The U.S. Oil and Gas Industry Has a Methane Problem

Oil Flare Stack
(Image Source: Bloomberg Createive/ Getty Images)

By: Felicity Bradstock

New studies show that several oil and gas firms in the U.S. have been underreporting methane leaks in their operations in the Permian Basin. As Biden pushes his ‘Build Back Better’ framework – aimed at combatting climate change, and his Bipartisan Infrastructure Law – aimed at improving aging infrastructure, this latest report reveals significant weaknesses in the U.S. energy sector.

There is no secret that America’s aging and inadequate energy infrastructure is a huge weakness for the sector. Just last year, there were huge energy provision failures in the face of a severe Texas storm. And in California, residents must deal with grid failures annually, as temperatures soar. But the need to fix widespread energy infrastructure failings may be even more urgent than originally thought, as inefficiencies in private oil operations have led to severe methane leaks, which could hinder the government’s aim to reduce greenhouse gas emissions.

The U.S. and international partners are aiming to reduce global methane emissions by at least 30 percent by 2030. However, America’s ongoing reliance on fossil fuels and inefficiencies in infrastructure are making this task seem monumental. A report released this month shows that the methane emissions in the Permian Basin from big oil and gas firm operations “are likely significantly higher than official data” reported to the Environmental Protection Agency.

The new report suggests “A very significant proportion of methane emissions appear to be caused by a small number of super-emitting leaks.” The writer of the report, Science Committee Chairwoman Rep. Eddie Bernice Johnson, stated that the U.S. will likely fail to meet its methane emissions reduction goals without a “swift and large-scale decline in oil and gas sector methane leaks.”

In 2021, Biden announced a wide array of policies aimed at cutting methane emissions from fossil fuel operations. The Environmental Protection Agency (EPA) also proposed rules to establish better standards for old wells, which would require oil and gas firms to carry out more regular and rigorous leak monitoring, as well as making firms introduce carbon capture technologies into their oil operations. But the report highlights that out of the ten companies reviewed, nine had no internal definition of a ‘super-emitting leak’. Two of the operators believe that existing technologies cannot provide an accurate assessment of the leaks.

The operators in question are Chevron, ExxonMobil, Admiral Permian Resources Operating, Ameredev II, ConocoPhillips, Coterra Energy, Devon Energy, Mewbourne Oil, Occidental Petroleum and Pioneer Natural Resources. A spokesperson from the lobbying group American Petroleum Institute defended the companies’ monitoring mechanisms, stating “This industry is committed to tackling the challenge of emissions reductions head-on while continuing to deliver affordable, reliable energy. We support accuracy and transparency in reporting GHG emissions and are continuously improving emissions reporting, including the accelerated deployment of cost-effective direct measurement options.”

However, the report revealed that, in 2020, a super-emitting leak from one of the firms was equivalent to over 80 percent of the methane emissions the company had reported to the EPA from its Permian Basin oil and gas operations that year. This means that the severity of leaks is likely underreported.

Beyond the report, 21 oil wells were recently found to be leaking methane in California. Many of the wells are apparently leaking 50,000 parts per million of methane or more – an amount at which the colorless, odorless gas can explode if ignited. California Geologic Energy Management Division (CalGEM) has now temporarily plugged several of the leaks.

California’s top oil regulator, Uduak-Joe Ntuk, has since been accused of lying about the severity of the leaks near Bakersfield. The regulator told the public that the leaks were small and not a concern, which has since been found to be false.

California has, this month, vowed to invest $300 million in the plugging of methane leaks in response to a government push to reduce emissions. Two-thirds of the funds will contribute to plugging idle and leaking wells, while the other third will be spent on methane-detecting satellites – to track global methane leaks from fossil fuel operations, landfills, and agriculture.

The announcement comes following California’s pledge to cut methane emissions by 40 percent by the end of the decade. Methane is much more harmful to the atmosphere than carbon dioxide – around 84 times more in its first two decades – although it stays in the atmosphere for less time.

While California is responding to government calls to reduce methane emissions across its oil and gas operations, its regulators may be understanding the severity of some of the major leaks in the state. In addition, the recent report on super-emitting leaks suggests that major oil and gas companies are likely underreporting their methane emissions, hindering the U.S. aim to greatly reducing its greenhouse gas emissions by 2030.

Source: Oil Price

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