The blog originally appeared in The Hill on July 22, 2015.
By Patrick Von Bargen
America’s shale gas formations are reshaping world energy markets by rapidly putting this country on a path toward energy self-sufficiency. This is good news for American businesses that need reliable, inexpensive energy to grow and thrive.
Yet these same domestic oil and gas operations that are disrupting world markets are wasting vast amounts of methane gas worth somewhere between $1.8 and $2 billion in revenue every year. This is not only bad for business, but also hurts American energy independence since every dollar wasted is another dollar of gas we’ll have to import.
Methane is the main component of natural gas. When it leaks or is vented or flared before reaching a customer, it represents the waste of a valuable American resource. Furthermore, venting, flaring, and leaks of methane and pollutants that leak with the methane, can contribute to health problems by degrading local air quality. Fortunately, sensible, cost-effective solutions exist to solve this problem today.
Investing in methane mitigation technologies and practices, such as leak detection and repair, are low-cost ways for operators to improve efficiency and prevent product loss. A 2014 report by ICF International found that by adopting proven, available technologies and practices, companies can collectively cut methane losses by 40 percent for pennies on the dollar.
Some large companies like BP, Chevron, and ExxonMobil are participating in programs like the Environmental Protection Agency’s Natural Gas STAR program to encourage companies to adopt the cost-effective technologies and practices that improve operational efficiency and curb methane pollution. And they are reaping the benefits of deploying methane mitigation technologies by capturing and monetizing the methane that would otherwise be released into the air and wasted. But too few – only 30 out of the nation’s 6,000 oil and gas operators -- participate in this program. Clearly, we still have a long way to go to capture the $2 billion in lost gas every year.
Leading states are showing the way. Last year, Colorado became the first state in the nation to directly address oil and gas methane emissions. Their rule (which includes strong requirements such as monthly leak detection and repair inspections for the largest facilities) shows that a strong oil and gas industry and sensible methane emissions rules are natural complements. Other energy-producing states such as Wyoming and Ohio are also putting strong waste reduction and air quality requirements in place. Now both the EPA and BLM are also considering federal standards to reduce wasted gas.
Not only would more aggressive efforts to mitigate methane waste produce new revenue for the oil and gas industry, they would also foster a growing and potentially global and competitive methane mitigation industry in the U.S. In the U.S., this industry is already largely made up of small businesses with facilities in 46 states, with 72 headquartered in the U.S. It includes manufacturers, assemblers and service providers that provide at least 30 different key job types that pay a median wage of over $30 per hour. Forecasts predict dramatic growth in both domestic and global natural gas production over the next few decades, with an accompanying need for methane capture and mitigation to grow, as well. So building a robust U.S. market for methane mitigation technologies and services would position American companies to dominate this growing world marketplace, increasing exports.
We don’t have to feel like our hands are tied behind our backs while a valuable domestic energy product disappears into thin air. In fact, there’s something we can do to cut that waste right now. American-made, cost-effective solutions already exist and their adoption will cut waste and create American jobs. Keeping more methane in the pipeline and out of the atmosphere is a win-win for the domestic energy industry and the emerging methane mitigation industry.
Von Bargen is executive director of the Center for Methane Emissions Solutions, the national voice for businesses that offer innovative solutions that cut methane waste across the oil and gas supply chain.