This week U.S. President Barack Obama took aim at the American coal industry as part of a comprehensive climate change plan to limit air emissions from what many consider the country's worst polluter.
Under the plan, states will have until 2030 to cut CO2 levels by a third from what they were in 2005. Outside the United States, Europe is using less coal, the Canadian province of Ontario shut down its coal-fired power generation (albeit in favor of more expensive renewables), and the World Bank last week rejected the notion that coal can cure poverty.
Even coal-hungry China has banned coal-fired power plants in Beijing, finally cowing to health and environmental concerns in the smog-choked capital.
Having turned their backs on coal, many countries are looking to natural gas as an alternative power source. China is plunging headlong into building liquefied natural gas import terminals, and countries are lining up to export it, including Australia, Russia and the United States, which in 2014 approved its fourth LNG export terminal, Dominion Cove Point in Maryland. Related: Global Oil Supply More Fragile Than You Think
British Columbia’s governing Liberal Party has staked its political future on developing LNG terminals to receive natural gas from the Canadian province's northeast region, telling voters in the last election it would use revenues from LNG production to wipe out the provincial debt.
Part of the sales job was to characterize natural gas as a clean fuel whose use will actually help decrease global fossil fuel emissions, since nations that switch to it are typically moving from dirty coal-fired power to clean LNG.
But is natural gas really as pristine as its proponents claim?
Not according to a new report released by the Environmental Defense Fund (EDF) in June. The report estimated the amount of gas that is leaked, vented or flared from natural gas and oil production on U.S. federal and tribal lands. It found that 65 billion cubic feet was released in 2013 – the equivalent of the greenhouse gases produced by 5.6 million cars. In New Mexico, a methane “hot spot,” was detected by NASA satellites and in one drilling-heavy part of Wyoming a town measured air pollution readings that rivaled Los Angeles. Related: Even The Saudis Need To Borrow To Survive Oil Price Slump
The amount of leaked gas is massive in economic as well as environmental terms; at current prices, the escaped product is worth $360 million.
But the main worry is the amount of methane escaping from natural gas wells. As the main ingredient of natural gas, methane is considered 30 to 84 times more powerful than CO2. A senior researcher at Food and Water Watch, a nonprofit, told The Guardian that the EDF's numbers suggest about 2.2 percent of the gas measured in their study is leaking – enough to negate the environmental benefits of natural gas over coal.
How is the industry allowing this to happen?
One source is a pneumatic controller that opens and closes valves used in gas pipelines. In a 2014 test of 100 wells in Texas, one fifth of the pneumatic controllers emitted all the leaked methane. In another widely used practice, liquid unloading, “[r]ising gas carries liquid with it that can plug up the well. When workers remove the liquid, gas escapes into the air, sometimes tens of thousands of cubic feet of gas,” according to a 2014 NPR radio interview about the research.
There is evidence to suggest that, like the small percentage of old clunkers on highways that create most of the pollution, it's the bad apples of the natural gas industry that are leaking much of the gas. Another recently published study in Environmental Science & Technology found that a relatively small number of large leaks from run-down equipment and facilities accounted for 40 percent of all methane leaking from the United States' pipeline and natural gas storage infrastructure. Ways for companies to reduce natural gas leaks include replacing old reciprocating compressors with newer models that emit a lot less methane. Related: The Latest Contender For The Next Shale Boom
In the United States, federal and state governments are cracking down on methane leaks from the oil and gas industry. In January the EPA announced its first-ever standards to cut methane emissions. The standards aim to reduce methane emissions up to 45 percent by 2025, from a 2012 baseline. The new rules will address emissions from hydraulic fracturing at the wellhead, with the EPA requiring flowback mixture gases, which often contain methane, to be captured rather than allowed to return to the surface. For oil and gas operators, that means employing reduced emission completion (REC) technologies, with flaring used as a last resort.
Some states are already ahead of the federal curve. In 2014, Colorado became the first state to regulate methane emissions, Wyoming has tough pollution controls in areas of heavy drilling, and North Dakota has reduced flaring, notes the EDF in its report.
Like all methods of energy production, natural gas isn't immune to unpleasant byproducts, and the emission of methane is the most obvious one to be avoided. However with increased regulation and more frequent deployment of technologies that limit natural gas leaks, the industry should be able to nip this problem in the bud. If it doesn't, operators should expect regulations to tighten, and if leaks continue to occur, the reputation of natural gas as a clean fossil fuel alternative will surely be sullied.
By Andrew Topf of Oilprice.com
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