Energy Exchange

A zero flaring policy is long overdue, and investors can help make it reality

As investors take a hard look at the U.S. energy sector during this time of volatility, natural gas flaring is one of the most important and immediate risks to manage.

The eyesore of the oilfield, flaring natural gas destroys shareholder value and creates environmental, social and governance risk — exactly the kind of problem that an increasing number of asset managers, investment banks, and even private equity firms have promised to address.

Routine flaring is damaging the environment in several ways. In addition to the CO2 emissions from combusted gas, flares can release significant amounts of methane into the atmosphere. EDF’s recent helicopter survey found that more than one in every 10 flares at oil and gas sites across the Permian Basin was either unlit — venting uncombusted methane straight to the atmosphere — or only partially burning the gas they were releasing. In fact, the survey suggests that flaring could be among the region’s largest sources of fugitive methane and a troublesome contributor to local air pollution.

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Also posted in Air Quality, Climate, Methane, Natural Gas, PermianMAP, Texas / Comments are closed

However you measure it, Permian oil and gas operations have highest emissions ever measured in a U.S. oilfield

Two fundamentally different methods EDF is using to measure and understand methane emissions in the Permian Basin are producing strikingly similar results. The mutually reinforcing sets of data — one gathered using aircraft, the other by satellite — each show that oil and gas operators in the region are releasing more than 3.5% of the natural gas they extract from the ground into the atmosphere as methane pollution.

That’s roughly twice the average rate found in 11 other major U.S. oil and gas basins. The wasted gas in the Permian is enough to supply 2 million American homes for a year.

The first of these efforts is EDF’s year-long PermianMAP, which tracks emissions from the ground and in the air, and takes the unprecedented step of publishing data online in near-real time to help industry and officials reduce those emissions, while letting the public see the results. The other is the first peer-reviewed scientific study to take direct measurement of Permian emissions, using the European Space Agency’s TROPOMI instrument.

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Also posted in Air Quality, Climate, Methane, Methane regulatons, PermianMAP, Texas / Comments are closed

Satellites and state regulators: New data spotlights extreme emissions and need for action in nation’s largest oilfield

By Jon Goldstein and Colin Leyden

This week a study drawing on nearly a year’s worth of satellite data revealed that Permian methane emissions are the highest ever measured from a U.S. oil and gas basin.

As the federal government continues its rollback of methane safeguards, public attention is now trained on policymakers and companies in Texas and New Mexico — two leading oil producing states that straddle the Permian Basin.

While New Mexico Gov. Michelle Lujan Grisham forges ahead on nation-leading rules to curb oil and gas methane waste and pollution, state leaders in Texas have yet to get serious about a problem that could undermine the industry’s viability in an economy that increasingly prioritizes cleaner sources of energy.

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Also posted in Air Quality, Climate, Methane, Methane regulatons, Natural Gas, PermianMAP, Texas / Comments are closed

New data finds alarming levels of methane emissions in the Permian, posing long-term risk for oil and gas portfolios

Investors managing oil and gas portfolios are contending with major disruption as two interrelated crises play out: the global COVID-19 pandemic and extreme volatility in the price of oil. Yet even before these events, cracks were showing in the sector’s financial footing. Pressure has been rising on industry to improve returns, while demand to deliver on Environmental Societal Governance initiatives has never been higher.

Into this mix comes new data from scientists working with EDF’s PermianMAP initiative showing that methane emissions in the Permian Basin, the world’s largest oil field, is nearly three times the rate reported in Environmental Protection Agency’s nationwide statistics.

The 3.5% loss rate estimated in the data area is roughly 15 times higher than reduction targets set by leading producers, and significantly higher than many companies have reported. It translates to 1.4 million tons of wasted gas each year, enough to meet the annual natural gas needs of every home in Dallas and Houston combined.

The findings surface a material risk to oil and gas investors and to the future of natural gas from the Permian Basin. At current emissions rates from the basin, burning Permian natural gas for electricity does more near-term climate damage than coal.

A year from now, the U.S. oil and gas sector may look very different for many of the independent operators who make up a large portion of Permian producers. Withstanding this period of economic turbulence will require companies to make tough decisions. Yet even in this time of crisis, operators must keep an eye on future market demands, operational excellence and climate performance.

Permian study findings

The Permian sprawls across West Texas and New Mexico and has more than 100,000 operating well sites. Between October 2019 and March 2020, EDF scientists collaborated with academic institutions to collect data using tower-based monitors, ground-based mobile sensors, helicopters and fixed wing aircraft across a 10,000-square-kilometer study area responsible for 40% of Permian production.

The estimated 3.5% leak rate reflected in the new data stands in stark contrast to the .20% leakage rate agreed to by the 13 of the world’s largest operators in the Oil and Gas Climate Initiative, representing 30% of global oil and gas production. Furthermore, the emissions rate seen in the Permian is more than 10 times the methane intensity of 0.29% that OGCI has been reporting for 2018.

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Also posted in Air Quality, Methane, Methane regulatons, PermianMAP, Texas / Comments are closed

Groundbreaking data is a wake-up call in the Permian, call to action for New Mexico

Last year, EDF announced a first-of-its-kind project to measure and map emissions from the Permian Basin — the nation’s most productive oilfield and the primary source of New Mexico’s methane problem.

Although the Permian Basin has led the world in oil and gas production, public data on its emissions has been near nonexistent. PermianMAP is changing that, and we’ve launched the project’s first tranche of data to help regulators, companies and the public understand and address the region’s methane challenge.

The scale of emissions PermianMAP uncovered is sobering, but this publicly available data will prove critical as New Mexico advances nation-leading rules under Gov. Lujan Grisham to cut methane pollution and achieve the state’s climate and clean air goals.

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Also posted in Climate, Methane, Natural Gas, PermianMAP / Comments are closed

Exxon methane proposal shows promise, but misses the mark on rigor, reductions

It’s big news when one of the world’s largest oil and gas companies announces it supports hard and fast regulations to reduce its industry’s methane emissions. And it deserves to be, since methane pollution is supercharging the climate crisis and enforceable, comprehensive regulations are the only proven way to make a significant dent in this problem.

However, go a level deeper on the Model Regulatory Framework Exxon unveiled this week and it quickly becomes clear that the specific strategies it proposes lack the ambition needed to dramatically reduce oil and gas methane emissions industrywide. Far from a nationally leading set of proposals, if implemented, they would actually be weaker than the methane standards currently in place in several leading states as well as the Environmental Protection Agency’s current requirements.

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Also posted in Methane, Methane regulatons, Natural Gas / Comments are closed