Reducing Natural Gas Leakage to Protect the Environment Is Easy to Do, Saves Money, and Creates Jobs

The summary of our report Waste Not was released today. The report discusses common sense ways to cut in half the methane pollution from the oil and natural gas industry, and the standards that the Environmental Protection Agency (EPA) can implement to ensure that these approaches are deployed widely across the industry. The report was jointly released by NRDC, Clean Air Task Force, and Sierra Club.

Read my colleagues' blog on why reducing leakage is important for the environment and how EPA can act. I will simply take this opportunity to emphasize and expand on three key points that our report makes.

1. Control measures for methane leakage from the oil and gas industry are tried-and-tested measures that have been amply demonstrated

Discussed in our report are five main sources and their control measures that are proven methods to reduce gas leakage. They are:

• Leak detection and repair: Detecting and repairing methane leaks from well-pads, processing plants, compressor stations, and large distribution facilities, using advanced equipment and appropriate testing protocols. This can reduce 1.70-1.80 million metric tons of methane per year.
• Fixing leaky pneumatic equipment: Installing leak-free new and existing pneumatic valve controllers and pumps (or low-leakage when leak-free equipment is infeasible). This can reduce 1.20-1.35 million metric tons of methane per year, along with the control measures immediately below.
• Fixing leaky compressors: Reducing emissions from new and existing reciprocal and centrifugal compressors, with better maintenance and operations.
• Reducing oil well venting: Using “green completions” to capture gas from oil wells, and if infeasible, flaring the gas rather than venting. This can reduce 0.26-0.50 million metric tons of methane per year, along with the control measures immediately below.
• Reducing leaks from producing wells: Using plunger lifts or other technologies at high-leakage gas wells, rather than crudely cleaning up the wells and venting to the atmosphere.

As demonstrated in our 2012 Leaking Profits report, these approaches have been used successfully by a number of companies in some of their facilities. Extending these approaches across the oil and gas industry would cut emissions by up to half. This reduction amounts to 3.2-3.7 million metric tons of methane, equivalent to cutting more than 130 million metric tons of carbon dioxide (taking a long-term climate perspective).

2. These control measures are low cost

Waste Not finds that, as indicated previously in our Leaking Profits report, and generally corroborated by a 2014 ICF report, these control measures are low cost, when taken individually or as a package. All of these approaches reduce natural gas leakage, and this retained gas can then either be sold or used onsite (while conserving valuable natural resources). As a result, some of these control measures actually save money, while others can operate at very low-cost. Waste Not finds that the substantial reductions can be achieved for less than 1 percent of the industry’s sales revenue. When we consider the social benefits of reducing methane leakage (i.e., using the social cost of methane), the benefits outweigh the costs of reducing leakage.

3. Reducing methane leakage creates jobs

As my earlier blog discussed, finding and fixing natural gas leaks from the oil and gas sector now constitutes an emerging industry, with the potential to create a large number and variety of well-paying jobs. This is according to a report released in October by Datu Research (prepared for Environmental Defense Fund). The industry currently encompasses 76 firms that manufacture equipment or offer services to control natural gas leaks, in over 530 locations across 46 states. The industry’s employees represent more than 30 different job types, and are paid a median hourly wage of $30.88 (compared to $19.60 for all U.S. jobs). Potential stronger standards from EPA may likely provide impetus to this burgeoning industry.

To sum up, EPA can and should set enhanced standards that directly address methane pollution from the oil and gas industry. The measures that would be needed have been proven and are low-cost. They will have significant environmental benefit, and are likely to have positive economic impacts too.