ExxonMobil Moves To Cut Methane Emissions

Ed Crooks, Financial Times  Tuesday, September 26

ExxonMobil Corp. (NYSE: XOM) has launched a plan to curb methane leaks from its shale oil and gas operations, taking unilateral action on an issue that has been the subject of sustained political and legal battles in the U.S. in recent years.

XTO Energy Inc., Exxon’s shale subsidiary, will replace equipment, train staff and research new technologies to curb leaks of methane, a potent greenhouse gas estimated to trap heat 28 to 36 times as effectively as carbon dioxide over 100 years.

ExxonMobil’s move comes even though the Trump administration is working to roll back or suspend regulations imposed under President Barack Obama to control methane leakage.

The new administration has suffered setbacks in Congress and the courts but is pressing ahead with its strategy, with the support of industry groups including the American Petroleum Institute.

ExxonMobil, which is the largest natural gas producer in the U.S., said it would be putting its leak reduction plan into action no matter what the administration and the courts eventually decide on regulation.

Sara Ortwein, president of XTO, said she expected to the program to have a “very meaningful impact” on the company’s methane emissions, but did not specify a target for the expected reduction. She also did not disclose how much the improvements would cost, or how much of those costs would be recovered by selling the retained methane.

The Environmental Defense Fund, which works with businesses and researchers on ways to reduce emissions and was briefed on ExxonMobil’s initiative last week, welcomed the plan and said it showed that other companies could follow suit.

Matt Watson, of the EDF, said: “This obliterates any argument that others might make that targeting methane leaks isn't feasible or would be too expensive.”

Methane is the principal component of natural gas, and the question of leakage is at the heart of the debate over whether the gas industry can contribute to addressing the threat of global warming.

Gas-fired power plants can have roughly half the carbon dioxide emissions of coal-fired plants, but some estimates have suggested that those greenhouse gas reductions are cancelled out by leaks from gas production, processing and transport.

A 2012 study by scientists at the EDF and elsewhere concluded that new gas-fired plants had lower net greenhouse gas emissions than new coal plants as long as no more than 3.2% of the methane escaped between the well and the power plant.

The U.S. Environmental Protection Agency estimated that in 2015 only about 1% of U.S. gas production escaped into the atmosphere from natural gas systems, but other estimates have been much higher.

The Obama administration imposed two sets of regulations intended to curb methane leakage: one aimed at preventing waste on land owned by the federal government and Native American tribes, and one governing emissions controls from new wells and other facilities.

The U.S. Senate defeated an attempt to strike down the regulations for federal and tribal lands in May. But the Trump administration is working on plans to suspend or roll back the rules, in the face of legal challenges from some states and environmental groups.

ExxonMobil’s plan includes some changes to equipment, including replacing pneumatic control devices that cause the greatest releases of gas, stepping up monitoring of leaks and researching new ways to detect and control them. The program will be deployed at XTO’s existing operations, as well as in new facilities such as the gas gathering and processing infrastructure the company is installing in the Permian Basin.

Ortwein said Exxon was “putting this in place regardless of where regulation ends up going.”

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