New Analysis Finds More Than $48 Million In Annual Natural Gas Waste And Pollution In Utah
Report from Synapse Energy Economics underscores the importance of forthcoming methane requirements to ensure efficient use of taxpayer resources.
(October 13, 2023, Salt Lake City, UT.) A new Synapse Energy Economics analysis commissioned by Environmental Defense Fund and Taxpayers for Common Sense finds oil and gas companies across Utah waste $48 million-worth of natural gas per year. That’s enough lost gas to meet the annual needs of more than a fifth of the state’s residential gas customers, and accounts for $6.7 million in lost potential tax revenue for federal, state and tribal governments per year.
This waste occurs when natural gas is either leaked, flared or vented from oil and gas infrastructure. The U.S. EPA is set to finalize a proposed rule to address methane pollution this fall. National rules provide significant upside for states like Utah, where wasted taxpayer resources could be saved with stronger guidelines for oil and gas operators.
"When oil and gas operators waste natural gas through leaks, venting and flaring, Utah communities suffer.” said Nini Gu, EDF Regulatory & Legislative Manager, West. “If that gas was captured instead of wasted, it would generate nearly $6.7 million in revenue for federal, state, local and tribal governments, and be available for important public services, including education; that’s why the EPA’s forthcoming methane rule is so incredibly important.”
Methane is a potent greenhouse gas with more than 80 times the warming power of carbon dioxide in the short term and responsible for more than 25% of the warming we are experiencing today.
“Methane waste and pollution is bad for our air and climate, bad for Utah’s economy and bad for taxpayers.” said Ashley Miller, Executive Director of Breathe Utah. “That’s why Breathe Utah supports the EPA’s efforts to improve protections for all Utahns by eliminating waste and pollution from leaks, venting, and flaring.”
According to the analysis, the 16 billion cubic feet of methane wasted from Utah’s 12,540 active oil and gas wells in 2019 translated into nearly $6.7 million in lost tax and royalty revenue to the state of Utah - including over $1.2 million in lost revenue for the tribal governments of Utah. That funding could have supported Utah’s education system and gone to city and county governments.
“The new report proves that Utah is throwing away millions of dollars in natural gas every year. This isn't just wasteful; it's practically a gift to oil and gas companies. They're allowed to release and burn natural gas without paying a cent, even when it's not an emergency. The administration needs to put an end to this. The EPA has the power to set new rules by year-end that would cut down on waste and pollution, a win-win for taxpayers.” said Michael Surrusco, Director of Campaigns at Taxpayers for Common Sense.
This analysis highlights that leaks are the leading cause of natural gas waste in Utah, responsible for roughly 87% gas wasted. The remaining 13% of wasted gas was lost to venting and flaring.
Lost tax revenue isn’t Utah’s only problem. Other pollutants are emitted alongside methane, such as volatile organic compounds. VOCs are an important precursor to the formation of ground-level ozone, a harmful gas which can trigger asthma attacks, worsen respiratory diseases and lead to heart disease. Oil and gas operations are the primary contributor to ozone pollution in the Uinta Basin which has led to serious air quality issues in Duchesne and Uintah County, particularly during the winter. Oil and gas operations can release other toxic chemicals such as benzene, which is known to cause cancer. Efforts to cut methane waste and pollution will help to conserve a crucial energy resource in the supply chain and protect Utahans from this public health threat.
Colorado and New Mexico have already implemented comprehensive rules to minimize oil and gas pollution in their states including strong leak detection and repair rules, requiring the use of zero-bleed pneumatic devices, and the elimination of routine flaring. This creates an important and proven foundation for federal agencies to build upon in developing standards that serve the needs of Utahns.
Reducing methane waste and pollution also creates jobs in the fast-growing methane mitigation industry, which is already established across Utah manufacturing products and providing services to help operators address emissions. The methane mitigation industry provides family-sustaining jobs that typically pay 10% more than the federal average and can’t be offshored. Over 75% of methane mitigation companies say they would create more jobs with strengthened methane emission standards in place.
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Taxpayers for Common Sense is a nonpartisan budget watchdog and an independent voice for the American taxpayer since 1995. Their mission is to fight for a federal government that operates within its means and works for people, not just special interests. They focus their efforts on eliminating wasteful and harmful programs and policies, weapons systems that do not work, and the perverse incentives that increase taxpayer risks and liabilities.
Breathe Utah has experience and expertise in scientific, medical, legal, and communications aspects of air quality in Utah. They seek real and practical solutions to Utah’s air quality problem. To accomplish this they increase awareness and engagement among youth and adults, implement projects to directly improve air quality, and promote sound policies.