Energy Exchange

Methane Emissions are Risky Business for Investors

By Sean Wright / Published: January 12, 2016

No one likes uncertainty, least of all investors. From changes in interest rates, to supply chain disruptions, the list of risks investors must monitor is long and growing. Good, actionable information is investors’ most important tool for risk management and integral to successful investing. Without proper data, investors are flying blind.

A new report published by EDF this week throws the spotlight on a growing risk for investors—methane emissions from the oil and gas sector. As so clearly demonstrated by the ongoing and massive leak at Aliso Canyon, methane emissions pose a multitude of expanding risks, with both short and long-term consequences.Three key risks from oil & gas methane

At 84 times more powerful than carbon dioxide in the short-term, methane emissions represent a potent and fast-emerging form of carbon risk. In a world looking to reduce carbon pollution, methane emissions pose regulatory, reputational and economic risks. Preparedness to comply with forthcoming rules varies across the industry, methane undercuts natural gas’ ability to play a role in a carbon-constrained world, and emissions of methane are lost product amounting to $30 billion a year globally. Read More »

Also posted in Aliso Canyon, Methane / Comments are closed

Tech Innovation in the Energy Utility Space: Good News & Room for More

By Simi George / Published: December 17, 2015

A survey released this month by a top management consulting firm found that 80 percent of the companies polled – including Apple, Google and Tesla – rank innovation among their top three strategic priorities. Unfortunately, the nation’s utility sector seems to be behind the curve when it comes to embracing this idea.

Utility companies invested just 0.1 percent of revenue in research and development in 2013, according to the National Regulatory Research Institute. That’s less than 1/30^th the national average of 3.3 percent for all industries. In fact, R&D spending by energy utilities has declined in absolute terms since the mid-90s. But that’s only one piece of the problem. There’s also the related problem of low adoption of new technologies by the sector, which some have attributed to a culture of caution.

That’s why it was so noteworthy when Public Service Electric & Gas Company (PSE&G), New Jersey’s largest and oldest publicly-owned utility, announced it will use data gathered by EDF using cutting-edge leak quantification technology to prioritize a massive $905 million pipeline replacement program. After assessing public safety considerations, PSE&G will use data on methane emissions from its pipes to identify those most in need of replacement. Read More »

Also posted in General, Methane / Comments are closed

Infrared Camera Reveals Huge, Wafting Cloud of Methane over California’s Aliso Canyon

By Tim O'Connor / Published: December 10, 2015

Methane pollution from the oil and gas industry is a serious problem for our climate and communities, but it’s one most people aren’t even aware of. That’s because, while methane is a powerful pollutant, it is colorless, odorless and invisible to the naked eye.

But residents of Southern California’s Porter Ranch neighborhood had their eyes opened wide to the methane problem when a natural gas storage well in nearby Aliso Canyon ruptured and created a massive leak right next to their homes – an incident detected by residents in October from the putrid smell of mercaptan, an additive utilities use to more easily detect natural gas leaks.

Natural gas is made mostly of methane, and when it is released unburned, it has a warming power over 84 times that of carbon dioxide over 20 years. So, leaking or intentionally emitting unburned natural gas – which happens not just through malfunctions but often during routine production and transportation of oil and gas – can do major climate damage. The California Air Resources Board estimates that Aliso Canyon is pumping out methane at about 50,000 kg per hour, or about 62 million standard cubic feet, per day – that’s the same 20-year greenhouse gas impact as the daily emissions from 7 million cars.

Now, on day 48 in a very uncertain timeline of the one of the largest U.S. natural gas leaks ever recorded, infrared cameras are giving us a true glimpse at the size of this man-made methane volcano. Looking at side-by-side images of Aliso Canyon taken on Dec. 9 using an everyday camera and one equipped with infrared technology reveals just how blind we are to this kind of pollution:

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Caution: Future Market Need for Natural Gas Pipelines is Smaller than You Think

By N. Jonathan Peress / Published: December 10, 2015

Like a racer facing a caution flag warning of hazards ahead, America’s natural gas pipeline developers are seeing signs that their business plans aren’t tracking with the future. Mistakes in this race carry price tags in the billions, and could leave ratepayers (in other words, the public) footing the bill for decades to come.

Two recent developments in particular – a report from the Massachusetts Attorney General’s Office and a rate case at the Federal Energy Regulatory Commission (FERC) – show that the economics for new natural gas pipeline capacity to supply power plants are not as compelling or sustainable as the conventional wisdom would have you believe.

Together, the AG report and the FERC case provide a strong counterpoint to those now rushing to create excessive new pipeline capacity. They suggest that many pipelines will lose customers and money as lower cost alternatives outcompete them, and long before investor expectations are met and their financing is paid off. The question is whether policymakers and pipeline developers will slow down and consider the dangers, or continue to plow ahead. Read More »

Posted in Natural Gas / Comments are closed

The World Has A Methane Problem – But We Can Solve It

By Fred Krupp / Published: December 9, 2015

As I write this, a massive methane leak from a ruptured natural gas storage facility in California is causing, every day, as much climate damage over the next 20 years as seven million cars on the road.

And as the climate talks here in Paris continued over the weekend, The Washington Post noted an increased focus on short-lived climate pollutants such as methane. This focus is an absolute necessity: If we want to solve climate change, we have no choice but to tackle methane emissions.

According to data from the Intergovernmental Panel on Climate Change, methane pollution is responsible for 25 percent of the warming our planet is experiencing today. It has this incredible impact because it’s 84 times more potent than carbon dioxide over the short term.

The largest industrial source of methane emissions is the oil and gas industry, and their environmental impact is staggering: A short-term climate impact equivalent to 40 percent of global coal combustion. That’s a lot of potential benefit to the climate, if we can make significant reductions.

That math is why the danger of unchecked methane pollution also offers us such an opportunity. Read More »

Also posted in Methane / Comments are closed

New Study Finds Oil & Gas Methane Emissions in the Barnett Shale Almost Twice What Official Estimates Suggest

By Steven Hamburg / Published: December 7, 2015

A new scientific study published today in the Proceedings of the National Academy of Sciences, coordinated by EDF, reports findings from the most comprehensive examination of regional methane emissions completed to date. Focused on Texas’ Barnett Shale – one of the nation’s major oil-and-gas-producing regions – the study uses a new, more accurate way to determine the total amount of methane escaping into the atmosphere from the region’s oil and gas production, processing and transportation.

The result is that methane emissions in the Barnett Shale are 90 percent higher than EPA’s inventory data would suggest.

This is just one of several recent studies showing a pattern of underestimating methane emissions in locations across the country. One big reason is that conventional inventories typically fail to accurately account for very large, unpredictable emissions from leaks, malfunctions or other problems. In the Barnett study, these were the source of a large share of total emissions.

Why Methane Matters

The higher emissions rate and the agreement among measurement methods represent an important step forward in our understanding of what it will take to mitigate those emissions. Methane is the main ingredient in natural gas, and a highly potent greenhouse gas, with over 80 times the 20-year warming power of carbon dioxide.

When methane leaks, the climate impact of using natural gas increases. In the case of Barnett Shale gas, based on emissions identified in the study, the climate impact is 50 percent higher over 20 years as compared to the use of natural gas in the absence of any emissions. Read More »

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