Oil and gas emissions could be more concerning amid global COVID-19 pandemic
Environmentalists continued to voice anxiety about air pollution in the Permian Basin as a result of extraction activities, even as the global energy market struggled and production decreased.
The Environmental Defense Fund (EDF) released its initial findings of a basin-wide study on the emission of methane and other volatile organic compounds Tuesday, aiming to track the ongoing release of the dangerous gas into the air.
The report found that methane escapes from extraction facilities in the Permian at a rate three times what was reported nationally by the federal Environmental Protection Agency (EPA).
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Meanwhile, the EDF estimated a leak rate of about 3.5 percent, about 15 times higher than the goal of 0.25 percent set by the Oil and Gas Climate Initiative, a national coalition of oil and as companies formed to address climate issues in the industry.
That rate reported by the EDF represented 1.4 million tonnes of wasted gas each year, read an EDF news release, which could meet the needs of every home in Dallas and Houston combined.
Overall, the EDF estimated methane emissions cost New Mexico taxpayers up to $43 million in revenue per year.
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Some wells were reported as releasing methane through leaks, venting and flaring at more than 100 times the national average, the release read.
The problem could get worse as operations are curbed while the price of oil dropped to about $25 per barrel this month, in response to weakening demand amid the COVID-19 pandemic and a global oversupply fueled by a price war between Russia and Saudi Arabia.
A March report from the International Energy Agency (IEA) cautioned that a drop in revenue could lead to oil and gas companies cutting staff and thus oversight, putting less emphasis on environmental safeguards and reducing emissions.
“For example, a decline in revenues from oil and gas operations could mean that companies pay less attention to efforts to tackle methane emissions,” the IEA report read. “Low natural gas prices may lead to increases in flaring or venting, and regulatory oversight of oil and gas operations could be scaled back.”
Matt Watson, the EDF Vice President for Energy said the data already showed oil and gas operators are “failing” to protect the environment and population in the Permian from the dangers of air pollution.
“Oil and gas companies have a core responsibility to protect health, safety and the environment. This data shows that operators in Permian are failing to meet that basic obligation,” he said.
“As company staffing and state oversight are stretched thin, it’s all the more crucial to maintain close watch on these emissions so leaks don’t go unnoticed or unrepaired.”
John Goldstein, director of regulatory and legislative affairs at the EDF said the market’s downturn could cause companies to ignore environmental safety standards, but he argued the dangers caused by the pandemic meant environmental regulations were even more essential.
“This low-price environment could mean some less-scrupulous oil and gas operators could be looking to cut corners,” he said. “This is a public health crisis. That means pollutions like ozone is even more important. It’s important to protect community health as much as possible right now.
Emissions and COVID-19 pandemic
Data for the recent EDF study, known at the PermianMAP, was gathered between October 2019 and March 2020, across a 10,000 square-kilometer region in the western area of the Permian known as the Delaware Basin and stretching across the New Mexico-Texas state line.
The Delaware was estimated to provide up to 40 percent of Permian Basin oil and gas production.
Readings for the study were taken from the air via helicopter during 100-day flights covering clusters of facilities two or three times, said EDF scientist David Lyon.
On the ground, vans were deployed to specific facilities to measure on-site emissions of methane and other VOCs.
Five towers were constructed for the study throughout the Permian, including at Carlsbad Caverns to take, to continuously monitor the air and update the map.
“Sometimes, you’ll have sites with zero emissions, so they can be good,” Lyons said. “You can also have very high emissions.”
The interactive map produced with the study showed aerial surveys in numerous areas near the Eddy-Lea county line and border to Texas with wells showing methane emission rates as high as 624 kilograms per hour (kg/hr) and as low as 3 kg/hr.
Five areas on the New Mexico side registered 0 kg/hr, with six in Texas.
Permian Basin flaring has been on the decline in recent months, per a study from Rystad Energy.
Gas flaring, a method of burning off natural gas such as methane often at the completion of a well or for safety to reduce pressure at a drilling rig, fell to about 700 million cubic feet per day (cf/d) during the first quarter of 2020, per the Rystad study, marking a decline from about 750 million cf/d in fourth quarter 2019 and almost 900 million cf/d in third quarter 2019.
“Such a low level of flaring has not been seen in the Permian since 2012, said Artem Abramov, Rystad head of shale research.
“While the downturn introduces severe challenges for the overall economics of Permian producers, achieving outstanding emissions targets is at least one bright spot.”
State of New Mexico, oil and gas industry aim for solutions
Goldstein worried that reductions in flaring might not be a viable solution to cut all emissions, as producers look to save money by not only drilling less but also ignoring proposals such as quarterly leak inspections.
“Flaring is going down, which makes sense as people are drilling and producing less, but I don’t think that correlates with methane emissions,” he said. “Producers are going to be doing whatever they can to cut corners and things get missed.”
Last year, the New Mexico Oil and Gas Association releases its Methane Mitigation Roadmap, which suggested annual leak inspections to cut methane emissions by about 16 percent.
Robert McEntyre, spokesman for the New Mexico Oil and Gas Association (NMOGA) said the Roadmap identified several strategies for reducing emissions, such as increased inspections and the use of more carbon capture technology.
"New Mexico’s oil and natural gas producers are continuously working to protect our environment and reduce methane emissions, even amid record-breaking production," McEntyre said.
"NMOGA and our members have identified and recommended strategies to reduce emissions in our Methane Mitigation Roadmap, and we are actively working with regulators and other stakeholders to achieve further reductions without placing limits on New Mexico’s economic growth."
The EDF’s suggested quarterly inspections, Goldstein said, would curb emissions by 60 percent.
“These methane requirements are extremely cost-effective,” he said. “You could get methane cut with very little impact even with these lower prices.”
He also argued capturing more methane would equal more revenue for the state and taxpayers.
“The methane is revenue for the state. Releasing it is robbing New Mexicans. They (industry) need to invest so that we can keep the folks of Eddy and Lea county safe and not have unduly exposed to pollution.”
Last year, New Mexico Gov. Michelle Lujan Grisham began developing policy to cut greenhouse gases, including methane, by 45 percent by 2030.
"We cannot ignore it. Neither can we bring to bear anything less than our full strength, our complete capacity for innovation, vision, and execution," Lujan Grisham said in a statement. "We will rise to the challenge of climate change as New Mexicans rise to every challenge — together, with our neighbors by our side."
In Texas, a group of industry trade groups and oil and gas companies formed last month to seek market-drive solutions to curb methane emissions in the Permian and other basin in the Lone Star State.
The Texas Methane and Flaring Coalition planned to develop recommendations to reduce flaring and other emissions throughout the industry.
The group will work to improve data quality and reporting of gas volumes vented or flared, along with defining when flaring is needed and when it is not, and find best practices to reduce emissions, read a news release from the coalition.
“While the Texas oil and natural gas industry is a global leader in the responsible production of energy that has powered life for more than a century, the industry is always proactively innovating,” the release read. “To that end, Texas operators are committed to improving environmental performance.”
Adrian Hedden can be reached at 575-628-5516, email@example.com or @AdrianHedden on Twitter.