their oil and gas methane emissions 40 to 45 percent.

Mexico has already taken important steps toward methane reductions within its oil and gas industry, including them in their UN climate commitments, or INDCs. PEMEX has shown leadership by joining the Oil and Gas Methane partnership, a voluntary U.N. initiative for companies to report on and reduce methane emissions from their operations. Now is the time for Mexico to formalize these commitments by setting a similar 40-45% methane reduction goal and regulations to achieve it. And the opportunity to do so in Mexico is even bigger than it was in the U.S. and Canada.

According to ICF, Mexico could reduce its oil and gas methane emissions 54 percent below 2013 levels by 2020 – at a cost of 0.79 Mexican Pesos (roughly six cents U.S.) per metric ton of CO2e. A reduction of that size could yield Mexico about 10 percent of its Paris climate commitment, just by taking action in one sector. In contrast, a failure to implement a plan to reduce methane pollution as the country’s oil and gas industry expands due to historic energy reforms made in 2013, will result in higher emissions, making it harder for Mexico to meet its climate commitments.

Further, with reductions coming in the United States and Canada, Mexico can use this as opportunity  to ensure a level playing field for companies that operate in two or all three of the countries and avoid a large number of polluting effects with the entry of private players into Mexico’s oil and gas industry for the first time since the 1950’s. Mexico has clear legal authority to commit to these reductions, and as it was for the United States and Canada, it’s an opportunity too important to let pass.

The time is right for a continental approach to methane reductions. Later this month, President Peña Nieto, President Obama and Prime Minister Trudeau will meet in Ottawa for the North American Leaders’ Summit (NALS), and energy and environment issues are a ripe topic for trilateral cooperation.

After all, it was North American action at NALS that catalyzed global action on hydrofluorocarbons (HFCs), another dangerous greenhouse gas, when the three countries proposed a joint amendment to the Montreal protocol in 2015. Similarly, cooperative action on methane at the next NALS would further solidify the countries’ climate leadership and could catalyze global action. Without question, Mexico joining the United States and Canada methane reduction goal of 40-45% is the largest climate commitment NALS can deliver.

If Mexico matches the U.S. and Canadian reduction goal and enacts regulations to achieve it, North America could see a 20-year climate benefit equal to taking about 85 million cars off the road.

A commitment by Mexico would put an exclamation mark on an incredible six months of North American climate action and continue the leadership these three countries have shown in recent years.

It would also underscore what a steady stream of scientific studies and economic analyses have concluded: that reducing methane from our oil and gas industry is our best opportunity to make a quick and affordable impact on climate change, and that every energy-producing country – large and small – must participate.

Image Source: Wikipedia

By Mark Brownstein

The natural gas industry group Our Nation’s Energy (ONE) Future Coalition released a paper yesterday applying their own set of assumptions to an earlier analysis commissioned by EDF, which had shown that oil and gas methane emissions can be dramatically reduced for about a penny per thousand cubic feet of gas sold. Both analyses were carried out by ICF International.

We always welcome new points of view, but it's important to note the new calculations change key variables in ways that boost the cost of reducing methane emissions while significantly understating benefits of these reductions. An even bigger problem comes when others in the industry public relations machine start to mischaracterize the study.

Despite these changes, the results still end up making what we think is a strong case for sensible regulatory standards to make sure that best practices become the standard practice industry-wide in order to reduce the oil and gas industry’s nearly 10 million metric tons of yearly methane emissions.

Even Slanted Figures Underscore Need for Rules

Before diving into the numbers, let’s first consider the irony here. Having fully conceded that methane emissions are a real and serious problem, numerous industry groups have spent two years arguing that industry already has enough economic incentive to reduce emissions on a strictly voluntary basis, no rules or regulations required.

But yesterday’s report says the cost of making necessary methane reductions is 70% higher than the value of the gas to be saved, pulling the rug out from under the idea that economic self-interest would drive industry to make significant reductions.

Intentionally or not, this report is “Exhibit A” for why strong regulatory standards are necessary.

According to the numbers presented, if left to its own assessment of economic value, the oil and gas industry simply does not have an incentive to act. Of course, this report is not the only evidence of that fact. Clearly there are reductions to be made that the industry is not currently making.

On the other hand, the good news is that even if you allow for high cost assumptions contained in this report, it remains true that we can achieve a 40% reduction in today’s emissions for less than one penny per thousand cubic feet of gas produced. With the right regulatory framework in place this is a problem that can be solved.

A Walk Through the ONE Future Numbers

The new ICF ONE Future Coalition report makes a number of major assumptions that significantly skew the findings toward higher costs and lower benefits.

Outdated, Inaccurate Emissions Figures.

For starters, the findings are based on 2012 oil and gas sector emissions, as published by EPA in their 2014 inventory. But EPA has since updated the inventory not once but twice. In the inventory published in April 2016, current emissions are about 27% higher than the figures used by One Future.

Higher emissions mean that leak detection and repair, along with other measures, would almost certainly reduce even more emissions, making the economic and environmental benefits of avoiding lost methane greater for every dollar spent.

Even if you keep all the other assumptions in the report, we estimate that using updated inventory figures would result in a roughly 45% reduction in oil and gas sector methane emissions for a cost of approximately $0.01 per thousand cubic feet of gas produced, which is squarely in line with estimates in the original ICF analysis commissioned by EDF.

Inflated Costs Estimates.

In our view, the One Future Report exaggerates the cost of compliance, particularly the expenses involved with the core process of leak detection and repair (LDAR). This includes excessively high capital costs for equipment like high flow samplers and remote methane leak detectors that are not actually required for regulatory compliance, as well as inflated labor costs and survey times.

It’s not surprising that industry estimates would come in on the high side here. They’re entitled to make their case. But the figures in the report run sharply counter to data submitted by service providers and technology companies in public hearings and written comments to EPA and the Bureau of Land Management that demonstrate that costs on the ground are low and declining.

• In public testimony to the EPA, Texas-based Rebellion Photonics said its leak detection services cost $250 per site, less than half the $600-per-site cost estimated by EPA in its proposed rule limiting methane emissions from new and heavily modified sources in the oil and gas sector.

• FLIR, which makes optical gas imaging technology, submitted comments to BLM saying “Our surveys of FLIR customers that provide consultant services showed average rates of $250-$350 per visit. Internal OGI programs showed costs that were lower and in the range of $150-170 per site visit.”

• Based on experience under state-level regulations passed in 2014, Colorado officials estimate the costs per inspection to be less than the $550. In recent interviews, Colorado officials indicated that “we really haven't heard concerns about the cost or any difficulty associated with implementation.”

In a recent survey in Colorado, seven out of 10 oil and gas producers surveyed recently said the benefits of regularly checking equipment for leaks outweigh the costs. An economic analysis in New Mexico has shown that compliance costs will amount to approximately two cents on the dollar of annual oil and gas revenues in the state.

Moreover, advanced monitoring technologies like those being developed through EDF’s Methane Detectors Challenge and ARPA-E’s MONITOR Program have tremendous potential to further lower costs and enhance environmental benefits.

Understated Benefits.

The ONE Future report also understates benefits to companies reducing emissions in several important respects.

First, it assumes leak surveys would happen only once a year, yielding only a 40% benefit. EPA and BLM rules require semi-annual, and in some cases quarterly monitoring, while Colorado requires tiered inspections as often as monthly at the largest sites. Real world experience with more frequent surveys – as required by states like Colorado and Wyoming – show substantially greater reductions are readily achievable. The ICF report commissioned by EDF, for example, modeled a quarterly LDAR program with a conservatively estimated 60% benefit.

The ONE Future also significantly underestimates the amount of gas (and hence, the amount of money) saved by reducing leaks. It only counts gas savings in the production segment, leaving out midstream sources like those in the gathering, processing, and transmission segments, which have been shown to account for significant losses – and therefore major savings opportunities. While not every company can fully monetize the value of saved gas, avoiding this waste does have important benefits in reducing industry’s net costs that are clearly not reflected in the report.

Bottom Line

When you add up the changes in the math, the ONE Future Coalition analysis makes a compelling case for why regulation is needed to spur the oil and gas industry to make necessary reductions in methane emissions. The report is also reassuring on the point that technologies and practices are readily available to achieve these reductions.

Even with its higher cost assumptions, the One Future Report reaffirms the point that the oil and gas industry can make a significant reduction in annual methane emissions for marginal additional cost. What’s needed now are the right state and federal regulations to drive it to happen.

By Diane Regas

We know we need massive decreases in greenhouse gas emissions by 2050 if 177 countries are to meet the goals of the Paris climate agreement.

But before emissions go on a steep decline, we need to turn the corner. At Environmental Defense Fund, we have analyzed what it would take to turn the corner by 2020, and zeroed in on a few key actions that will halt the rise in global emissions and make them start to go down. For good.

Christiana Figueres, the United Nations official who led the Paris climate talks, rightly talks about technology, finance and policy – technologies to store and distribute energy, financing to scale the technology we have, and policies to reward innovators who deliver results.

In my home town of San Francisco this week, the Clean Energy Ministerial will bring together innovators, investors and key government officials, marking a shift toward serious focus on achieving the Paris goals.

The energy ministers of the United States, China, Europe and India should heed the terrific work to chart paths for the future (including this global partnership). And this year, they can note three key policies already yielding measurable results.

1. A price on carbon 

A price on carbon rewards those who reduce pollution, and penalizes those who lag behind. It helps market forces spur innovation and make sure we meet our goals. The good news? Some major carbon-emitting nations and states are moving ahead.

Most critically, China has committed to putting a nationwide emissions trading system in place by next year – making the country the global leader in carbon markets.

Sixty-seven jurisdictions have or are implementing carbon markets. Globally, there is a realistic path to doubling the amount of greenhouse gas emissions covered by carbon pricing mechanisms, from about 12 percent today to 25 percent of global emissions by 2020.

3 key energy policies that can help us turn the corner on climate
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2. America’s climate action plan 

In the U.S., an ambitious plan is already under way, one that will protect people from diseases such as asthma, reduce carbon pollution, and boost clean energy.

Maybe the best news is that the centerpiece, the Clean Power Plan, is designed to reduce household energy bills by about $80 per year by 2030, while driving down pollution. We are also moving to reduce methane emissions.

Make no mistake, the U.S. still has work to do. We will need new laws and policies in the next few years to get us on track to compete in a low-carbon future, and to meet our commitments made in Paris.

3. Policies accelerating the clean electricity grid

Every environmental advance in the U.S. has been preceded by experimentation and progress in the states. The urgent work of decarbonizing our electricity system is no different and for that, we need significant advances in transparency and dynamic pricing.

Every environmental advance in the U.S. has been preceded by experimentation and progress in the states.

Transparency: The grid of the future envisions home appliances, electric vehicles, rooftop solar, and smart thermostats operating seamlessly with the power grid. And, today, more than 50 million smart meters connect American homes and businesses to the grid. Unfortunately, information is almost always hidden from the people who could use it to reduce costs and pollution.

In Illinois, EDF and the Citizens Utility Board developed a solution to create transparency – now adopted by state regulators and local utilities. Energy entrepreneurs such as Nest and Google plan to use the data to help customers save energy and money.

Dynamic pricing: For 20 years, the Nobel prize-winning theory of dynamic pricing has benefitted a range of industries from hotels to Uber. Dynamic pricing could also benefit utilities, and smart states are taking notice. By 2019, nearly 9 million residential customers in California will have “time-of-use” as their default pricing, for example.

We do not have to choose between a healthy environment and shared prosperity. If we raise our ambitions and reward those who do the right thing, we can turn the corner on climate change by 2020.

Photo credit: U.S. Department of Energy

This post originally appeared on our EDF Voices blog.

By Drew Nelson

Last week’s White House announcement marked an important step in the march toward global climate action. The U.S.-Nordic Leader Summit Joint Statement, issued by the United States, Denmark, Finland, Iceland, Norway and Sweden, underscored the need for a broad climate strategy, one that prioritizes reductions in both long- and short-lived climate pollutants across key industry sectors.

In addition to addressing renewable energy, HCFs, international aviation emissions and deforestation, the statement included a commitment for each country to develop a national plan to reduce emissions of methane, a powerful short-lived greenhouse gas. This is critical, given a wave of scientific data that highlights the need to reduce methane emissions from the oil and gas supply chain. The agreement is another sign that methane is starting to get the international attention it deserves, as reducing oil and gas methane is one of the most impactful and cost-effective actions we can take to slow the current rate of warming.

Why Methane Matters

Short-lived climate pollutants like methane impact the climate differently than long-lived pollutants such as carbon dioxide. That’s because methane is 84 times more powerful at absorbing heat than carbon dioxide for the first 20 years after it is emitted. Carbon dioxide builds up in the atmosphere, and its cumulative impact dictates how warm the planet gets. Methane, on the other hand, is a potent, short-term gas that does its damage more quickly by influencing how fast warming happens now.

Developing strategies to reduce both carbon dioxide AND methane is necessary to effectively deal with climate change. Fortunately, several reports (see here, here and here) from energy analysts at ICF indicate that there are many low-cost technologies available to make sizable cuts in oil and gas methane emissions, the largest global source of industrial methane.

More than 3.5 trillion cubic feet of methane escaped from the global oil and gas supply chain in 2012, according to Rhodium Group. Yet only a handful of countries (the United States, Mexico and Canada) included oil and gas methane reductions in their commitments leading up to Paris. The Nordic countries and the United States explicitly reconfirmed their commitment to combat methane as part of their respective commitments to implement the Paris Agreement. Hopefully, this is a first step in expanding the number of countries that highlight oil and gas methane reductions in their next round of commitments.

Strong Global Action is Required

The countries also agreed to “drive down” their oil and gas methane reductions through “sound regulation and targets.” The United States has shown significant leadership over the last few months to develop and implement such regulations, including EPA’s new clean air standards that limit emissions of methane from new and heavily modified sources in the oil and gas industry.

The Nordic countries welcomed the announcement of the U.S.-Canada 40-45 percent oil and gas methane reduction goals and agreed to encourage other countries to join this effort. Separately, the six countries also committed to support the development of a global oil and gas methane reduction goal. Such a step would be a huge win in the fight to reduce these potent emissions. For context, reducing global oil and gas methane emissions 45 percent would have the same 20 year climate impact as closing 1,000 of the world’s coal power plants. This is a climate opportunity we can’t afford to miss.

A Role for Companies

Regulation and governmental action will be important, but oil and gas companies around the world must also play a constructive, proactive role in reducing their methane emissions. Today, few companies report their methane management plans, and none share quantitative targets to reduce methane emissions.

But some leading companies have stepped up. BP, Eni, Pemex, Southwestern Energy Company, Statoil, Total and others have joined The Oil & Gas Methane Partnership. The first OGMP report, outlining the methane reductions achieved by these companies, will be issued later this year—a solid step toward corporate responsibility and transparency. The U.S.-Nordic countries noted the value of this partnership and encouraged others to join and set their own company-wide reduction goals.

Together, the flurry of actions taken in U.S. states, Canadian provinces and at the federal level in both countries, along with last week’s Nordic Statement and the early leadership among some oil and gas companies all demonstrate strong momentum building on this important global issue. As other oil and gas producing countries and companies around the world recognize the impact their methane emissions have on the climate and the affordability and effectiveness of reducing them, we anticipate others will step up to take similar actions. By leveraging these low-cost, high value investments, they can show the world how they are becoming part of a climate solution.

Image Source: Wikipedia

By Aileen Nowlan

To get anything accomplished, you can’t let the perfect be the enemy of the good. One unsung story buried in last week’s release of EPA’s new source methane rules may make good options even better – driving innovation and offering industry more options to meet the methane challenge.

The new rules target a pervasive problem: methane – the primary component of natural gas – leaking throughout the oil and gas value chain. Methane emissions represent a waste of saleable resources, a reputational risk, and a contributor to both poor local air quality and climate change.

Under the EPA’s framework, oil and gas operators must take steps to minimize  emissions from new and modified sources – from finding and fixing equipment leaks to swapping out equipment to reduce methane vented from pneumatic controllers and pumps,. Companies in Colorado working to comply with the state’s similar rule have reported that putting similar measures in place are cost-effective, even generating positive returns from selling the captured gas.

But what should an agency do when the solutions available now are reasonable but not perfect? Existing strategies don’t monitor all the time—only a few days a year. So leaks and malfunctions can be missed, or leak for months before they are fixed.

New technologies–emerging from research labs, startups and mature companies in adjacent sectors – can help spot leaks at lower cost, including through continuous monitoring. EDF’s Methane Detectors Challenge will launch pilots of sensitive, rugged, low-cost continuous methane monitors with oil and gas operators. Due to collaborative partnerships, these innovative technologies are advancing rapidly.

In a regulated industry like oil and gas, adaptability as technology progresses is key to ensuring operators can use more effective and lower-cost solutions as they become available.  That insight led many innovators, forward-thinking oil and gas operators and EDF to call on EPA to include a pathway to innovation in the final rule.

Path open – and process in place – for emerging technologies
We were delighted to learn that the finalized new source standards offer oil and gas companies “the opportunity to use emerging, innovative technologies to monitor leaks.” The rule acknowledges that “leak detection technology is undergoing continuous and rapid development and innovation.” As a result, it establishes a process for evaluating any alternative work practice that achieves equal or greater emissions reductions. The rule also lists criteria for evaluation—so innovators and operators can get to work pulling together submissions.  This sets a floor for environmental stewardship, and gives an incentive to do better.

Any proposed alternative will need to be well tested and should be assessed carefully – a pathway for innovation is not an invitation to cut corners. But being open to alternative technologies shows faith in ingenuity. The methane experience may also offer lessons for how we approach other environmental challenges. Setting a level playing field and laying out the ground rules will help entrepreneurs and companies work out and deliver the better, faster plays.

Some old-fashioned industry monoliths may accuse the regulation of being one-size-fits-all.  But with the door open to innovation, the appetite from operators is there for more methane solutions. Leading oil and gas companies are already partnering with innovators to take advantage of this opportunity.

The day will come soon when anyone who sees only one path forward will have chosen to work with blinders on. That choice will cost them, as companies embracing innovation speed past them with efficient, low-cost made-in-America solutions.

This blog originally appeared on EDF+Business.

By Ilissa Ocko

By Ilissa Ocko and Steven Hamburg

A new study published in Nature Climate Change has caused some misunderstanding about the role short-lived climate pollutants like methane play in climate action, with some going as far as to argue that people are placing too much emphasis on methane. In fact, the analysis does far less to disrupt current thinking than these observers have suggested.

The study led by Myles Allen of the University of Oxford with five colleagues from around the globe is entirely consistent with the substantive scientific view that our best chance to limit warming and reduce its damages is to aggressively reduce emissions of both long-lived (i.e. carbon dioxide) and short-lived (i.e. methane) climate pollutants simultaneously, in order to reduce both the magnitude and the rate of warming.

The study focuses only on the first of these two metrics of climate change, the long term magnitude,  based on the authors’ stated assumption that the primary goal of climate policy is to limit “peak” warming (consistent with the Paris Agreement to keep global average temperature change well below 2ºC). Because carbon dioxide determines peak warming, the study is an important reminder that stabilizing climate requires progressive reductions of CO2 and other long-lived climate pollutants.

Unfortunately, some have interpreted the study to mean we should reduce focus on short-lived climate pollutants. However, the authors explicitly say that this is not the case. Indeed, they make clear the point is to articulate the roles of both short- and long-lived climate pollutants in limiting peak warming, such that countries are provided clarity when crafting strategies to satisfy their Paris commitments.

AND not OR

Short-lived climate pollutants (SLCPs) and long-lived climate pollutants (LLCPs) impact the climate in fundamentally different ways.

For example, the most prominent SLCP, methane, is 84 times more powerful at absorbing heat than the most prominent LLCP, carbon dioxide over the twenty years after they are emitted. However, methane only lasts in the atmosphere for around a decade, whereas a large fraction of carbon dioxide can last virtually forever. Therefore, methane strongly influences warming over a relatively short period before it degrades into other compounds, while CO2 accumulates in the atmosphere to commit our planet to warming for centuries.

In other words, long-lived climate pollutants dictate how warm the planet gets, while short-lived climate pollutants determine how fast the warming happens.

While reducing peak warming is critical for stabilizing climate for generations to come, reducing the rate of warming could have real benefits during our lifetimes, as long as it does not jeopardize longer term goals. For example, less destructive storms and more productive crops within the next two decades is unambiguously beneficial.

As Myles Allen noted in an email exchange, “It’s true that if we fail to control CO2 and other long-lived climate pollution over the next few decades, then today’s short-lived climate pollutants like methane will have very little impact on peak warming. But the more we reduce CO2 emissions over the coming decades, the more important methane and other short-lived emissions become in determining where we ultimately land. In that sense, methane and CO2 reductions eventually go hand-in-hand, but CO2 shows the way.”

Short-lived climate pollutants and peak warming

Adding to potential confusion, the study evaluates short-lived climate pollutants in the context of peak warming, rather than rate of warming. The authors find that reductions in SLCPs can also play a significant role in reducing peak warming, provided that we are able to sufficiently and simultaneously curb CO2 emissions within the next several decades.

Conversely, the study also suggests that if reductions in short-lived climate pollutant emissions are pursued without simultaneous and rigorous reductions in CO2 emissions, they will have a minimal impact on peak warming.

We need both, now

Because of the outsized influence short-lived climate pollutants have on the rate of warming (as well as their impacts on air quality), the study expressly affirms the value in reducing their emissions, irrespective of the impact on peak warming.

However, the study clearly reiterates that recent attention to short-lived climate pollutants should supplement, and not substitute or delay, efforts to mitigate long-lived climate pollutants.

As the authors say in their blog post:

“…the simplest option is for countries to specify, separately, how and when they propose to reduce emissions of CO2 to net zero, which is ultimately needed to stabilise the climate, as well as how they propose to control the rates of emissions of all greenhouse gases in the meantime.”

This is why we at EDF have been ardent supporters of the Clean Power Plan, stringent fuel economy standards, net-zero deforestation, and carbon markets, all of which address long-lived climate pollution. At the same time, we also advocate sustained reductions in emissions of methane and other short-lived climate pollutants to slow the rate of near-term warming.

To address the full range of adverse impacts from climate change, we need to reduce CO2 emissions AND lower emissions of non-CO2 climate pollutants.

By Ben Ratner

A massive wave of market and societal forces is changing the oil and gas industry. Low commodity prices are driving out weaker players with excessive debt, and forcing those that remain to become leaner and more efficient. As climate change effects worsen and countries move to fulfill their commitments from the Paris climate agreement, public scrutiny of oil and natural gas and their impacts only intensifies.

The question is not will industry change to meet these challenges — it’s how. It’s about what opportunities can propel industry to come back stronger out of the depths of the commodity slide, as a leaner, cleaner industry standing on firm ground that it can play a meaningful role as societies work to transition to lower-carbon economies.

While natural gas remains a fact of life, and switching from coal to natural gas has helped reduce greenhouse gas emissions, scientific research has demonstrated that potent methane emissions from the oil and gas system are undermining that climate benefit. The latest U.S. inventory shows over 9 million metric tons of oil and gas methane emissions, packing the same climate impact over a 20 year timeframe as over 200 coal-fired power plants. That’s a lot of methane no matter how you slice it.

Methane standards like the rule announced today by EPA can aid industry, for three reasons:

1. (Re)build public trust

According to the 2016 Edelman Trust Barometer survey – a gauge of public trust in the business world, spanning 33,000 people in 28 countries – the energy sector is among the least trusted sectors in the business world, ranked above only financial services and pharmaceuticals. As with any industry, trust can be rebuilt, but it’s going to take fresh effort from operators to curb emissions sector-wide, communicated in an open, consistent and verifiable way.

We know that there are some better actors in the oil and gas sector, but performance across the industry varies widely. Consumers only see the bad actors getting headlines, so when leaks or accidents occur, that’s all they have to form an opinion about how industry is performing. The EPA methane rule announced today is an important step toward leveling the playing field across the industry and setting a new status quo for responsible production.

There’s strong public support for measures like today’s rule that will bring emissions down – according to a poll conducted last fall by the American Lung Association, two-thirds of voters favor strong national limits on methane. Because EPA’s rule sets a new floor on what companies must do to contain emissions from new wells and other sources, it can inspire public confidence that operators are working to solve the problem.

2. Affordable solutions readily available, keep product in the pipes

The success of a similar rule that took effect last year – Colorado’s Regulation 7 requiring best practices for reducing methane emissions – is a clear indicator that companies are seeing benefits from identifying and fixing methane leaks, which represent lost product and revenue in addition to potent climate pollution. In a report released by the Center for Methane Emissions Solutions, eight out of ten oil and gas companies found that in the long run, their compliance costs have been low, they have broken even or they have profited from the required inspections.

Colorado’s rule is increasing workers’ attention to detail and prompting them to find 2 to 3 methane leaks per inspection, most of which can be fixed in just a few days.

Since the federal rules are in many ways comparable to what Colorado put in place, the Colorado success story is evidence that operators will be able to achieve similar benefits and comply with the national standards cost-effectively.

3. Driving innovation

Colorado is a powerful example of how well-crafted rules can create business value, and operators achieved those outcomes using today’s proven leak detection solutions. With new innovations on the horizon, the already-manageable costs of minimizing leaks will go down even further.

Collaborations like the Methane Detectors Challenge, which EDF leads with a diverse set of industry, academic and NGO partners, are catalyzing new advances in methane detection technology to cut more emissions at less cost. The new systems emerging from the Challenge and the broader marketplace will automate the leak detection process and help operators identify leaks faster, bringing down labor costs and reducing product waste and pollution even more.

Importantly, the EPA rule values the promise of technology innovation and establishes a process for the agency to permit use of emerging technology for reducing fugitive emissions at well sites and compressor stations. This encouragement sends an immediate demand signal to the marketplace to accelerate innovation of alternative emission monitoring approaches, such as continuous detection systems, which can help industry boost efficiency while delivering greater emission reductions.

A triple-win for industry

Public opinion is firmly behind taking action to curb emissions, and as we’ve seen in Colorado, operators are benefiting from minimizing how much product is lost. Today’s rule will help the sector as a whole chart a more sustainable path – one that builds more value for themselves and investors, reduces risk, and starts the process of rebuilding public trust that both business and policymakers are working to solve the oil and gas methane problem.

This post first appeared on the EDF+Business blog

By Amanda Johnson

Year two of the California legislative cycle usually yields some bold policy ideas – and this year it looks like rethinking California’s relationship with methane and natural gas is on track to do just that.

Given the fresh memories of the major methane pollution event at Aliso Canyon, the 20-plus bills introduced on the topic this legislative session – vastly more than in past years – aren’t surprising in the least. Moreover, 2016 could have a monumental effect on the methane and natural gas picture in the state for years to come.

What is responsible for this sudden increase in efforts to change California’s relationship with methane and natural gas.

The science is clear

First, the science is clear, as methane, the primary component of natural gas, is responsible for about 25% of the manmade climate change we’re experiencing today. With temperature records being broken nearly daily (2015 was the hottest year on record, and February 2016 was the hottest month ever globally), the cat is out of the bag – it’s past time to focus on methane.

The legislative pump is primed

California started down the path of finding solutions to address methane emissions years ago with a series of bills and policy actions, and in many ways the 2016 bill package doubles down on that progress.

More recent legislative efforts to understand and tackle the environmental impacts of methane include SB 1371 (Leno, 2014) requiring utilities to minimize emissions from the natural gas transmission and distribution system, and SB 605 (Lara, 2014) requiring a strategy to reduce all short-lived climate pollutants and others.

The Aliso Canyon incident broke the dam

If California wasn’t already going to act in 2016, the Aliso Canyon Storage Facility leak, one of the largest natural gas leaks ever recorded, was certainly the water that broke the dam of legislative action.

Occurring just on the outskirts of California’s largest city, and awakening people to the 400 facilities across the nation that store natural gas, Aliso Canyon directly impacted thousands of California families – Democrats and Republicans alike. The event has shed light on the state’s overreliance on natural gas as a fuel source and the continuing trend of approving more natural gas power plants without the infrastructure capable of reliably delivering it all, leading to potential blackouts in Southern California this summer.

2016 may by the biggest year yet for methane and natural gas in California

Perhaps the best way to think holistically about the 20-plus bills related to methane and natural gas that the California legislature is considering is through a two-part approach of parallel action: stopping the environmental pollution from the system California has now, while at the same time working to transition to a cleaner and more diversified system.

Cleaning up the current system

As shown by the science, vast amount of methane pollution is coming from current oil and gas infrastructure, and it’s clear that action is needed. In this vein, at least seven bills in Sacramento have risen to the top.

To chart new long term goals, SB 1383 (Lara, Los Angeles) proposes to codify the state’s methane pollution goals, including cutting oil and gas sector methane pollution by 40% below 2013 levels by the year 2030, while also making major efforts to reduce agricultural methane, black carbon, and refrigerant pollution.

For continued progress in leak reduction, SB 1441 (Leno, San Francisco) proposes to prevent California utilities from collecting money from ratepayers for natural gas they leak, either accidentally or intentionally. The bill also addresses leakage associated with the 90 percent of gas California imports, directing the state to examine where imported natural gas comes from and to develop solutions that reduce methane leakage associated with the gas California uses, but which leaks before it arrives.

In the area of energy production, AB 2729 and AB 2756 (Williams, Santa Barbara and Thurmond, Richmond) would fundamentally change the way California manages the tens of thousands of old, idled, and abandoned oil and gas wells that checker the state’s landscape. As a recent study found, leaks from idled, orphan and abandoned wells can be a significant source of potent methane emissions –in addition to posing problems for groundwater and public safety.

As a response to Aliso Canyon, a host of bills have emerged. SB 380 and SB 887 (Pavley, Agoura Hills) would prevent the Aliso Canyon storage facility from reopening until it’s been proven to be safe, and require new rules be developed for all the state’s gas storage fields. Additionally, AB 1905 (Wilk, Porter Ranch) proposes independent scientific assessments of injection and storage practices in California.

Envisioning the future of energy in California

In addition to measures to stop current pollution, the state legislature is also reconsidering the role that natural gas plays in California with a slew of bills seeking to alter California’s energy system, decarbonize natural gas, reduce the pollution burden in impacted neighborhoods, and help ensure the state reaches its clean energy and greenhouse gas reduction goals.

To reduce air pollution from new natural gas power plants, particularly in sensitive communities, AB 1937 (Gomez, Los Angeles) proposes that before authorizing new gas facilities, the California Energy Commission must assess the capacity of alternative sources to meet demand. If alternatives can do the job, the California Energy Commission will have the authority to refuse the certification of a new gas plant and favor cleaner solutions like energy efficiency and demand response. The bill will also make sure that environmental burdens already present in communities are taken into account, and broaden the existing renewable portfolio standard to direct renewable resources to those communities.

SB 1453 (Pro Tem De Leon, Los Angeles) also aims to clean up power generation by changing the ability of electrical corporations to recover capital expenditures for baseload natural gas plants – essentially moving away from natural gas generation that doesn’t meet greenhouse gas performance standards.

And in the area of making new sources of lower carbon gas, four bills seek to improve incentives and remove barriers to renewable natural gas. AB 2206 and AB 2313 (Williams, Santa Barbara) would require the study of bio-methane issues and increase incentives for renewable natural gas projects, SB 1153 (Cannella, Merced) would require an update to state climate plans to encourage development of in-state bio-methane, and SB 1043 (Allen, Los Angeles) would require new policies to significantly increase the sustainable production of renewable natural gas.

Reducing reliance on natural gas

These bills and other legislative efforts highlight the complexities presented by the state’s natural gas system.

In the wake of Aliso Canyon and increasing impacts of methane leaks on climate change, we know the status quo methane leak and gas overreliance story is not sustainable – but must be considered against the backdrop of the massive system in place. Through all this, one thing is clear, California must continue its history of leadership, and push forward to create a safer, more reliable, and cleaner energy system.

Image source: Shelly, Sketchpost

By Felice Stadler

From articles in top media, to diverse state leaders taking action, there has been a noticeable uptick in public attention on the need for methane pollution limits on the oil and gas industry over the past few months.

It’s great to see growing national and international interest being brought to an issue that was deserving of attention many years ago. But we need to move faster to rein in this problem.

Why the urgency? Here are four reasons:

1. Americans across the country are seeing the impact of an uncontrolled oil and gas industry on their air quality.

When oil and gas operators intentionally vent methane or leak it from faulty equipment or poor practices, they are simultaneously releasing harmful smog-forming pollutants than exacerbate asthma and other respiratory problems, and toxic, cancer-causing pollutants like benzene.

And let’s face it: clean air protections have not kept pace with the explosive expansion of oil and gas drilling in the U.S. over the past decade.

This was brought home once again last week when the American Lung Association (ALA) released their annual State of the Air report. Over 40 counties with significant oil and gas operations in Pennsylvania, Ohio, Colorado, and other energy producing states received a ‘D’ or ‘F’ grade for high-smog days. What’s more, over two dozen counties got a worse grade this year than last year, moving backward at a time when industry claims to be making progress.

If my child’s grades got worse from one year to the next and I did nothing, I’d be an irresponsible steward. The same applies to the federal government, whose job it is to provide clean air protections to all communities. There’s no excuse to delay action on a problem that’s cost-effective to solve.

ALA’s 2016 report coincides with the newly released National Climate Assessment which predicts that a warming climate will further exacerbate air quality and health impacts of smog pollution.

1. Methane emissions are vastly higher than we thought

EPA’s recently released 2014 greenhouse gas inventory found that we have been significantly underestimating oil and gas methane emissions. The updated inventory estimates that oil and gas operations release 9.8 million metric tons of methane pollution every year — 34% more than previously estimated. These emissions have the same short-term climate impact as over 200 coal-fired power plants, or driving over two-thirds of all of the cars in the U.S. for a year.

With every year of delay we continue to release an astounding amount of methane pollution and these numbers show this problem is much too large to ignore.

1. Climate and clean air protections must keep pace with the oil and gas industry

EPA soon will release final rules that will set methane pollution limits for new or modified (i.e., expanded or rebuilt) oil and gas operations. While these rules are critical, the end result is that the majority of industry operations will remain unregulated.

According to a recent Energy Information Agency analysis, a staggering amount of energy production came online over the last five years: 48% of oil production in 2015 came from wells drilled within the previous two years.

While a new well doesn’t guarantee methane emissions, a new study reinforces that methane leaks, especially ‘super-emitters’ — disproportionately large, unpredictable emissions – can happen anytime, anywhere, from both new and old oil and gas equipment.

Not surprisingly, nearly four dozen counties that received poor or failing grades (C, D, or F) from the American Lung Association are also home to these new oil and gas wells. Proper oversight and environmental standards have just not kept pace with the nation’s expanding energy infrastructure.

1. Methane pollution is contributing to an ever-unstable climate.

Every day there is more sobering news about the changes scientists are observing due to a warming climate.

As the evidence mounts, it’s clear we are reaching a tipping point: coral bleaching in the Great Barrier Reef; polar bears experiencing increasing stresses as sea ice vanishes; coastal communities facing recurring flooding, and insect borne diseases threatening our families and even our pets.

All of these data points demonstrate we don’t have the luxury of time, especially not with delaying action on potent pollutants like methane that are responsible for 25% of the warming that we’re experiencing today.

The oil and gas boom that this country has enjoyed comes with big environmental consequences. It’s time to fix this problem.

By Tim O'Connor

Aliso Canyon was a big methane release, especially in Los Angeles, but in the grand scheme of methane released every day by the nation’s oil and gas industry, it was a blip. And recent footage from Texas, coupled with a new study of over 8,000 oil and gas wells gives a glimpse at the kind of leaks that are happening outside of California’s borders – leaks that have huge implications for the state.

The Texas infrared footage shows a cloud of methane leaking from a pump jack in an oil field in Texas’ Permian Basin. While these smaller leaks may not be as egregious as the one at Aliso Canyon, they often go undetected and unaddressed, adding up to a large amount of pollution. And as these leaks happen in Texas – with little plans to stop them – the climate footprint of the gas supply system continues to increase.

So what does this have to do with California? California imports nearly 90 percent of its natural gas from regions across western North America, with a large portion coming from Texas production areas like the Permian and Anadarko basins. To put it another way: when it comes to the climate, what happens in Texas doesn’t stay in Texas. So even while progress is happening to cut oil and gas pollution in the Golden State, there is still a lot of work to be done to make sure imported gas isn’t responsible for significant climate damage before it gets here.

Texas-sized methane problem

To put this problem into perspective, Texas releases nearly 10 times the methane emissions that leaked from Aliso Canyon into the air, every year. And as the nation’s leading methane polluter, Texas contributes about a third of the country’s total methane emissions. That’s a huge amount of climate damage, because methane is 84 times as powerful as carbon dioxide in the first 20 years after it is emitted.

Taking into account new scientific research, those emissions are likely even higher. The latest data from the U.S. Environmental Protection Agency estimates that, nationwide, industry’s methane emissions are 34 percent higher than previously thought. It’s an issue that’s of particular concern in Texas, where a recent study found methane levels in the state’s Barnett Shale may be up to 90 percent higher than earlier EPA estimates.

While California and other leading gas producing states like Colorado and Pennsylvania are making progress to address methane pollution, there’s no such effort happening in Texas. Methane pollution is also a wasted energy problem. Because natural gas essentially is methane, pumping it or burning it into the air is no different than throwing money away.

California’s legal duty

As we wrote (here), California’s Global Warming Law, AB 32, includes the responsibility to reduce methane emissions from the natural gas it uses, even if those emissions occur outside of state lines. AB 32 requires the state board to minimize leakage of greenhouse gases to achieve climate pollution goals, and under the law, the very definition of leakage is “a reduction in emissions of greenhouse gases within the state that is offset by an increase in emissions of greenhouse gases outside the state.”

Over the last several decades, California has benefited from the use of natural gas for power generation and more recently, as a transportation fuel. However, recent analyses have shown that leakage of methane within the natural gas value chain can seriously undermine the climate benefit of using natural gas. So, while natural gas may be cutting in-state emissions, methane leaks from pipes and equipment that produce and transport gas into California from other states can nearly cancel out that benefit.

In addition to AB 32 requirements, other regulations (the Natural Gas Act – AB 1257) specifically address the need to reduce all methane emissions from the oil and gas sector, requiring the California Air Resources Board (CARB) to keep natural gas a low-emission resource and consider its role in meeting greenhouse gas targets. The law specifically requires CARB to evaluate environmental impacts of emissions reduction strategies using science-based analysis. Following on, AB 1496 (Thurmond) from 2015, requires CARB to develop the climate footprint analysis necessary to understand the role of imported gas in undermining the state’s climate progress.

State and federal efforts

California is on a good path toward addressing its own methane pollution problems, recently introducing some of the most stringent standards in the nation for methane emissions from oil and gas production, and also issuing emergency rules for natural gas storage in the wake of the Aliso Canyon disaster. But if California is to truly address the climate damage that comes from its natural gas use, it has to play an active role in efforts by other states and the federal government.

For example, by working with the Western Governors’ Association, California can work with states like Colorado to ensure others across the Western United States implement state-level rules to reduce methane during production, and cut down on methane pollution created along the supply chain that provides much of California’s fuel.

At the federal level, California can take a leading role by helping support robust regulations on oil and gas development currently being considered by the U.S. Environmental Protection Agency and Bureau of Land Management, and actively support stronger pipeline standards and economic incentives at the Pipeline and Hazardous Materials Safety Administration and the Federal Energy Regulatory Commission to address methane emissions from interstate pipelines.

And at home, California can look to efforts like the recently released strategy to reduce Short Lived Climate Pollutants that identifies the need to develop solutions to imported natural gas leakage, and SB 1441 that is currently working its way through the state legislature. These efforts recognize there are things California can do to push market signals for leakage reduction upstream – thereby reducing emissions in places like Texas without taking money out of Californians’ wallets.

California is taking a stand against methane pollution, but when top producers like Texas don’t, the only answer is strong federal rules, innovative state solutions, and regional cooperation that ensure all oil and gas producers take steps to cut their emissions.

By Jon Goldstein

Over the past few months, hundreds of thousands of people across the U.S. have spoken out in support of action on one very important topic: methane.

Methane is the main ingredient of natural gas.  It helps heat our homes and power our economy.  But when leaked or vented into the atmosphere, methane is also a potent greenhouse gas, more than 80 times more powerful than carbon dioxide over a 20 year timeframe.

The oil and gas industry is the nation’s largest source of methane emissions, but new action from the Bureau of Land Management could help change that dynamic out West.

The majority of oil and gas production on federal and tribal lands occurs in the western U.S. Unfortunately, the companies that extract the oil and gas that belongs to the American people are allowing way too much methane to escape to the atmosphere. One recent report found that taxpayers may lose more than $800 million in revenue over the next decade due to venting and flaring on public lands if no action is taken. This is a critical reason for why the BLM recently issued a new proposal designed to stop industry’s wasteful methane habits on federal and tribal lands. And why thousands of impacted community members have voiced their support for BLM’s proposal.

Over the past three months, 200,000 stakeholders, across the West and nationwide, filed public comments in support of BLM’s action on methane – likely a record number of supportive comments for an agency that usually only draws regional attention.  What’s remarkable about this public turnout is not only the sheer number of supporters, but the diversity of voices represented. BLM heard from grassroots advocacy groups and impacted communities all the way to state elected officials and the high tech companies that create tools to find and fix methane leaks.  A diverse group but with a unified message: They all see the benefit of reducing methane waste.

In New Mexico and Colorado, where the BLM held hearings on the methane waste proposal, nearly 30,000 citizens, more than 60 local officials and diverse groups from tribal advocates Diné CARE to the American Lung Association, all took action in support of strong new rules

Many of the communities located in oil and gas country are all too familiar with the risks oil and gas development can pose to public health and the environment.  But for many, the oil and gas industry is an important contributor to local economies. Fortunately, independent observers have found that the methane reduction strategies proposed by BLM are very cost-effective to implement. ICF International found that methane reductions would cost only a little more than one penny per thousand cubic feet of gas produced.

And the BLM’s analysis indicates that requiring operators to regularly check equipment for methane leaks will only impact the bottom line of small operators by less than one tenth of one percent. In a recent survey in Colorado (a state that has been operating under methane rules for over two years now), oil and gas producers reported  that measures to reduce methane pollution and waste are very cost effective.

This is why so many in the West are rallying around BLM’s sensible, cost effective efforts to cut methane – smart policies that protect taxpayers, communities and the air we breathe.

Photo credit: Earthworks

By Andrew Williams

The administration of Ohio Governor John Kasich announced today that the Ohio Environmental Protection Agency (OEPA) is taking another important step to reduce harmful air pollution from natural gas operations.

This isn’t the first time the Kasich administration has moved to address air pollution from the oil and gas industry. In 2014 Ohio joined Colorado and Wyoming in requiring operators to conduct quarterly inspections at well sites to find and fix emissions from leaking equipment. Today’s action extends these requirements upstream, and – notably — proposes to regulate both VOCs and methane, a move that helps cement Ohio’s position as one of the leading states on this issue.

Comprehensive methane rules are also under development in Pennsylvania (the nation’s second largest gas producer) and California (the nation’s third largest oil producer). Under both Republican and Democratic leadership, each of these states has recognized the benefits of keeping harmful emissions out of the air and valuable product in the pipeline. At the same time, they’re proving that these policies are highly cost-effective to implement.

Sensible Standards for a Major Pollution Source

Under the new policy, Ohio plans to issue permits for new and modified equipment at compressor stations – facilities that pressurize gas to more efficiently move it through pipelines, and which are a big source of harmful emissions. The new permits will require natural gas companies to check the facilities for leaks on a quarterly basis, using infrared cameras or handheld analyzers, and quickly fix the leaks they find.

Nationwide, the industry’s gathering sector – the part of the supply chain that includes compressor stations – emits as much as 1.7 million metric tons of methane pollution, 120 percent more than previous calculations, according to the latest draft inventory published last month by the U.S. Environmental Protection Agency.

Cost-Effective, Made-in-Ohio Solutions

By addressing these emissions, Ohio can help protect health and the environment in Ohio communities at extremely modest cost. According to a study by ICF International, emissions can be cut 40 percent at an average cost of about 1.3 cents per thousand cubic feet of natural gas sold – even when accounting for today’s relatively low natural gas prices.

Methane leaks are a needless waste of a valuable asset. In 2014, Ohio’s natural gas producers reported wasting more than 13,000 metric tons of methane, enough natural gas to heat nearly 8,500 Ohio homes. This number is likely an underestimate because only large oil and gas operators are required to report emissions, but facilities belonging to smaller operators can leak as well.

Likewise, inventories undercount emissions by failing to take into account so-called “super emitters,” leaking sources that are responsible for a disproportionate share of emissions. Leak detection and repair policies of the sort being proposed today are critical to addressing the super-emitter problem.

There are many proven, highly cost-effective technologies already at work that can cut methane pollution in half over the next few years, many of them developed in Ohio. At least a dozen home-grown Ohio companies specialize in technologies and services for reducing emissions and are helping power the local economy by providing highly skilled, good-paying jobs.

Monitoring Systems for Leaks is Key

Routine monitoring of oil and gas equipment is critical to reducing industry’s methane emissions. Throughout the supply chain, study after study has shown that emissions tend to occur as a result of unpredictable, sometimes intermittent failures and other mishaps, making regular inspection and repair efforts critical to reducing pollution.

Volatile organic compounds contribute to smog and local health problems. Methane is an extremely potent greenhouse gas, with over 80 times the warming power of carbon dioxide over a 20-year timeframe. Both are a widespread challenge at facilities involved in the production and transport of oil and gas.

By Tim O'Connor

The leak in Southern California Gas Company’s Aliso Canyon Facility released a massive amount of methane – a powerful climate change pollutant. Like other catastrophes, now that the pollution release is stemmed, the focus shifts towards cleanup and mitigation (as well as establishing causation, preventing recurrence, and pursuing legal actions).

Last week California took a major step on the cleanup front with the release of the final Aliso Canyon mitigation plan, a plan to cut pollution equal to about 100,000 metric tons of methane. Its aims to achieve these reductions by focusing on the agriculture and waste sectors, increasing energy efficiency and decreasing use of fossil fuels, and reducing methane “hot spots.”

While the portfolio of strategies laid out within the finalized plan is strong, this is only the beginning of a lengthy process, and one in which pushback from SoCalGas is already palatable. As the critical details of the mitigation plan are put into action, adherence to core principles is necessary to ensure mitigation from the Aliso Canyon disaster is a success story for the climate and people of California.

A targeted cleanup takes a targeted focus on methane

Methane is a fast-acting greenhouse gas that is 84 times more potent than carbon dioxide over a twenty year timespan – a pollutant that is responsible for nearly 25 percent of global warming felt today. Due to this near term warming impact, neither California nor the rest of the world can afford to wait to deploy real solutions that cut methane pollution and seek to stem the worst effects of climate change. These methane reduction solutions must occur in addition to efforts to cut carbon dioxide.

By following the science that shows California needs to pursue deep methane reductions, the state should flat out reject efforts like that of SoCalGas to cut its mitigation obligation by 70 percent. This is something the utility tried to argue in a recent letter to the California Air Resources Board (CARB) in March, recommending the agency use the lowest possible value for determining the climate impact of methane, instead of the agency’s accepted metric, which is backed by the latest science. SoCalGas also encouraged CARB to trade reductions between methane and carbon dioxide, even though doing so has been soundly rejected by most observers to the process.

Reducing the region’s dependence on natural gas and associated storage facilities

A multi-agency state analysis on the gas system impacts of the prolonged Aliso Canyon facility closure exposes a real vulnerability in the Southern California power system – we are over-reliant on natural gas and gas storage provided by a single company. This is a company that is also enjoying a monopoly over regional energy supply and delivery.

With the potential for at least 14 days of electric system outages for Los Angeles this summer season, the need for increased deployment of near-term clean energy solutions has never been more important. What’s more, the value of clean energy investments that  reduce energy demand and provide timely supply are more obvious than ever before.

These solutions, including demand response, electric energy storage, energy efficiency, and time-of-use pricing, are available and already in use to some degree today. Many of them represent some of the most cost effective, fastest to deploy, lowest carbon and most diversified (read: reliable) ways to reduce peak electric and natural gas use. For example, by increasing energy efficiency, the City of Los Angeles has been able to keep energy demand relatively flat for the past two decades despite adding over one million new residents. Yet, there remains huge untapped potential in residential, commercial, and industrial operations to cut energy demand even further, increase renewables, and use energy more efficiently.

Interim planning should not undercut long-term efforts

Of course, while focus on short-term solutions is necessary, medium and longer-term fixes are also needed. Even with a focus on mandating more clean energy solutions, the system will quickly run into hidden limits that are created by wholesale gas market design – a system that continues to favor natural gas over more diversified resources.

The current Southern California energy market, for instance, is dependent on gigantic gas systems for shifting energy loads and does not sufficiently recognize the value diversified assets can bring to the market through increased reliability. To fix this, California must seek to add competition across its energy markets. By focusing on these solutions, California can cut its overall pollution burden while decreasing the need for natural gas that goes into providing electricity and other forms of energy.

In the final Aliso Canyon mitigation plan CARB has laid out a structure for project selection, management, and oversight. As this plan turns into action, CARB and other stakeholders must stick by the key principles of achieving methane reductions and delivering solutions that reduce the reliance on natural gas and gas storage, which will provide environmental and public benefits for years to come.

By EDF Blogs

By Matt Watson and David Lyon

Drive by an oil or gas well pad, and it may not look like much — a couple of storage tanks, some pipes, maybe a see-sawing pump jack. But fly over one of these facilities with an infrared camera and you might see something different: methane pollution.

We did exactly that for a new study accepted today in Environmental Science and Technology. In the largest sample size of any methane emissions study to date, we hired one of the nation’s most experienced leak detection companies to fly a helicopter over 8,000 well pads in seven regions across the country using infrared technology to capture images of methane and other pollutants. The goal was to better characterize the prevalence of “super emitters” – the large, enigmatic sources responsible for a big portion of industry’s methane pollution – so we could figure out how to stop them.

What we found was stark. Methane pollution was widespread, pouring out from these super emitter sites in every basin.  We also confirmed what other studies have shown – that super-emitting sources are nearly impossible to predict.  They can happen anywhere, anytime as a result of malfunctioning equipment that goes unattended and sloppy mistakes in the field.

The take-away is clear.  Operators need to be vigilant in monitoring for leaks.  And we need strong rules in place to ensure all operators are doing so – not just the leading companies that have implemented leak detection and repair programs voluntarily.

None of this is surprising. The study today merely confirms what previous studies have found.  A recent study of emissions in Texas Barnett shale, for example, found super emitters were contributing disproportionately to production emissions and that you couldn’t reliably predict where and when they would happen.

How We Stop an Invisible Pollutant

The study attempted to pinpoint common characteristics that can trigger one of these polluters. After several months of conducting a statistical analysis comparing sites with and without observed emissions, researchers concluded that some characteristics – like the amount of oil a site produces – exhibited a slight correlation with these mega polluters, but overall it’s nearly impossible to predict when and where one of these emissions sources might pop up. Even sites with flares, vapor recovery units and other standard emission controls in place, could fall victim to super polluters.

Rather than trying to guess where these super polluters will occur, it is clear from the study that regularly checking oil and gas facilities for leaky equipment is a more effective way to identify both high polluting sources, which this study sought to examine, as well as the other low- polluting sources, which may be individually smaller but are collectively significant and represent a substantial share of industry emissions.

Systematic checks are also affordable and effective, and you don’t need your own helicopter to do it. In Colorado, for example, operators have been inspecting oil and gas equipment for leaks – at some sites as often as once month — for more than two years, with “no complaints” from industry. The Bureau of Land Management likewise called for leak detection practices at existing sources in its draft venting and flaring rule, aimed at curtailing oil and gas methane emissions on public and tribal lands.

That’s not the only good news. Researchers found that emission control technologies do work most of the time. These cost-effective tools and practices are critical to helping industry keep gas out of the air and in the supply chain. It’s when they fail – often because of mechanical malfunctions or other design problems – that the impacts can be most severe.

Establishing Rules of the Road

Methane is a potent greenhouse gas responsible for a quarter of the climate disruption we’re experiencing today. And the U.S. oil and gas industry is estimated to be dumping more than 9 million tons of methane into the atmosphere every year.  But just as the threat is so severe, so is the opportunity.  Reducing global methane emissions by just 40 percent – something we can do cost-effectively with today’s technologies – would have the same near-term climate benefit as eliminating 1,000 coal-fired power plants.

Last month, President Obama committed to cut methane pollution from the oil and gas industry’s existing infrastructure – a pledge that will take the administration getting serious about comprehensive, rigorous methane monitoring and repair in order to find and fix the elusive super polluters that are a big part of the emissions problem.

This new study underscores the urgency of getting these standards in place. Because the sooner we find methane leaks and the sooner we stop them, the bigger dent we can make in slowing the rate of global warming. As several analyses have shown, leak detection and repair programs are a cost-effective way to control emissions – making methane reductions one of the best bargains in the energy industry for cutting greenhouse gases while eliminating energy waste. Coming off the hottest year on record, the time for action has never been more pressing.

By EDF Blogs

By Tim O’Connor and Lauren Navarro

Ongoing fallout from the catastrophic failure at the Southern California Gas Company’s Aliso Canyon storage facility is exposing a critical weakness in the state’s energy system. Overdependence on natural gas – and on one provider of that gas – means we don’t have the flexibility we need to cope if things go wrong. And now that they have gone wrong, a group of state agencies says the region could be facing power shortages this summer and winter as a result.

A new report released today by the California Energy Commission (CEC), California Public Utilities Commission (CPUC), California Independent System Operator (CAISO,) the Los Angeles Department of Water and Power (LADWP) and Southern California Gas (SoCalGas) describes the problem. While a separate report released by CEC, CPUC, CAISO and LADWP, begins to lay out the short-term response plan. (Some of the efforts already under way are documented here, here, and here).

To minimize these risks now and avoid them in the future, officials need to diversify California’s electricity portfolio, end the SoCalGas monopoly, and free up utility markets to deliver a better mix of assets – gas, renewables, distributed generation, and energy efficiency – to help keep supply and demand in balance on the grid, and make sure the system stays up and running.

A symptom of a larger problem

Sadly, this situation shouldn’t come as a surprise. We’ve come up against the limits of the supply system even before the Aliso disaster. The better news, such as it is, is that state officials have already put some good tools in place that will help utility operators keep the lights on during peak demand times this summer. But if the agencies today are right, it’s going to be a nail-biter.

Right now, Southern California depends on a single fuel, natural gas, for the bulk of the region’s electricity. And because utilities depend on quick-firing gas power plants to handle shifting loads, gas is even more essential when it comes to balancing peak demand. In fact, California has continued to approve more natural gas, locking in an even greater reliance, even though more diversified sources are available that are cheaper and less polluting.

Diversifying the energy mix for more resilience

The problem is, the utility market as its currently designed doesn’t make it easy for these other sources to compete, and the system doesn’t fully recognize – or reward – the value that diversified assets bring in terms of increased reliability. For example, fast-acting demand response – which incentivize customers to reduce their load at peak times – and electric energy storage don’t receive unbundled payments associated with the added resilience and other advantages they offer.

Maintaining a stable and reliable electricity system will require short-term actions by regulators and utilities, including:

• Deploying demand response, an energy conservation tool that empowers people to shift their energy use to times of day when there is less demand on the power grid or when renewable energy is more abundant. Demand response programs like California’s successful Flex Alert program should be maximized for increased grid reliability.

• Time-of-use electricity (TOU) pricing rewards people who shift some of their energy use to times of the day when renewable energy is plentiful and electricity is cheaper. Time-of-use rates better reflect the true cost of electricity, which fluctuates throughout the day, and empowers people to take control of their energy use and costs. The state is well on its way to automatically transition all residential customers to TOU in 2018. In the meantime, utilities need to better educate consumers so they take full advantage of the benefits.
• Energy Efficiency is one of the most cost-effective and fastest ways to reduce peak energy and gas use. Over the last two decades, Los Angeles has made huge strides, keeping energy demand relatively flat, despite adding over a million new residents. Last year, California committed to doubling savings from efficiency programs and upgrades as part of the SB 350, building on its successful history of promoting energy efficiency measures that have saved consumers billions of dollars and helped reduce electricity demand by more than 15,500 megawatts – equivalent to the output from more than 30 large power plants.
• More renewable energy like wind and solar power, as required by SB 350, will diversify California’s energy portfolio. Combined with tools to reduce peak energy demand, these abundant energy resources will build a cleaner, more resilient energy system.

• Developing a reliability “safety net” by connecting California’s electricity market with other western states allows the state to bring more reliability to the system with more wind and solar both at home and across the West.

Moving forward, however, these solutions alone aren’t nearly enough. Over the next few years, we need to create more competition among energy sources, and give consumers more and better access to energy choices. Measures like these will spur more alternatives that improve reliability, reduce pollution, and meet electricity demand at lower cost.

The bottom line is, our best guard against risk is a diversified portfolio of energy options, and we shouldn’t sell ourselves short. The potential for clean energy solutions in California can transform the state’s power system, and we can, and should, leverage our abundant clean renewable resources to make reliability issues a thing of the past.

By Tim O'Connor

The epic Aliso Canyon gas leak is the poster child for what happens when dilapidated oil and gas infrastructure converges with weak regulations and lax oversight. But, notwithstanding pressure from the Southern California Gas Company and a set of competing considerations such as the need to address energy system reliability and perform localized impact response, Aliso Canyon also has the potential to become a shining example for how to deal with the aftermath of a major climate disaster – one that put an extra 100,000 metric tons of methane pollution in the atmosphere.

On April 1, California took a big step on the road to recovery with the release of its climate impacts mitigation program (prior plans were only drafts for public comment). Now, with a final plan in hand, the California Air Resources Board (ARB) has set the stage for solutions that both reduce climate pollution now and into the future.

High stakes for communities, the climate and the state                                                                    

Mitigation plans are typical after an environmental disaster. From single day episodes stemming from negligence, multi-day criminal acts, and everything in between, it’s a standard part of a pollution response effort.

In California even, massive mitigation and investment plans have been at the heart of some of the state’s most visible catastrophes, from oil spills, to energy trading fraud, and port air pollution. And while prior pollution events have hurt families, devastated ecosystems, and imperiled the economy, something about the Aliso Canyon event and associated mitigation plan feels different. Perhaps it’s the fact that California has been working to reduce methane leaks from the state’s oil and gas industry for several years, and this leak undermines much of that progress. Consider also that this leak happened in the Los Angeles metro area, an area trying to lead in the effort to combat climate change – and whose own Mayor started and leads the Mayor’s National Climate Action Agenda.

One thing is for sure, regardless of whether Aliso is special, just like other mitigation plans – California has to get the mitigation right.

Best available science underpins strategy

It’s hard to address climate pollution without a focus on science. This is especially true for how we deal with methane, a supercharged pollutant that is responsible for nearly 25% of today’s warming. Over the first twenty years methane sits in the atmosphere, it is 84x more powerful than carbon dioxide in speeding up the rate of warming.

This means the short-term climate impact of the Aliso Canyon leak is the same as burning 900 million gallons of gasoline.

Fortunately though, the strategies ARB laid out in its mitigation plan reflect the latest science, providing a strong basis for California to achieve the scale of greenhouse gas reductions needed to make up for the damage the leak caused. Meanwhile, SoCalGas, in its comments on the plan, decided to try and buy itself a massive 70% discount arguing for a lower metric to size the scale of climate damage it caused.

Full mitigation is a top priority

In Governor Brown’s state of emergency order responding to the leak, he directed ARB to develop a program that would “fully mitigate the methane emissions from the leak.”  As we wrote to ARB in February, achieving full mitigation requires a plan based on several important elements, including accurately quantifying the total volume of leaked methane and ensuring only reductions that are truly additional to activities SoCalGas or other parties were already planning (or required to undertake) are eligible to count toward the mitigation.

The commitment to full mitigation in the plan remains paramount, with oversight and management provisions included. In fact, not only does ARB seek reductions that will achieve or surpass the amount of pollution put into the air, the plan explicitly prohibits SoCalGas from accruing any benefit from investments made under it.

Outcomes dependent on program efficacy

Individual climate pollution reduction projects laid out in the plan will be selected based on a series of criteria, likely reviewed and managed with the help of a third-party administrator, and falling within one of three general project categories, including:

• Reduction of methane emissions within the agriculture and waste sectors;
• Increase of energy efficiency and decreasing reliance on fossil fuels; and
• Reduction of methane “hot spots” not presently targeted under federal, state, or local laws.

And while project selection criteria and investment project types are a critical part of the overall package – the plan also keeps an intense focus on the need to cut methane pollution, the importance of achieving full mitigation through sound science, and the value of cutting oil and gas reductions.

Ripe reductions in the oil and gas system

The well failure at Aliso Canyon is but one example (albeit an extreme one) of the problems that occur daily at sources throughout the oil and gas sector. By including an emphasis on oil and gas sector reductions, through the focus on hot spots and abandoned infrastructure, the state’s response can help transform an industry where inadequate field performance has too often been the norm.

California needs a continued focus on infrastructure – not just in this plan, but far beyond- and the Aliso plan is strong step forward. The key focus now should be to implement it without delay to ensure the plan delivers on its promise. While these actions won’t erase the damage done, full and timely mitigation will help pave the way for a cleaner and more secure energy future.

By Simi George

Last month, the U.S. Senate unanimously passed the SAFE PIPES Act, reauthorizing the Pipelines and Hazardous Materials Safety Administration (PHMSA). Tucked inside the bipartisan bill are important new measures intended to advance the ways in which regulators facilitate the repair and replacement of old, increasingly leaky pipeline systems.

The bill also creates a multi-agency task force looking into the health, safety, environmental and economic impacts of the four-month disaster at the 70-year-old Aliso Canyon natural gas storage facility – and what should be done to prevent another one like it.

Aging pipeline systems are a huge challenge. Besides safety concerns, the cost of lost gas is a needless burden on ratepayers. And regulators are also growing increasingly concerned about the climate impact of leaking methane, the main ingredient in natural gas.

Taking Stock

The Senate bill offers a significant opportunity to evaluate the effectiveness of various aspects of the existing regulatory scheme in limiting gas pipeline leaks.

For example, it requires the U.S. Comptroller General to review state policies on repair and replacement of leaking natural gas pipelines, and report back to PHMSA and Congress on key findings. The report will also recommend policies and practices to improve safety by accelerating pipeline repair and replacement while taking into account potential ratepayer impacts. Provided the PHMSA Administrator finds that the recommendations will significantly improve pipeline safety, the agency is required to issue regulations implementing them nationally.

Utilities across the country are looking to replace thousands of miles of leak prone distribution pipes over the coming decades in order to limit pipeline leaks. Nationally, replacement costs are estimated at $270 billion. The massive financial implications underscore the need to thoughtfully design and execute pipe replacement programs.

States are working to enhance the safety of local utility distribution systems through policies aimed at accelerating pipe replacement. For instance, most have created accelerated mechanisms for utilities to recover costs associated with these investments, providing greater financial certainty and additional incentive for utilities. As of 2015, 39 states had such mechanisms in place.

But until now, a comprehensive effort to examine how well these policies are working has been lacking. The SAFE PIPES Act contains provisions allowing for their review and highlighting the need to evaluate all opportunities to advance pipeline safety.
Broadening the Mandate

But there’s a larger issue here. The current regulatory framework governing pipe repair and replacement is solely safety focused. While utilities are required to fix hazardous leaks immediately, there is generally no requirement to repair non-hazardous leaks within a specific timeframe.

Leaks deemed non-hazardous – by dint of size, location or proximity to people – often continue unabated for years, sometimes for decades, not only causing environmental harm, but doing so at the expense of ratepayers. But lately, regulators, and utilities themselves have been looking at broadening the set of criteria they use to prioritize pipe repair and replacement to include environmental and ratepayer considerations.

That’s because methane, the primary constituent of natural gas, is a potent global warmer, 84 times as powerful as CO2 over a 20 year timeframe. As of 2012, the distribution pipeline system accounted for 20% of methane emissions from the natural gas sector, 30% of which is attributable to leak-prone cast iron and unprotected steel pipes.

And of course it is ratepayers who pay the costs of leaked gas. A 2013 report estimated that ratepayers in Massachusetts alone paid between $640 million to $1.5 billion from 2000-2011 for lost and unaccounted gas.

Safety First, but Other Factors are Important

Public safety must come first when it comes to oversight and management of the nation’s pipelines. But our leaking pipes pose other risks that must also factor in. Pipeline replacement and repair programs, which implicate ratepayer and environmental interests, must be conceptualized, assessed and implemented, recognizing that leaking gas pipelines are a multi-dimensional problem.

In proposing a multi-agency initiative to consider the public safety, health, environmental and economic implications of the Aliso Canyon leak, the SAFE PIPES Act acknowledges that this is a problem of unusual complexity. And by requiring that ratepayer impacts be considered in assessing recommendations to improve pipeline safety, the bill makes an important step towards recognizing that the extensive leaks on our pipeline system are a similarly complex problem going beyond public safety.

The SAFE PIPES Act is, by any measure, a much needed legislative effort. In creating opportunities to advance the existing pipeline safety regulatory framework, it moves the ball forward in important ways. Now it’s up to the House to complete the play.