Recently, US President Barack Obama and Canadian Prime Minister Justin Trudeau discussed the importance of reducing methane gas emissions from oil and gas operations. Both countries have plans to limit fugitive gas emissions, which are far more complicit in greenhouse gas effects than carbon dioxide. Predictably, responses were split along the established and boring battle lines, with environmentalists cheering and energy industry groups lowering the flags to half-mast. Rather than get caught up in the dreary rhetoric of both sides, it’s worth a look at the reduction plans in a fresh light that considers not only the current sad state of the energy business but also the threat of other possible legislation that could do some real damage.
Current proposals will limit methane emissions from new wells and facilities, as well as tightening up standards for existing ones. Leaks, flaring and venting are a large problem from a global warming perspective. That perspective can be debated endlessly, but at the moment has captured the world’s attention and can’t really be ignored. It is all well and good to point out that swamps and gassy cows constitute the majority of the problem, which even the overlords of the climate change movement admit (wetlands, forests, oceans, and other environmental poster children create 70 percent of methane emissions), but in the context of possible legislation like Obama’s proposed oil tax maybe the industry should be cheering for this one instead. In other words, the energy industry should be grateful if this is as bad as it gets.
Fugitive natural gas emissions are a big problem in the murky world of climate change because methane is highly effective at trapping atmospheric heat. It is an ironically big problem, because climate change cops have spent countless hours and millions of dollars chasing CO2 boogeymen. The climate cops have been very good at making their case. The world is now terrified of inert, harmless things like pipelines or the 100-percent-organic oil deposits, that by the grace of the almighty, cover the surface of 140,000 square kilometers of northern Alberta. The climate community has convinced the public – through star-power and preposterous scenarios that are easily debunked – that oil sands development will flood the atmosphere with CO2 and hike the temperature, while it takes little effort to find out that methane is a far bigger problem. Many of us in the industry have watched this situation unfold with considerable bewilderment and incredulity, because it’s no secret that methane emissions are approximately 25 times more harmful than CO2, according to the US Environmental Protection Agency. But those facts get lost when news highlights dwell on bearded goofs chained to a pipeline valve, when the real problem (if it’s indeed a problem) is emanating from the bog down the road.
Obviously then, climate change as a science is disjointed from the public debate about it. If it were consistent, we’d be focused 25 to 1 on methane emissions. But public perception rules the day, and misinformation runs unchallenged. Kids are taught to vilify fossil fuels but admire organic wetlands because they’re full of clean ducks.
There is little value in going through that debate at present, or maybe there is if you have the energy and like fighting against fog. I don’t. Pragmatically speaking then, the energy business should be cheering on the fugitive methane reduction programs right alongside the green gangs that are trying to kill fossil fuel usage, because the alternatives could be a lot worse.
For instance, Obama’s proposed oil tax of $10 per barrel would have devastating consequences across the industry and would not really do much to change the course of global warming. If that tax knocked 10 percent off US consumption, two things would happen: one, I’d be very surprised, and two, the world would consume about 2 percent less oil. The net result then would be a negligible impact on greenhouse gases; any savings brought on by reduced oil consumption would be offset by the emissions from the rotting carcasses of energy companies.
The methane emissions reduction programs are admittedly a thorn in the side of an industry that’s presently suffering. But despite the reflexive howling of industry lobby groups, it still is not a bad idea. Is it asking too much of oil companies to tighten up processes, properly seal off tanks, and properly manage valves and venting mechanisms? Is asking companies to utilize waste gas instead of flaring it really unreasonable? In many instances this work should have been done long ago anyway, it’s nothing more than good stewardship of assets. It is ridiculous to think that a clever, intelligent and flexible industry like the oil and gas business can’t find a use for stranded natural gas besides flaring it.
Currently, fossil fuel extraction is under the microscope for environmental purposes, and also under great stress as a result of low commodity prices. Obviously that’s not a good combination. Some factors will right themselves, like low commodity prices, while others could be far more damaging in the long term. Some environmental proposals could do massive harm, as in Obama’s proposed oil tax.
Reducing methane emissions is as close as the industry and environmental groups will ever get to a win-win situation. A serious effort on that front would have a major impact on the level of greenhouse gas emissions created by industry, for whatever that’s worth. It would not nearly offset the impact of noxious bovines and rotting swamps, but would achieve the objective of reducing greenhouse gas emissions, would make the public less hostile and the industry more clean and efficient. It would also go a long way towards improving the “social license” (a dreadful but accurate phrase, these days) of energy companies to operate.
Read more insightful analysis from Terry Etam here