Energy Exchange

EU must take on its methane problem before turning to hydrogen

By Mark Brownstein / Published: July 20, 2020

Facing dangerous levels of warming, Europe aspires to achieve a net-zero carbon economy by 2050. The oil and gas industry want us to believe natural gas can play a constructive role in this green energy future. And right now, these companies are lining up behind the idea that European Union policymakers should invest heavily in new incentives for hydrogen as a way to store and deliver energy for transport and the electric system.

Hydrogen separated from water using renewable electricity — so called ‘green hydrogen’ — might be economically viable someday. But for now, the cheapest way to make hydrogen is by converting natural gas. Natural gas is a major source of carbon dioxide emissions; it also consists mostly of methane, which is itself a greenhouse pollutant, with over 80 times the near-term warming power of carbon dioxide.

When it comes to climate change and achieving a net-zero carbon future, natural gas solves nothing unless both carbon dioxide and methane emissions associated with its production, distribution and use are fully controlled. Opening up a whole new market for converting gas to hydrogen without clearly establishing how those emissions will be dealt with would only make a serious problem much worse.

The European Commission recently released two major energy policy strategies in which methane and role of natural gas are at issue.

Posted in Air Quality, Europe, Methane, Methane regulatons, Natural Gas / Comments are closed

5 questions on flaring for investors to ask oil and gas companies

By Dominic Watson / Published: July 15, 2020

For investors concerned with environmental, social and governance issues, flaring poses one of the most immediate and material risks to shareholder value in the oil and gas industry. For an industry that prides itself on operational excellence, flaring is a waste of potentially saleable product and an unsustainable industry practice with detrimental climate and public health effects.

But the practice of routine flaring, which burns off natural gas at oil and gas sites when producers are unprepared to transport or store the fuel, is also a challenge with clear opportunity for solutions. As J.P. Morgan Asset Management recently observed, “flaring is a problem with multiple solutions and a compelling long-term economic proposition.”

As industry, investors and Texas regulators begin to acknowledge the problem, how can shareholders support management teams’ continuous improvement and understand which operators are getting it right and which are not keeping pace?

Asking the right questions through shareholder engagement is a good place to start.

Posted in Air Quality, Methane, Natural Gas, Texas / Tagged New Mexico | Comments are closed

To fix flaring, Railroad Commission must tackle the incentive problem

By EDF Blogs / Published: May 29, 2020

Previously published in Shale Magazine

By Colin Leyden and Scott Anderson

A remarkable thing happened at the Texas Railroad Commission these past few weeks. Throughout the contentious debate over proration, a growing chorus of voices on both sides was calling on the commissioners to address flaring — an incredibly wasteful, environmentally damaging practice that has been giving producers a black eye for years.

During the epic 10-hour proration hearing on April 14, it wasn’t just environmental and health groups banging the drum on flaring. Large and small producers (both for and against proration), mineral rights groups and investors all called for action on flaring. So while proration may be off the agenda for now, the need and desire to address flaring lives on.

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

ERCOT forecast and new analysis show the Texas grid moving away from fossil fuels

By John Hall / Published: May 15, 2020

A duo of recent announcements underscore the clear direction the Texas grid is headed: toward more renewable energy, storage, energy efficiency and sophisticated demand-side management resources and away from coal.

That means less climate and local air pollution, of course. But it also means more local jobs, less volatile energy costs, a more stable and reliable grid and yet another opportunity for Texas to reap the economic benefits that come with being an energy pioneer.

Posted in Clean Energy, Demand Response, Energy Efficiency, Grid Modernization, Market resilience, Solar Energy, Texas / Tagged Energy Storage | Comments are closed

These two programs will help California reach its carbon-neutral goals

By Michael Colvin / Published: April 29, 2020

California is continuing its leadership on climate change by eliminating carbon from the economy and our daily lives. In fact, California has a law to create a carbon neutral electric grid by 2045.

This spring, our state took two important steps to support these efforts.

Decarbonizing our buildings

Approximately 25% of the state’s greenhouse gas emissions come from residential buildings. Because these buildings come in all different shapes and sizes, we need different strategies to reduce their emissions.

Posted in California, Clean Energy, Gas to Clean, Solar Energy, Wind Energy / Tagged Energy Storage | Comments are closed

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

By Dominic Watson / Published: April 21, 2020

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.

Posted in Air Quality, Methane, Methane regulatons, PermianMAP, Texas / Tagged New Mexico | Comments are closed