MARKETS

Major methane emitters named

ONE of Queensland’s biggest new greenhouse gas emitters, ConocoPhillips, has been fingered in a new report studying methane emissions.

Haydn Black
Major methane emitters named

The Centre for American Progress report says that the co-owner of the Australia Pacific LNG plant on Curtis Island, which has helped contribute to Australian emissions rising by increasing the attractiveness of coal fired power to feed infrastructure in the Queensland gas fields, adding millions of tonnes of CO2 to the atmosphere per annum, is the worst oil field emitter in the US.

The report, The Who’s Who of Methane Pollution in the Onshore Oil and Gas Production Sector, comes after the Obama administration set a goal of reducing methane emissions from the oil and gas sector by 40-45% from 2012 emissions levels by 2025.

Methane is 87 times more potent than carbon dioxide over a 20-year time scale, and the US oil patch was responsible for releasing one third of the US’s emissions in 2014, and leading that list is Conoco Phillips.

The Washington-based think tank analysed 2014 data on methane emissions reported by the oil and gas industry to the Environmental Protection Agency, data which has recently been considered to under-estimate methane emissions.

CAP found that the onshore oil and gas production sector released the equivalent of 48 million tonnes of C02 in 2014, or about the same amount of pollution as 14 coal-fired power plants.

The Queensland CSG plants will emit an estimated 6MMtpa, it has been estimated.

Just 11 companies are responsible for nearly half (49%) of the methane pollution from onshore oil and gas production in the US, the same as seven coal-fired power plants.

One of the worst performing regions is the San Juan Basin in Colorado and New Mexico, which ranked third in overall emissions at 5.2Mmt and ranked highest in per well emissions at 227t per well.

The San Juan Basin, is primarily a natural gas production area from both conventional and unconventional tight sands, CSG, and shale gas. Discovered in the 1920s and the first CSG production began in the 1950s, with a big growth in CSG in the 1990s.

There are currently more than 20,000 oil and gas wells in the San Juan Basin, which the Energy Information Administration had called the second largest gas field in the United States, although drilling in the basin has fallen since 2011.

The flood of Marcellus Shale gas supplies to market over the past few years, which dropped the commodity's price well below the crude oil value slump, led producers in the San Juan Basin away from the gassier part of the play and towards the oil-rich Mancos Shale portion located in the southern end of the basin.

It was suggested that New Mexico has lost more than $50 million in revenue over the past five years due to oil and gas companies wasting natural gas on public lands alone, through a combination of venting, flaring, and leaks.

Following behind ConocoPhillips as the worst emitters are ExxonMobil, Chesapeake Energy, EOG Resources, and BP.

The report found that even though ConocoPhillips reduced its methane pollution between 2013 and 2014, the company still released 4.65MMtpa, 33% more methane than the next-highest-ranking company, ExxonMobil, which is major partner in Australia’s Gorgon LNG project, itself a major new emitter of greenhouse gases, where an innovative carbon capture and storage project is underway.

ExxonMobil is the second largest company by revenue in the US, according to the Fortune 500.

“ConocoPhillips operates every single well that is on or near our ranch. This report is so disturbing for our family—it shows that voluntary efforts are not nearly enough, not by a long shot,” Devil’s Spring Ranch owner Don Schreiber said.

The impact of emissions on human health has been the subject of two reports in the past week from bodies in Colorado and Wyoming, that suggest the impact of exposure to methane and volatile organic compounds from oil and gas wells in proximity to homes may have been under-estimated.

However, the biggest emitters were not necessarily the biggest natural gas producers.

ConocoPhillips was only the sixth largest natural gas producer in 2014, while EOG, which ranked fourth for methane emissions, was the 14th largest natural gas producer that same year.

For companies that reported at least 1000 wells in 2014, the companies with the highest per-well emissions in the onshore oil and gas production sector included Lewis Energy Group, QEP Resources EOG, Samson Energy Company, and EP Energy E&P Company.

The parts of the country experiencing the most methane pollution from onshore oil and gas production include the Anadarko Basin of Colorado, Kansas, Oklahoma, and Texas; the Gulf Coast Basin of Louisiana and Texas; the San Juan Basin; the Permian Basin of New Mexico and Texas; and the Appalachian Basin in the eastern part of the US.

Behind the San Juan Basin experiencing the most methane emissions per well in 2014, were the Arkoma Basin of Arkansas and Oklahoma; the Strawn Basin of Texas; the Green River Basin of Colorado and Wyoming; and Utah’s Uinta Basin.

“The United States has made significant strides in the past decade to cut dangerous air pollution, but methane pollution from the oil and gas industry remains largely unchecked,” CAP director of domestic energy policy Alison Cassady said.

“This report shows that without mandatory limits on methane pollution from all sources in the oil and gas sector, industry will continue to pump millions of metric tons of dangerous methane gas into our atmosphere and our communities.”

Last month, the EPA adopted a rule to cut methane pollution from new and modified oil and gas sources, and the Bureau of Land Management is expected to finalise a rule later this year to cut methane waste on federal and tribal lands.

Alongside methane, oil and gas operations also pollute ozone-forming VOCs and toxic BTEX chemicals such as benzene. The same strategies and technologies that companies deploy to cut methane would have the co-benefit of cutting other dangerous air pollutants, CAP said.

“This report highlights the need for oil and gas companies to continue to make significant cuts in methane waste and pollution,” Health Action New Mexico executive director Barbara Webber said.

Recently the American Lung Association gave Eddy and San Juan counties, the state’s two largest oil and gas producing areas, respectively, a failing grade for ozone pollution in its annual State of the Air report.

The US government’s Clean Power Plan, which Republican nominee Donald Trump is threatening to axe, would require oilers to lift their game and curb the emissions of methane gas from the oil and gas industry using technology, software, and other tools, but there has been pushback from oil and gas companies, who oppose the rules because of the added costs.

There is some support, because the methane released could be captured and used, and there are several companies looking at that option.

The Interior Department said earlier this year that the amount of methane emitted from oil and gas drilling between 2009 and 2014 was enough to power more than five million homes for a year.

Other common methane sources are landfills, coal mining and the agriculture industry.

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