Clearing the Air, and Making Clear More is Needed to Control Methane Leakage from Natural Gas

WRI released a new report today called Clearing the Air: Reducing Upstream Greenhouse Gas Emissions From U.S. Natural Gas Systems. Its conclusions, which echo many of ours from our Leaking Profits report, find that methane emissions from natural gas systems are significant (contributing three to four percent of all U.S. greenhouse gas emissions), and reducing these emissions is imperative to achieving climate benefits vis-à-vis other fossil fuels. While recently finalized EPA standards will help achieve some of these reductions, further action from EPA and states is needed to definitively ensure climate advantages from natural gas.

Methane is a potent greenhouse gas, at least 25 times more potent than carbon dioxide from a global-warming standpoint. As a result, even seemingly small leakage of methane into the atmosphere can have significant climate consequences. Reducing methane emissions clearly makes climate sense. But it also makes business sense. Methane constitutes approximately 90 percent of natural gas, so allowing methane to leak is no different from letting money evaporate into thin air. As our Leaking Profits report demonstrated, many successful methane control technologies are sound commercial investments, with payback periods of typically a few months to under three years.

According to lifecycle assessments and the best assessment of available data (which certainly has its shortcomings in this space), Clearing the Air suggests that methane emissions from upstream natural gas activities (i.e., during production and processing) are roughly equivalent between shale and conventional sources of gas, although their breakdowns can differ. Notwithstanding, I should say that with better data, I would not be surprised to learn that shale operations generate more emissions if conducted improperly. In fact, there have been localized reports from Colorado and Utah that emissions from shale operations could be quite high (higher than 4 percent of total production). Once the gas enters the pipelines, however, methane emissions from shale and conventional sources of gas are nearly identical. But that’s not to say that leakage from the transport and distribution of natural gas is low – again, localized reports from Boston and Manhattan suggest that leakage could be unacceptably high. But putting aside these localized reports for right now, and using the best available comprehensive data, the overall leakage rate is estimated to be a little under three percent of total production.

We cannot be complacent about this apparently low number. Due to its climate-warming potency, the use of methane for power production creates an advantage over coal only when leakage rates are clearly below three percent. When emissions are between three percent and around seven-eight percent, natural gas does not have an advantage over coal in the near-term (from a global-warming perspective); this is because methane leakage has more deleterious effects in the nearer term. When emissions exceed seven-eight percent, natural gas has no climate-warming advantage over coal at any time. When using these fossil fuels for thermal use (e.g., heating water in a factory) natural gas squanders its advantage over coal at even lower methane leakage levels.

Therefore, it is abundantly clear that to generate meaningful climate benefits from using natural gas, the methane leakage must be as low as possible. A leakage rate of well under one percent is a reasonable benchmark from an industry-wide feasibility standpoint. Even that is not a clean bill of health, but it may be acceptable. And as Clearing the Air points out, achieving that benchmark also allows climate benefits from using natural gas rather than diesel in heavy-duty vehicles like buses and long-haul trucks.

So, what’s being done about reducing methane leakage? The EPA recently finalized standards for natural gas operations that would begin to control these emissions. Clearing the Air estimates that these EPA standards (“NSPS”, in figure below) would reduce methane emissions by about 13 percent in 2015 and 25 percent in 2035. As these standards focus mainly on new equipment used in shale operations, these standards will have increasing impact over time as shale sources comprise a larger fraction of total natural gas supply, and as old equipment is replaced by new.

Clearing the Air estimates that three additional technologies could reduce the leakage rate to just above 1 percent (purple line in figure below).Those three technologies are: a) the use of plunger lift systems during liquids unloading operations (essentially, an alternative means to clean out liquids clogging up a well); b) leak monitoring and repair at new and existing well sites, processing plants, and compressor stations; and c) replacing existing leaky pneumatic devices with low-leakage equivalents, industry-wide. Through the adoption of five additional abatement measures that each address smaller emissions sources, the less-than-one percent benchmark would be readily achieved (green line, in figure below).