Aerial and satellite imagery can find methane leaks. Will EPA bake the tech into new rules?

Methane emissions are a major driver of climate change, with a short-term global warming impact that’s about 80 times stronger than that of carbon dioxide. In the U.S., about a third of these methane emissions come from the oil and natural gas industries — and many of those leaks can be cost-effectively prevented, if they can be detected.

New aircraft- and satellite-based technologies can dramatically expand the scope of methane-leak detection. Many oil and gas companies are already using them to reduce losses of a moneymaking resource — methane is the chief constituent ingredient of natural gas, after all. And methane is far more harmful to the climate when it’s leaked than when it’s burned to produce electricity, or even when it’s flared as a waste byproduct of oil drilling.

In the next few weeks, the U.S. Environmental Protection Agency is set to release draft rules that will dramatically expand the agency’s role in regulating methane emissions across the oil and gas industry. One big question for industry insiders and climate activists is whether the EPA will build the latest leak-detection technologies into these rules. Will the agency drive the industry to embrace the technologies’ full capabilities? And if it does, how can it avoid costly or confusing requirements that could lead to legal challenges?

The EPA took up these issues at a two-day virtual workshop in August, where independent researchers and oil and gas engineers agreed that a combination of ground- and air-based detection technology can dramatically improve visibility into methane leaks. In some cases, the data they provide can inform mitigation strategies that can quickly earn back their cost by preventing losses of the natural gas these companies make money by selling.

Basing regulations on novel technologies poses risks, however. Regulations must undergo stringent technical vetting, and they’re vulnerable to legal challenges. 

But the methane-detection methods now being used fail to catch anywhere from one-third to one-half of the industry’s total methane emissions, according to the latest data. That means any rules that don’t integrate these new technologies may well miss a golden opportunity to address what scientists say is one of the most effective ways to combat climate change.

“At least in the data we see, traditional technologies might not be enough” to achieve the major methane emission reductions called for by groups like the U.N. Intergovernmental Panel on Climate Change and the International Energy Agency, said Matthew Johnson, an emissions expert and professor at Carleton University in Ottawa, Canada. ​“We’d better be considering multiple technologies to find the one or two that work together,” he said. ​“That’s essential.”

Aerial and satellite systems catch more leaks than ground inspections

EPA’s existing methane rules require periodic inspections by ground crews that travel from site to site, using optical imaging devices to find leaks. Those leaks that exceed certain thresholds must be fixed within specific time periods. The data from these inspections is plugged into estimates that are multiplied across a company’s oil and gas wells, storage tanks, compressor stations and other infrastructure to yield a ​“bottom-up” estimate of its total methane emissions.

But new aerial and satellite methane-detection technologies have shown that these ground-based estimates fail to pick up massive swaths of emissions. The sources being missed range from ​“super-emitters” that spew unabated for days or weeks before they’re discovered and fixed, to thousands of marginal or abandoned wells with slow leaks that together add up to significant emissions.

Intermittent leaks — those that start and stop depending on how oil and gas systems are operated — can also be missed by standard ground-level inspection methods, said David Lyon, senior scientist with the nonprofit Environmental Defense Fund, a key player in the new science of methane detection, in an interview.

An August flyover of the Permian Basin oil field in Texas and New Mexico by Carbon Mapper, a nonprofit that uses NASA-designed technology, found glaring examples of both super-emitters and low-level emitters. These ​“are missed by the traditional approaches,” Lyon said. ​“They don’t fall under any of the categories under the current reporting framework.”

Here’s video of Carbon Mapper’s Permian Basin survey. The methane leaks, which are invisible to the naked eye, appear as black smoke.

Lyon made a presentation during EPA’s August workshop that outlined how building aerial and satellite detection into the agency’s rules could dramatically improve the processes used to find and fix methane leaks. A comprehensive approach would include frequent aerial screenings, on-the-ground follow-up visits, and continuous monitoring and engineering assessments of sites where intermittent leaks spotted from the air were no longer leaking when ground teams arrived, he said.

This graphic from nonprofit research organization RMI illustrates the different levels of monitoring for methane leaks. (Canary Media is an independent affiliate of RMI.) 

Multiple studies over the past half-decade or so have demonstrated the sizable gap between what’s reported to the EPA and what’s actually emitted, said Lara Owens, a manager in RMI’s Climate Intelligence program in the Oil & Gas Solutions Initiative. The emerging consensus is that more must be done, whether that’s more rigorous, continuous monitoring, ​“so every time there’s an emission, it’s recorded and reported,” or better yet, ​“actual measurements,” she said.

The trick is to put these novel technologies to work in ways that can be independently verified by the EPA, watchdog groups such as EDF and RMI, and oil and gas companies ranging from multinational giants to small operators.

“What they tried to do in this EPA workshop is let all these [stakeholders] come to the table and…[describe] the capability that exists with the current methods,” Owens said. ​“For the EPA to come up with intelligent detection and quantification rules, they need a precedent — they need data, and they need information that they can stand behind strongly.”

A win-win for industry and the environment — sometimes

While EPA’s current rules don’t require the use of these aerial-detection technologies, a number of oil and gas companies have used them voluntarily, demonstrating how they perform in the field. In many cases, companies have found that they ​“work really well to reduce emissions and can do so in many instances at a lower cost” than other techniques, said Rosalie Winn, senior attorney with EDF.

That’s what Texas-based oil and gas developer Triple Crown Resources discovered, according to Forrest Johnson, an engineer at the company. At the EPA’s August workshop, he presented a paper he co-wrote entitled ​“Airborne Methane Surveys Pay for Themselves,” describing what Triple Crown found during a project with plane-based detection company Kairos Aerospace.

“We were surprised by the number of leaks we found…and how easy the leaks were to repair,” Johnson said. 

Data from aerial surveys allowed Triple Crown to alter its operations to reduce emissions by 90 percent over the course of just eight months, he said. The surveys cost about $25,000 and resulted in a profit of about $400,000 from natural gas the company was able to prevent from leaking, as the charts below indicate.

“It turned our environmental stewardship team from being a government-mandated team…to being a profit center for our company,” he said. 

Not all oil and gas methane leaks are as lucrative to find and prevent, however. Some oil fields spew methane as an unwanted byproduct, and others lack the infrastructure to bring it to market. Flares used to burn unwanted methane before it’s released into the atmosphere often fail to operate properly, becoming a major source of emissions in their own right.

Neal Dikeman, a partner at venture capital firm Energy Transition Ventures who formerly led Shell’s venture fund in North America, agreed that ​“a substantial amount of emissions from the oil and gas industries can be profitably handled.” The question for EPA is this: ​“Can you design a rule that makes it a slam-dunk to go do the big profitable part, without forcing you to find the last ton where it costs you $1,000 a ton?”

While smaller levels of emissions must be handled at some point, rules that force companies to find and fix minor leaks now could undermine industry support for EPA’s new rules, he said.

“Go after the big ones first and do it in a way that will let the industry make money at it. […] If they can’t make money at it, they have to throw their lobbyists and money into fighting it,” he said.

How will EPA approach new tech for spotting methane leaks? 

EPA’s existing rules on methane emissions from the oil and gas sector, put in place during the Obama administration, require quarterly or twice-yearly ground-level inspections of equipment and facilities built or modified after 2015. The rules are designed around finding and repairing leaks that exceed a certain threshold of methane intensity, and they don’t require measurement of leaks, said EDF’s Winn.

The forthcoming rules will expand the scope to all existing infrastructure and provide ​“a clear path for EPA to adopt additional ground-based monitoring requirements” aimed at discovering and halting more leaks than are found today, she said.

The EPA could also call for use of aerial and satellite monitoring, according to Winn. ​“Providing a really robust pathway for incorporating emerging technologies is one area where there can really be a broad degree of consensus among stakeholders, from environmental groups to operators,” she said.

Still, finding leaks can be complicated, whether you’re using new aerial technologies or more-established ground-based systems. Success can depend on whether an optical detection camera is pointing in the right direction or whether the wind happens to blow a plume across a stationary sensor.

That’s why EDF’s Lyon suggested in August that EPA’s rules for using these technologies should be defined around the function of technologies and the data they yield, rather than the technologies themselves. ​“The oil and gas industry is highly complex, so you can’t have a single solution that’s going to work in all situations,” he said.

Erin Tullos, an environmental scientist and visiting professor at University of Texas at Austin at Texas who’s worked for oil companies ExxonMobil and Phillips 66, made a similar point at the workshop. ​“I think that we have to get comfortable saying we’re going to specify a couple of parameters, and we’re going to leave it to the vendors [of leak-detection technology] to demonstrate they can achieve those parameters, without trying to prescribe specifics for each different type of technology.”

“I know there is some inherent enforceabilty risk in that,” she said. That’s because oil and gas companies would have leeway in how they use and report data gleaned from new leak-detection technologies. ​“However, the value these technologies can bring to the game right now outweigh that risk.”

Howard Dieter, an engineer with Jonah Energy, a natural gas operator in Wyoming, highlighted the complexities and uncertainties around leak detection in his August presentation to the EPA.

Jonah Energy is the first U.S. oil and gas producer to submit methane emissions data to the United Nations-sponsored Oil and Gas Methane Partnership. The company sees the work as important ​“to validate what our calculations are showing but also to give us the ability to measure sources that maybe aren’t reported at the federal or state level,” he said. By using planes, drones, stationary sensors and field crews with optical sensors, Jonah Energy has shown it’s ​“possible to both detect emissions and to calculate a measurement associated with that detection,” he said.

But turning that data into measurements required a lot of work with partners like Project Canary (now International Environmental Standards), one of a number of technology providers working on ways to standardize this data so it can be applied across the industry.

Any methane emissions regulatory regime that seeks to tie enforcement to these still-in-development measurement criteria could run into industry challenges, Dikeman warned. Oil and gas companies are already leery of the costs of complying with the rule the EPA is developing, he said.

Moving from leak detection to measurement creates new challenges

Standards have yet to be developed for how a combination of data points from disparate leak-detection systems could be turned into measurements that a regulator could use to enforce rules — for example, to assess fines based on the amount of methane emitted. It’s unclear whether the EPA intends to include measurement of leaks in its new rules.

But Congress could force the issue. The House version of the $3.5 trillion budget reconciliation bill put forward by Democrats in Congress currently includes a measure that would assess fees of up to $1,600 per ton of methane emissions from oil and gas operations. Senator Sheldon Whitehouse (D-Rhode Island) and others want to include a similar methane fee in the Senate version. The provision doesn’t specify how these measurements would be calculated, but some measurement protocol would have to be devised.

Last month, Citigroup analysts highlighted the wide range of costs such a provision could impose on U.S. oil and gas developers depending on how leaks are measured. Under current EPA reporting rules, the costs could add up to about 1 percent of the industry’s estimated 2023 earnings, the financial giant’s analysts wrote. Using data from satellite-based readings, by contrast, could increase the cost to 8.5 percent of earnings.

Natural-gas trade groups have put their support behind somewhat stricter methane regulations instead of a methane fee, arguing that the latter could push smaller companies out of business and hurt local economies. But it’s an open question whether this industry stance would extend to supporting an EPA methane regulation if it integrated new leak-detection technologies that could start to reveal the true scope of the industry’s climate-heating methane emissions.