Methane capture rules are good for business
Thursday, November 12, 2015
Before the state’s Air Quality Control Commission passed a new rule in 2014 aimed at reducing methane leaks associated with oil and gas production, several companies doing business in Colorado had already voluntarily implemented their own pollution-control methods.
That’s because capturing methane does two things: It reduces greenhouse gas emissions and volatile organic compounds in the atmosphere, which is good PR for energy producers, but it also keeps a valuable commodity from vanishing into thin air.
So why did the state feel pressure to regulate something that market forces were already pushing companies to do? Because methane capture is an expensive proposition. Initial estimates were $45 million in compliance statewide. Such investment is easier for large-scale producers than their smaller counterparts.
Fortunately, the market has responded to this new wrinkle. There are now nine companies that target emissions in Colorado, eliminating the need for smaller producers to buy expensive leak-detection equipment. The new rule has provided new opportunities for infrared-camera makers and manufacturers who supply valves, seals, flanges and igniters to the industry. Innovation is making compliance costs easier for small energy developers to absorb.
Jim Armstrong, president of Apogee Scientific in Englewood, told The Sentinel’s editorial board Tuesday that his firm is one of many developing cutting-edge technology to help producers keep gas in the pipeline. Apogee’s Leak Detection System — a non-camera method of finding leaks and measuring concentrations of methane, total hydrocarbons and carbon dioxide — is used all over the country, but wasn’t approved for use under Colorado’s new rules.
Because methane emissions rules are expected to be adopted across the country — including by the EPA and the BLM at the national level — a trade group has formed to lobby for sensible regulation, free-market innovation and best practices.
“We felt that if new regulations were going to be drafted, they should reflect the reality of the situation,” said Patrick Von Bargen, the executive director of the Center for Methane Emissions Solutions. “There’s no doubt Colorado is a leader in this realm and will inform the rest of the country. It seems to be working pretty well here.”
Von Bargen estimated the industry loses about $1.2 billion worth of gas, even at today’s low prices. Capturing gas by eliminating leaks saves companies money, increases revenues in state severance taxes, creates good-paying jobs and helps the environment.
Colorado is making a case that mitigating methane pollution is not only the right thing to do, but has economic benefits for multiple stakeholders.