New Methane Emissions Move May Miss the Mark

President Obama announced a new initiative Wednesday aimed at curbing methane gas emissions from natural gas drilling wells. The proposal is the latest in a string of regulations put forth by the White House aimed at combating global climate change. While the president appears to be earnest in his environmental goals, his proposed policy may not be as effective as environmentalists had hoped because it imposes restrictions on the wells least likely to contribute to carbon pollution and leaves regulation of the biggest polluters up the discretion of the fossil fuel industry.

Before delving into the policy, it’s important to understand what the White House is seeking to regulate. Methane IS natural gas. About 95-98% of natural gas is pure methane. When talking about reducing emissions, the goal is for companies that drill for natural gas to allow less of their product to escape into the environment by capturing it to sell with the rest of the natural gas extracted from the well.

A researcher calibrates a methane-monitoring equipment at a natural gas drilling site. (Source: University of Texas)

This volume of escaped methane plays a big role in greenhouse gas emissions. Though methane emissions represent only about 9% of all GhG emissions, because of the chemical makeup of the methane molecule, it traps much more heat than carbon dioxide – about 20 to 25 times more. So even though the world emits more CO2, methane actually exacerbates global temperature regulation moreso than CO2.

How much gas are we talking about? According to the Washington Post, “..oil and gas producers lose 8 million metric tons of methane a year, enough to provide power to every household in the District of Columbia, Maryland and Virginia.” The proposed regulation seeks to cut methane emissions by 40 to 45% by requiring new wells to capture escaping methane, putting more funding towards leak detection and asking for voluntary efforts to capture methane from existing wells.

Many companies acknowledge that making the process more efficient is good business sense but oppose regulation of methane emissions because it adds an unnecessary regulatory burden to an already-improving process. Or as Thomas Pyle of the American Energy Alliance put it, “It would be like issuing regulations forcing ice cream makers to spill less ice cream.”

In reality, the proposal would require them to release less methane on new wells, but emissions at old wells will continue to be at the owner’s discretion. Because about 90% of methane emissions are from existing wells, many green groups have questioned how effective the policy will be at meeting its goals.

During his time in office, the president has had to skirt a fine line with environmental regulation. Any and all environmental regulations are viewed unfavorably with conservative members of Congress, making the political climate for reform incredibly difficult. Conservative politicians and industry groups oppose these types of laws, arguing they put too much of a burden on businesses. With the oil and gas industry under strain from falling gas prices, companies have already begun announcing layoffs and shutting down oil rigs. It is not just the president’s environmental legacy at stake, but also his economic one. And though he may be reluctant to admit it, much of the recovery has been made through homegrown energy booms in natural gas drilling and shale oil in North Dakota. Though curbing methane emissions is cost effective and companies would lose less product as a result, the argument that the regulation could hurt the American economy may play a larger role politically than it does economically.

One way the president could skirt this problem is by tailoring the regulations to the biggest offenders, which need not be every well. The largest source of methane emissions nationwide, a Delaware-sized plume of methane discovered by NASA via satellite, is not caused by natural gas drilling, but through leaks in natural gas production and processing equipment in the San Juan Basin of northwestern New Mexico, much of it located on federal land. The methane escapes from coal beds and though some of it is captured, much of it is either burned off or simply released into the air. Since this represents the large emissions region in the country and it is on federal land, the president could focus on just the basin and make significant strides.

A red spot near the Four Corners region of New Mexico represents the largest methane hotspot in the country. (Source: NASA.gov)

Additionally, the president could focus on features of existing wells which are known to leak more than other components. For example, a University of Texas – Austin study found that two issues were responsible for 40% of leaks at testing sites – faulty pneumatic valves and a process of drawing drilling liquid out of an older well to extract more gas towards the end of the well’s life (called liquid unloading). In the case of the valves, only about 20% of valves were responsible for 95% of emissions. Similarly, in wells observed while unloading liquid, about a fifth of wells were responsible for 83% of emissions. These findings echo the comments of industry groups which argue that not all wells are responsible for leakage. Perhaps instead of an across-the-board solution, the president’s policy could target the worst offenders, lessening the regulatory burden for companies while concentrating efforts on fixes that will have the greatest impact.

(It should be noted – this University of Texas study was funded in part by oil and gas companies including Pioneer Natural Resources and XTO Energy, an Exxon-Mobil subsidiary. Another interesting find from the study – the EPA substantially underestimated both the number of pneumatic valves used in drilling and the amount of emissions per valve, raising concerns about the efficacy of the EPA’s natural gas data.)

President Obama will undoubtedly receive support from the environmental community and citizens concerned about climate change for his ambitious goal to cut methane emissions for the first time in our country’s history. But whether his goals will be met by the preliminary policy proposal released this week remains to be seen. The rules for methane emissions are still being finalized within the EPA and will not be released until 2016. In the meantime, the plan seems likely to be another heated talking point between green groups and fossil fuel industry supporters alike.