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Permalink Reply by Skip Peel - Mineral Consultant on August 20, 2015 at 15:28

It Pays to Rein in Methane Emissions

There are cost-effective technologies to reduce leaks from all aspects of natural gas development. Most pay for themselves in three years or less. Voluntary measures to reduce methane leaks have already increased natural gas sales revenue by more than $264 million, according to EPA. And studies show that the natural gas industry could save more than $1 billion per year by capturing additional wasted gas.

So Why Aren’t Companies Using these Cost-Effective Technologies?

Thousands of independent companies operate throughout the natural gas supply chain. Smaller contractors and service providers often don’t actually own the gas that flows through their equipment, and as a result, they lack incentive to invest in equipment that reduces leaks, since they won’t share in the revenue from selling additional gas. The lack of effective emissions monitoring means many companies may be unaware of how much of their valuable product is being wasted.

Additional Policies Are Needed

Federal agencies can help drive investment in technologies that reduce methane leakage, and EPA’s intention to propose new methane standards this summer is a great start. Yet there is more that both EPA and other agencies can do to rein in methane emissions. For example, EPA should:

· Go after existing sources of methane emissions. Retrofitting existing equipment and performing leak detection and repair can achieve further emissions reductions without causing undue burden for industry. Previous research by WRI and others suggests that further reductions are possible with current technology and at little to no cost to industry.

· Address methane directly from all sources. Methane is the primary component of natural gas, especially after processing strips out many impurities. Targeting methane directly will ensure that companies achieve the full methane reduction potential, while still making important reductions in local air pollution.

Other policies that could complement new standards include:

· Agencies like the Federal Energy Regulatory Commission and EPA should work with industry to revise contracts so that companies throughout the natural gas supply chain can share in the savings from reducing wasted gas.

· The Department of Energy should continue to research and develop technologies that measure methane emissions and cut down on leaks, driving down the cost of this equipment for natural gas companies.

World Resources Institute wri.org (Excerpt)

Link to complete article:  http://www.wri.org/blog/2015/01/how-us-can-lower-methane-emissions-...

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Permalink Reply by RGV AG on August 20, 2015 at 15:41

A new study of methane emissions finds that the U.S. is spewing 50 percent more methane, a greenhouse gas 21 times better at trapping heat than carbon dioxide, into the atmosphere than the Environmental Protection Agency previously assumed. Several factors contribute to the accumulation of methane gas in Earth’s atmosphere, such as the burning of fossil fuels and leaks from oil and gas refining and drilling, but one contender stands out above the rest as particularly repugnant: cow farts.

“Overall, we conclude that methane emissions associated with both the animal husbandry and fossil fuel industries have larger greenhouse gas impacts than indicated by existing inventories,” the authors of the study, published Monday in the journal Proceedings of the National Academy of Science, wrote. 

According to the new research, livestock’s noxious flatulence accounts for a large portion of the methane gas being released into the atmosphere. Researchers say cows are producing twice as much methane gas as scientists previously believed. The states producing the most methane gas were Texas, Oklahoma and Kansas – which also happen to have a lot of cows, oil and gas.

Carbon dioxide is still the primary greenhouse gas, which research has shown contributes significantly to global warming. But methane is certainly a formidable contender, among others such as nitrous oxide and ozone. 

The EPA has also recognized the contribution cow farts are making to Earth’s greenhouse gases, stating earlier that globally, livestock are the “largest source of methane from human-related activities,” and are the third largest source of methane in the U.S. A 1995 study of methane emissions from cattle found that cows typically lose about 6 percent of their ingested energy as methane, partly a result of their slow digestive process. A single cow can produce between 250 and 500 liters, or about 66 to 132 gallons, of methane a day (the average U.S. vehicle gas tank can hold about 16 gallons of gas).

The new study of methane emissions in the U.S. was based on nearly 13,000 measurements taken from airplane flights and tall towers. Scientists in California collected data from 2008 and found that in that year, the U.S. dumped nearly 49 million tons of methane into the air. That’s much more than the 32 million tons estimated by the EPA.

"Something is very much off in the inventories," study co-author Anna Michalak, an Earth scientist at the Carnegie Institution for Science in Stanford, Calif., told The Associated Press. "The total U.S. impact on the world's energy budget is different than we thought, and it's worse."

The study finds fault with the EPA’s earlier estimates, calling attention to the agency’s need to update how it tracks greenhouse gas emissions. The difference, researchers say, comes from how the government agency chose to calculate the methane emission estimates, opting for a “bottom-up approach.” This means they estimated methane emissions by looking at the amount of gas released per unit of something – whether that unit be a cow, a coal plant or a tank of gas sold.

The new study, on the other hand, used a top-down approach, first measuring what is actually in the atmosphere and then working backward to pinpoint a source.

“The bottom-up and top-down approaches give us very different answers about the level of methane gas emissions,” lead author Scot M. Miller, a doctoral student in Earth and planetary sciences at the Harvard Graduate School of Arts and Sciences, said in a press release. “Most strikingly, our results are higher by a factor of 2.7 over the South Central United States, which we know is a key region for fossil-fuel extraction and refining. It will be important to resolve that discrepancy in order to fully understand the impact of these industries on methane emissions.”

The EPA has said it will review the new study and “E.P.A. has not yet had the opportunity to fully review the PNAS study on methane emissions; however we are encouraged that more methane emissions measurement data are now available to the public,” EPA spokesperson Alisha Johnson told The New York Times.

So how can we get cows to quit farting? According to German-based DW Akademie, changing our livestock’s diet could help curb some of those cow farts. Instead of feeding cow a predominantly corn and soy based diet, some researchers think mixing in alfalfa, linseed and grass – essentially changing the levels of fatty acids in a cow’s feed – could reduce the amount of methane they produce.

A 2011 study also noted that cows fed predominantly silage, a common fodder for cattle and sheep, produced significantly more methane than cows whose diets were supplemented by concentrate feed. 

http://www.ibtimes.com/cow-farts-have-larger-greenhouse-gas-impact-...

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Permalink Reply by Skip Peel - Mineral Consultant on August 21, 2015 at 1:17

The energy industry has a tug of war going on within its ranks.  Some will resist by all means at their disposal any attempt to regulate their industry while others see the writing on the wall quite clearly and know two things:  public opinion has slowly but decidedly moved toward supporting regulations of green house gases and that there are long term business advantages to being a part of the discussion and helping to steer regulations in a way that minimizes their business expense and supports their bottom line.  This article is a good example.  I've read quite a few like it very recently.

Tighter methane rules can work, Colorado test shows

By Bloomberg News

Friday, Aug. 21, 2015, 12:01 a.m.
 

For an idea of how the federal government's proposed methane rules will affect drillers, look no further than Colorado.

The state became a test case for similar controls last year when a coalition of energy companies and environmental groups agreed on measures to cut the pollution. In a bid to address smog, regulators there adopted the nation's first requirements for oil and natural gas companies to find and fix methane leaks.

Drillers who were already voluntarily curbing emissions accepted Colorado's rules with little opposition. Gas production in May was up 1.5 percent from the same period two years earlier, Energy Information Administration data show. A state analysis estimated that the rules cost drillers about 0.4 percent of their annual revenues.

“Methane is a product we sell, so it's in our business interest as well as in our general interest as environmental stewards to make sure every molecule goes into the sales line,” John Christiansen, a spokesman for Anadarko Petroleum Corp., said Tuesday.

Industry groups such as the American Petroleum Institute criticized rules proposed Tuesday by the Environmental Protection Agency to curb methane emissions in the country, saying they would exacerbate an already painful price crash. Crude oil has slumped by about half in a year, while gas prices have dropped 30 percent.

“The administration is proposing a costly and complicated regulatory program for few environmental benefits,” Barry Russell, president of the Independent Petroleum Association of America, said in a statement.

Such a powerful impact has not been felt by companies that have taken steps to detect and plug leaks. Because the drillers can sell the extra gas they capture, the methods will pay for themselves in 12 to 15 months, said Mark Boling, general counsel for Southwestern Energy Co.

“It has been very effective at identifying leaks and cost- effectively eliminating them,” said Boling, who worked with the Environmental Defense Fund to develop a set of recommendations for reducing methane emissions and preventing possible water contamination from drilling.

Colorado's measures are more stringent than those proposed Tuesday by the EPA, which would require producers to upgrade pumps and compressors on new wells and expand the use of methane-capturing equipment for gas and oil wells.

The agency's plan is “manageable from a cost perspective and unlikely to materially affect natural gas production levels in the U.S.,” Nicholas Potter and Michael Cohen, analysts at Barclays Plc in New York, wrote Wednesday in a note to clients.

Most of the technology that can be used to detect and repair methane leaks will pay for itself in less than three years, according to Barclays.

The EPA proposal is part of an initiative to reduce leaks of methane, a more potent greenhouse gas than carbon dioxide, by 40 percent to 45 percent from 2012 levels by 2025.

While the federal mandates would apply to new wells, Colorado's regulations cover existing sources.

“Colorado is ahead of the pack because it already has rules for reducing methane and other air pollutants from across the oil and gas value chain, including production and processing,” said Cheryl Wilson, an analyst with Bloomberg Intelligence in Washington, said Tuesday.

Noble Energy Inc., Colorado's second-largest oil driller, said last year that the state's methane regulations would cost the company $3 million annually. That compares with its $1.8 billion capital budget this year for the Denver-Julesburg Basin and the Marcellus shale in the eastern United States.

Anadarko and other producers are using infrared cameras to detect methane releases and have upgraded pneumatic valves.

“Since the implementation, we've heard zero complaints about the cost and practicality,” Dan Grossman, Rocky Mountain regional director for the Environmental Defense Fund in Boulder, Colorado, said Tuesday.

There has been no court challenge, Grossman noted.

The API has meanwhile described the EPA proposal as duplicative and costly, warning that it will “undermine America's competitiveness.” The EPA estimates methane accounted for about 10 percent of total U.S. greenhouse-gas emissions in 2012, with the oil and gas industry responsible for almost a third of the emissions.

U.S. methane emissions have fallen 38 percent since 2005, gas producers say, citing EPA data. Over the same period, production is up 35 percent.

Without new restrictions, emissions are set to rebound in coming years, according to the agency. The EPA plans to finalize the rules in 2016.

“We're talking about a product, methane, that these operators sell to offset the cost of the regulations,” Grossman said. “That helps to ease the burden for them.”

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Permalink Reply by Keith Mauck (Site Publisher) on August 21, 2015 at 2:36

Over the last several years Ive had the opportunity to hear from quite a few executives from varying sizes of operators.

What I've heard is that at some point launching new regulations has got to stop. The larger companies are more open to a heavier burden of regulations, but they want politicians to make up their minds and leave it alone.

Smaller companies don't want any more regulatory burden period.

But each segment believes there must be a regulatory limit. That isn't going to happen under this administration.

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Permalink Reply by Skip Peel - Mineral Consultant on August 21, 2015 at 2:59

The industry has been anti-regulation long before the last few years.  That mindset has existed since derricks were made of wood.  For those that don't believe the prevailing climate science, or choose to lobby against it to support flawed business models, it's a an easy decision.  For those who think climate change is irreversible short of the most drastic of measures, no amount of regulation is enough.  For many who find the science of climate change convincing and are put off by those who occupy both extremes of the debate, the question is not the number or type of regulations. The question is,  do the regulations make sense as to the underlying science and do they represent a practical approach to reducing emissions?  For them doing nothing or allowing the industry to decide what they will and will not do is not an option.

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Permalink Reply by Skip Peel - Mineral Consultant on August 21, 2015 at 14:10

Proposed limits on methane emissions needed

By Chris Tomlinson, Houston Chronicle  August 21, 2015  Business

Natural gas producers have a choice to make: Contribute to the problem of climate change and look greedy or become part of the solution, appear forward-thinking and make more money.

Oil and natural gas lobbyists predictably howled last week when the U.S. Environmental Protection Agency announced new federal limits on emissions of methane, the key component of natural gas. But what the lobbyists will not admit is how much the industry and mineral rights holders could benefit from plugging leaky equipment.

The Obama administration and many environmental groups support using more natural gas because it is plentiful and burns cleaner than other fossil fuels. Some environmentalists, though, argue that the benefits are outweighed by methane leaks during the production and processing of natural gas, because methane is a potent contributor to global warming.

No one doubts natural gas will play a major role in reducing carbon emissions, but how big a role and for how long depends on the industry plugging the leaks. The EPA rules are intended to make natural gas a more effective alternative to coal.

Within hours of the EPA’s announcement, though, American Petroleum Institute President Jack Gerard said the rules are “duplicative, costly, and undermine America’s competitiveness.” He said the industry is already addressing the problem and doesn’t need additional government oversight.

The Environmental Science & Technology journal, meanwhile, published a new scientific study that day showing that U.S. natural gas facilities leak about 100 billion cubic feet of natural gas a year, eight times more than previous EPA estimates. The study focused on natural gas gathering facilities that are not currently monitored by federal officials.

That is $300 million worth of natural gas, by the way, and is in addition to the $1.8 billion worth of natural gas that the EPA says is lost each year to leaks and flaring, which is the burning of gas at the well because there is no capacity to capture it.

That $2 billion could easily buy the equipment necessary to capture methane emissions.

The EPA’s proposals are already enforced by state authorities in Colorado and Wyoming where operators helped negotiate them. The cost of compliance was only 0.4 percent of annual revenues, according to Colorado officials. Mark Boling, general counsel for Southwestern Energy Co., recently said the new measures paid for themselves in 12 to 15 months.

If natural gas executives try to demonize and overturn the EPA’s measures, their strategy will appear to be focused only on higher profits at the expense of the environment. If they accept the rules, the sector will appear to be acting in the best interest of both shareholders and the public.

This is an important choice since energy company CEOs routinely complain about the industry’s public image. Almost every executive speech I’ve heard in the last two years has included a passage about how the industry must do a better job of winning public support for the companies whose product make modern life possible.

“We must emphasize how the energy industry leads,” Exxon Mobil CEO Rex Tillerson said at IHS CERAWeek in April. “It is our sustained efforts that enable a more efficient and safer use of environmental resources.”

If U.S. oil companies need a playbook, they need only look to Europe where BP, Total, Eni and Statoil are implementing this strategy. Ben van Beurden, Royal Dutch Shell’s chief executive, called on the industry to encourage the use of natural gas and help slow climate change.

 

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Permalink Reply by Hopeful About Natural Gas on August 21, 2015 at 21:30

Less than 10 years ago most people who knew the word "methane" were either middle school boys lighting their f_rts or a few scientists concerned with pollution from cow poop. Then, the Haynesville Shale was announced and that started years of news reports about natural gas.

This is one issue the natural gas community cannot get around. It must show that it is in favor of curbing methane from both new and old wells. I don't believe we will ever see the public embrace natural gas as a true "bridge fuel" unless they believe the industry is committed to reducing methane. That has become the main argument against natural gas. We are now seen as a contributor to global warming whereas 10 years ago natural gas was the fuel that was going to save the planet and the economy.

Despite (or perhaps because of) millions of dollars in ads on CNN, MSNBC and FOX the public is more aware of natural gas than ever before.  Add in fears of explosions and earthquakes and the public could turn against natural gas very easily. The calls to ban fracking could become much louder if the industry does not appear to be taking the threat of methane very seriously.

Oops, I almost forgot that pesky little problem of water - needed lots of it for fracking and then deciding what to do with it later. My part of the country is in a drought this year and people are becoming very worried about the long term availability of water to grow food.

It's more than middle school boys who know about methane these days.

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Permalink Reply by Skip Peel - Mineral Consultant on August 22, 2015 at 4:23

Speaking of water, Hopeful:  The industry has options to address their use and conservation of water.  There is a lot of innovation occurring in areas where water resources are limited.  As the technology advances and becomes less expensive it can be used in all operating areas regardless of water scarcity or abundance.  Using water from non-potable sources and re-using recovered water is the only sensible means to address that part of the challenge.

In downturn, frackers turn to toilet water in drought-prone Texas

HOUSTON | By Anna Driver reuters.com  Fri Aug 21, 2015 1:00am EDT

Aug 21 Top shale oil producer Pioneer Natural Resources Co has found an unusual way to both save water and cut costs for its wells: tapping the treated runoff from toilets, sinks and showers in west Texas.

Pioneer has signed an 11-year, $117 million deal with the city of Odessa, Texas that will guarantee it access to millions of gallons of treated municipal wastewater each day, for use in nearby oilfields. Deliveries of the so-called effluent, are expected to start at the end of the year.

As crude oil has slid to its lowest level in six years -currently about $40 a barrel - oil and gas companies pumping from shale rock have tried to cut every unnecessary penny from their operations. Water acquisition and transportation can be up to 10 percent of the cost of drilling and fracking a well, according to consulting firm IHS.

Producers are also trying to mitigate long-term risks of water scarcity in the arid Permian Basin of West Texas, where the top U.S. oilfield is situated.

Oil and gas companies operating in area, including Pioneer and Apache Corp, have long sought cheaper, more environmentally sound sources of water to use for fracking.

For example, both companies have drawn some of the water they use in their operations from the Permian's brackish aquifers, which contain water unfit for drinking. Both companies also have worked to recycle water that is used for frack jobs or found in the ground while drilling.

During hydraulic fracturing, or fracking, million of gallons of water are blasted, along with sand and chemicals, into a well drilled through shale or other rocks. The high-pressure slurry cracks the rock, allowing oil and gas to escape and exit the well.

Pioneer is the first oil and gas company to sign a long-term wastewater supply contract with Odessa, a city of about 110,000 people. The Dallas-based company recently began construction on a pipeline network that will transport the treated water from the city's sewage plant to one of its oilfields about 20 miles away.

"The money has been approved," said Stephen McNair, president of Pioneer's water management group.

Pioneer's goal is to eliminate the use of fresh water in fracking in 5 to 10 years, said McNair.

The municipal reclaimed water the company intends to use comes from sewage plants that treat human waste and water from activities that include bathing and food preparation, according to Texas regulators.

City officials say the deal will provide a steady stream of revenue and reduces truck traffic.

"We didn't think we were making our highest and best use of our effluent water, we were using a lot for irrigation," said Larry Long, the Odessa city attorney who helped to negotiate the deal with Pioneer. "We thought it had more value going to the oil companies," he said, noting that it would allow potable water currently going to the oil fields to be put to other uses.

EOG Resources Inc, which has wells in the Eagle Ford formation in South Texas, is considering using water from wastewater treatment plants, according to its web site. And Anadarko Petroleum Corp uses treated water purchased from the city of Aurora in Colorado, according to a spokesman.

Alpha Reclaim, a private Houston company owned by BNN Energy that supplies reclaimed water to oil companies in Texas, has dealings or contracts with about 30 cities in Texas, including Big Lake in the western part of the state. The firm is looking to grow its water business, including its use of reclaimed wastewater.

"We see a lot of opportunity," said Mark Ritchie, a vice president at Alpha Reclaim.

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Permalink Reply by Hopeful About Natural Gas on August 22, 2015 at 13:22

Toilet water for fracking! it's perfect, both from the use of water (with it's own grease) and it's also a good image for the mind (ok, it appeals to the middle school boy in me).  That has good promise to become popular with the public.

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Permalink Reply by Timothy Stepnowsky on August 23, 2015 at 11:46

this thread is mislabeled.  Controlling leaks is something the industry, from a profit standpoint, could have corrected years ago.  Plugging leaks is a no brainer.  Its sad it takes a threat from washington to clean up your own kitchen.  

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Permalink Reply by Skip Peel - Mineral Consultant on August 23, 2015 at 14:22

Timothy, over the last several years a number of operators have instituted testing and mitigation programs in their natural gas plays.  It makes good sense for them and their investments create a return.  There are two areas that I can think of that are challenges.  Midstream companies will bear significant costs with little of the profit potential.  There needs to be a means to incentivize them to adopt the same testing and mitigation programs.  And oil plays with pipeline constraints where a company needs to flow a well to generate cash flow but has to flare gas in order to accomplish that.  The volume of associated gas is small in relation to natural gas wells but still a concern.  There are new methods of collecting that gas and using it for drilling related purposes that are in the early stages of testing.  Although some energy companies are embracing these challenges, some are not.  Federal regulations would be appropriate to set the minimum standards IMO.

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