Gas Industry Grapples with Culpability
Oil and gas companies used a major international conference to publicly grapple with their culpability in warming the planet—and suggest they could be part of the solution.
Industry representatives stressed at the triennial World Gas Conference that they understand the gravity of their most significant climate problem—leaks of methane, a potent gas responsible for 25 percent of global greenhouse gas emissions.
The oil and gas industry accounts for at least one-quarter of methane emissions. Companies huddling in Washington this week posited that countries and environmentalists will not consider natural gas a long-term option for powering the globe if the industry doesn’t confront those facts.
“Now we have to shift our focus to talk about attractiveness. The problem is, I don’t think we have a license to tell that story—I think our customers are going to have to,” Greg Guidry, executive vice president of Shell Oil Co.’s upstream Americas unconventionals business, said yesterday on a conference panel. “I don’t think we have the time to build the trust for an incumbent fossil fuel company to tell that story because there’s too much in it for us.”
The conference was the first of its kind since nations signed the Paris climate accord. It comes as the Trump administration has sought to unleash the U.S. bounty of natural gas for economic gain—though with little mention of climate change. Oil and gas companies are also facing a rush of litigation for their role in driving global temperatures higher, though they notched a victory as the conference began when a federal court in California tossed such a lawsuit (Climatewire, June 26).
Politicians and energy executives emphasized what became a common refrain—they want natural gas to shed its reputation as a “bridge” fuel to emissions-free renewable energy.
“People like to refer to it as a transitional fuel. Nope. It’s a foundational fuel,” Energy Secretary Rick Perry said yesterday.
That, though, would require more meaningful steps than the industry has taken to date to stomp out its methane problem. The fuel is 80 times more potent than carbon dioxide over a 20-year time scale. Some studies suggest methane leakage rates of 3 percent from oil and gas operations would erase natural gas’s benefit to reducing climate change relative to coal.
The Trump administration has lifted some rules designed to address methane leaks. Environmental groups said those moves take the industry in the wrong direction, while energy companies said parts of the regulations were burdensome and duplicative.
A study last week by the Environmental Defense Fund and academics showed the industry is underestimating how much methane it puts in the atmosphere. It found oil and gas operations had a methane leak rate of 2.3 percent, compared with EPA’s 1.4 percent figure. Overall, the U.S. industry emits 13 million metric tons of methane gas per year, the study said.
“When you walk around here, what’s the two things that everyone’s saying? ’Well, we’re a clean fuel, a low-carbon fuel, right for the energy future, and we’re an abundant fuel capable of alleviating energy scarcity and energy poverty,’" Mark Brownstein, senior vice president of energy with EDF, said in an interview at the conference. “It’s really hard to sustain those two marketing claims when it could be shown that a significant fraction of the product is escaping into the atmosphere and having a direct impact on global warming and that you’re wasting $30 billion of energy every year. That’s enough energy to electrify Africa two times over.”
Companies have preferred to work through voluntary programs, such as one led by the American Petroleum Institute that will share best practices and technology. Another known as Methane Guiding Principles claims some of the world’s biggest oil and gas companies as signatories. They contend there’s internal motivation to solve the methane issue because whatever they capture is fuel they can sell.
At the same time, energy firms have lobbied against U.S. regulations to slow methane leaks. While bigger firms, like BP PLC and Exxon Mobil Corp., have set targets for reducing methane emissions, what data they will share is unclear. Some energy companies refrain from joining even voluntary programs because they say they’re unnecessary—that’s how ConocoPhillips CEO Ryan Lance on Tuesday explained his firm’s absence from the Methane Guiding Principles.
Bernard Looney, chief executive of BP’s upstream sector, called for an open industry discussion about methane.
“Gas will not win the argument it needs to win if we don’t all put methane on the table,” Looney said on the panel yesterday. “This is not something we can push away or hide from.”
Brownstein of EDF said more data are part of the solution. His group hopes to launch a satellite by 2021 that will measure 80 percent of global oil and gas production. That will help get a handle on infrequent, but significant, leaks that constitute a bulk of methane emissions.
Shell’s Guidry advocated for a voluntary action approach combined with policy, though he wasn’t specific about what that meant. He said Obama administration EPA regulations for reducing methane emissions were “hitting a lot of the right elements” but that they required unnecessary reporting. He said energy companies, through API, are working with EPA on a replacement rule.
Energy companies must get beyond the reflexive rejection of regulation to maintain their credibility as entities seeking solutions to climate change, said Pratima Rangarajan, CEO of the Oil and Gas Climate Initiative.
“Time is really our biggest challenge at this point. I don’t think this is an innovation problem,” she said on a panel. “The real problem is what drives markets and what drives people to do this. What really drives markets in the energy sector is policy and regulations.”
Reprinted from Climatewire with permission from E&E News. E&E provides daily coverage of essential energy and environmental news at www.eenews.net.