Cutting methane emissions via regulatory innovation

The increasing pace of technological change poses both a challenge and an opportunity

Report published April 2019

Stakeholders including investors, the public and even oil and gas companies are becoming increasingly concerned about the issue of methane emissions. Controlling these emissions, much of which leaks out of valves, pipelines and other areas along the supply chain, pose challenges for companies wanting to live up to their pledges to reduce methane’s environmental impact.

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The good news is these challenges attract entrepreneurs and innovators who see opportunity to solve problems and implement technologies. Unfortunately, while innovative methods for leak detection and repair have been more numerous in recent years, many of these new technologies have barely made it past the pilot stage. Much of this is due the current regulatory framework that cannot keep up with the fast pace of technological change.

Challenges for innovators and regulators

There are three notable regulatory challenges and solutions to creating a market for innovation.

  • Equivalence: Current methane rules prescribe steps on how to monitor emissions. They do not establish outcome-based rules such as a percentage of emission reduction. To justify the switch to newer technologies, companies need a manageable numerical target to calculate impact.
  • Transparency: Tech companies – accustomed to the rapid speed of innovation – typically deal with a slow approval process. Regulations can encourage innovation by prescribing quick and transparent processes that get new detection technologies out in the field fast.
  • Uniformity: There is a lack of a uniform regulatory framework that pertains to all states and countries. The fragmented market bogs down the process even further. While a company is working through the approval process in one state, it may have to start over from scratch in another state. By including a standard set of definitions, a local or regional opportunity can become a global one.

A pathway to alternative compliance

This paper reviews applicable rules in six states and the U.S. Environmental Protection Agency. These examples define methodologies that can be applied in a regulatory framework that facilitates collaboration and technological growth.

Opportunity to tackling these challenges

Resolving these regulatory challenges is one way for innovation to help achieve economic and environmental prosperity. Better technologies allow operators better detection, mitigation and monitoring to reduce waste. Operators can then show the public, investors and other stakeholders they are serious about protecting the environment. The oil and gas industry is increasingly realizing that getting their methane emissions under control is key to their license to operate in an ever more climate conscious world.

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