UT-Austin's Melinda Taylor and Environmental Defense Fund's Elizabeth Lieberknecht join Robert Rapier this week to talk about the Methane Emissions Reduction Program and what that means to Texas.
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(00:00):
Welcome to the nationally syndicated Energy Mixradio show produced by the Energy Network Media
Group. The Energy Mixed Radio showwill give you an inside look at the
energy industry and how it affects youby talking with industry leaders, experts,
and government officials on the Energy MixRadio Show. Hi, I'm Robert Raypier,
editor in chief of Shale Magazine.Welcome to the Energy Mix. This
(00:22):
week, we're joined by two expertswho will discuss efforts to reduce methane emissions
from oil and gas operations. Forcontext, The Biden administration recently unveiled an
eight hundred and fifty million dollars grantprogram as part of the Methane Emissions Reduction
Program, which is included in theInflation Reduction Act. This funding is specifically
targeted at reducing measuring and monitoring methaneemissions across the country. The initiative is
(00:46):
particularly relevant to Texas, where itwill support projects led by state agencies,
communities, and industry to comply withthe new EPA Methane Rule and waste emissions
Charge. Notably, they smaller operatorsand texts stand again significantly from this funding,
as it will enable them to replaceoutdated equipment, adopt advanced mitigation technologies,
(01:07):
and improve the accuracy of methane measurement. To help us understand the implications
of this funding and its potential impacton both the energy sector and climate efforts,
we have with us today two experts. Melinda Taylor from u T Austin
is leading a project focused on missionproductions in the Permian Basin. Elizabeth Lieberneckt
is a regulatory and legislative manager withthe methane sector of the Environmental Defense Fund.
(01:33):
They'll provide their insights on methane andmissions production efforts in Texas and beyond.
Welcome to the show, Melenda Analysa. In the first segment, I
like to start out by having youtell listeners a bit about yourself, your
background, and what your organizations do. Sure, thanks Robert, and thanks
very much for the opportunity to behere. My name is Melinda Taylor.
(01:53):
I'm on the faculty of the Universityof Texas School of Law and teach.
As a member of the faculty,I teach environmental law classes and energy law
classes, and I also do quitea bit of research and work on collaborative
initiatives with other parts of the University, people from our engineering departments, geosciences,
(02:14):
business school, etc. The projectthat you referred to is one that
I've been engaged in with the numberof colleagues from the Engineering school, but
also with some key oil and gasstakeholders, some independent trade associations such as
the Texas Independent Producers and Royalty OwnersAssociation, the Independent Patrolling Association of America,
(02:38):
and Permium Basin Patrollum Association, andwe've been discussing, having discussions for
a year and a half or soabout how small oil and gas operators might
take some very practical steps to reducetheir methane initisions, which is going to
be the topic of our discussion too, lim So I can share some of
(02:59):
what we've been discussed discussing as weget into this rot having me. I'm
Elizabeth Liebernet. I'm the regulatory andLegislative Affairs Manager and Environmental Defense Funds Methane
Program for the Mid Continent. EnvironmentalDefense Fund is an international nonprofit creating transformative
solutions to our most serious environmental problemsthrough research and advocacy. We've been driving
(03:21):
global action to cut methane pollution forover a decade and we're really excited to
join you all the day to talkabout this funding opportunity and you know the
solutions that can unlock for operators inTexas and beyond. Thank you. So,
can you tell lists why are methaneemissions an issue? For sure?
(03:42):
For a few reasons. I mean, one is the climate. Methane is
a short term climate pollutant. Ithas over eighty times the warming power of
carbon dioxide in the first twenty yearsafter it reaches the atmosphere. And it's
also in oil and gas operations coitedwith other health harming pollution like benzene and
(04:02):
hydrogen sulfide and smog forming bocs.And then methane is also the primary component
of natural gas. So when methaneescapes during the production and transportation process,
and that's the waste of an energyresource. So reducing energy waste through methane
(04:24):
leaks and flaring can increase our energysecurity, improve the efficiency of our of
our energy production systems. So whatare the primary sources methane emissions in the
oil and gas checktor? Where arethese methane emissions coming from and how significant
are they compared to other industries?You know, they come really from many
(04:46):
sources throughout the industry, so kindof broadly speaking, kind of at the
production site, what you would kindof a kind of general way to categorize
methane emissions are through vents, flaring, and weeks. So venting emissions are
you know, direct releases into theatmosphere. They're usually kind of by design,
kind of part of the process,intentional, so you know, things
(05:12):
like controllers that you know, ourwork through the release of natural gas for
example, that's vented methane. Flaringcan also be a source of methane emissions.
The point of a flare is tocombust natural gas at a site that
doesn't have someplace else to go orand maybe limited safety situations. But when
(05:32):
that gas is sent through a flarecombustion device, if it's even if it's
operating, you know, pretty efficiently, there's still a little bit of methane
release as that gas is being convertedinto carbon dioxide and other products of combustion.
But when those flares don't operate properly, when they're unlit or they're malfunctioning,
they can they can be a sourceof vented methaneisions as well. And
(05:56):
we've found through research in places likethe Permian Basin that it's pretty regular for
flares to malfunction and bmlets, somethane emissions from from flaring can can be
up to five times more than EPAactually estimates. And then that kind of
third general category are from leaks orsometimes called fugitive emissions. So these are
emissions and you know throughout a productionsite and transmission as well, where you
(06:17):
know, you're not really expecting orplanning for those leaks to happen, but
they kind of they escape, theyleak out, and that can be you
know, either because something's not workingproperly or because you know, a piece
of equipment needs maintenance. So theycan come you know, from from whaleheads
and and takes and pipelines kind ofthroughout the couple of segments of the industry.
(06:42):
So how does how sim gearly comparedto other industries? What are the
trends like globally with methane emissions oiland gas, well, methane, there
are definitely different sources of methane emissions, and the oil and gas sector is
the largest industrial source of methane emissionsin Oka. You know, other significant
sources include sources from agriculture, wastemanagement like landfills. But oil and gas
(07:11):
is the country's largest industrial source ofmathea emissions. Okay, and how's that
trended during the shale boom? Isthat definitely? I mean, you definitely
see a rise attributed to the shalebone that started in you know, about
two thousand and five. Well,you know, it's interesting that, yes,
and you know, one of thekind of challenges I think we're going
(07:31):
to kind of talk about it,but you know, one of the areas
that we've just seen a lot ofgrowth in the last you know, ten
to fifteen years in the space areour detection and monitoring technology. So you
know, we are kind of,you know, moving from a place where
we didn't have a lot of greatinformation about the amount of methane emissions escaping
during the oil and gas production anddelivery process. But you know, now
(07:54):
we're we're getting better and better dataand so we're getting a better handle on
mathe the emissions from the sector.But we do know that through research that
you know, even when you're lookingat reported data that BPA has, you
know, studies have shown that theactual emissions from the sector are higher than
what's reported. To EPA. Okay, So, and that leads right into
(08:15):
the next question, and can youexplain how methane is detected and measured in
all the gas operations and how effectiveare these methods? Sure? Excuse me,
this is Melinda, I'm going totake that one. So generally we
talk about measurement and detection methods intobroad categories, sort of so called top
down assessments, which are measurements thatare taken by satellites. There is a
(08:41):
kind of growing number of satellites thatare becoming more and more accurate with more
finer resolution to detect methane leaks inthe oil field. Also aircraft that lie
with cameras and detection devices to measuremethane concentrations in the atmosphere and detect leaks
(09:03):
across sort of general regions. Thereare also some towers that have monitoring equipment
in place that again detect methane concentrations. And then there's so called bottoms up
methods of detecting methane. So thoseare things like drones that can be used
to look at individual sites, facilitiesout in the oil patch, or pipelines,
(09:26):
that sort of thing. Stationary monitorsthat are set up sometimes at the
fence line to detect methane emissions againfrom either an individual site or group of
sites. And then there are thingslike optical gas imaging cameras OGI cameras that
can be used to detect again methaneleaks at an individual site. So some
(09:50):
operators, especially larger operators, areusing OGI cameras to walk around a site
and detect potential leaks multy equipment that'scausing emissions at that facility. In terms
of how accurate they are, they'rethey're getting more and more accurate. The
latest satellites are able to detect evenat a facility level where there's a problem
(10:16):
there. You know, it's ait's a field of research certainly, and
part of the funding that's been providedthrough the Inflatial Reduction Act is going to
be dedicated to measurement and monitoring ofemissions. And I think the goal there
of the administration and of the folksthat are participating in the project is to
fine tune those measurements and UH monitoringmethods even further. But there's a lot
(10:41):
of good technology available right now tofor leads and detect them. Do you
do you have comprehensive. I guessis the is the monitoring. Can you
look at what's being detected and say, yeah, that kind of correlates what
we're seeing on the atmosphere, oror there's still a lot of holes in
the ability to detect what's there.Uh. You know, that's a really
(11:01):
good question, and I know thatsome industry folks especially are uncomfortable when that
bottoms up monitoring that I talked about. Where leaks are detected, there are
estimates of emissions from a particular sitethat are done by using these things called
(11:22):
emissions factors that the Environmental Protection Agencyhas developed that basically make assumptions about given
the rate of emissions from a leakand the fact that a leak is occurring
at a particular type of equipment,there's there are emissions factors or multipliers that
are used to estimate what the totalemissions from that piece of equipment are.
(11:46):
And some of the industry are notcomfortable with those emissions factors. So clearly
that's an area where additional real time, real measured data will ultimately, I
think be important for everybody to besatisfied. Okay, so we need to
take a quick commercial break rap thereand then after the break, I want
to dig deeper into the current andexpected future regulatory landscape. Okay, I'm
(12:11):
Robert Rapier on the energy backs.We'll be right back. Join us in
Corpus Christy on Wednesday, August fourteenthat eleven am for the twenty twenty four
Coastal Band Energy Transition Luncheon at theOrt Center on Harbor Drive in Corpus Christi.
This year's keynote speaker will be NickBurillo, the executive director of the
Center for Hydrogen Safety. Topics tobe covered include carbon capture, assessing and
(12:35):
managing safety risk in the hydrogen valuechain, and the emerging hydrogen economy in
the coastal Bend. That's Wednesday,August fourteenth, starting at eleven am in
Corpus Christi or the twenty twenty fourCoastal Band Energy Transition Luncheon. Poor tickets
and sponsorship opportunities go to Shale magdot com Slash Event Slash twenty twenty four
(12:56):
Dash Energy Dash Transition DASH Luncheon.Welcome back to the Energy Mix. I'm
Robert ray Pere with this week's guestMelinda Taylor and Elizabeth Liebernet. This week
we've been doing a deep dive intothe world of methane emissions in the oil
and gas industry. So what arethe biggest challenges we face and reduceing emissions
(13:18):
and the oil and gas sick.Yeah, this is a little bit.
I think, you know, onehistoric kind of challenge and one that we're
still you know, working through,is that methane is an odorless, colorless
gas, so you can't see itunless you have the right tools to look
for it. So, you know, for a long time and you know,
we didn EDF did a lot ofresearch to kind of you know,
(13:39):
help make methane emissions visible and toraise awareness of the impacts both to public
health and climate and to royalty ownersand tax payers from that lost product.
And so I think, you knowthat's you know, our understanding of the
of of the threat that methane posesand the data that we have about how
(14:01):
much is being emitted is improving alot. And you know, part of
I think the ongoing challenge is justensuring that you know, operators know,
you know that they do have mathaneemissions and where they're coming from, and
equipping them with you know, theright tools to find those leaks. And
(14:22):
fix them, because we do knowthat you know, a lot of a
lot of emissions from oil and gassector can be fixed cost effectively and with
pretty pretty minimal and you know,upgrades or repairs, not to say all
of them, but so I think, you know, kind of pivoting back
to the funding, you know,that's going to be a really you know,
exciting opportunity to help kind of oversome come some of those challenges.
(14:43):
It is just to increase awareness andeducation and provide operators with the actual tools
to to find those leaks and fixthem. Yeah, if I could just
add a little bit to that too, Robert, this is Melendos, So
well, what's interesting to keep inmind here is that the largest oil and
(15:03):
gas companies, the international operators andnational oil companies around the world have made
tremendous strides in identifying the sources ofmethane emissions at their operations and addressing those.
We saw some of that in lastyear at the end of the year
at the UN Conference on Climate thatthe top twenty eight operations, which was
(15:26):
in Dubai, fifty of the largestboil and gas companies in the world pledged
to reduce their methane emissions to nearzero into end routine flaring by twenty thirty.
So the large companies have been workingon this for a long time,
and they've figured out ways to captureemissions of methane and reduce those emissions and
(15:48):
turn those into product make sure theydon't lose money from those emissions. The
challenge, I think is really inthe space of the smaller operators that don't
have the sort of research in thecapital budgets that those large companies have,
and that have not been subject tothe same sort of regulatory and kind of
(16:11):
pr scrutiny that a lot of thelarger companies have been subject to. So
that's why I think this IRA fundingis so important because it really gives all
of us who care about this issuean opportunity to really help those smaller operators
financially and with some training and technicalassistance to get on an even playing field
(16:32):
with the larger companies. But it'sgoing to be a challenge, well how
does the regulatory landscape impact that,How does that affect the contribution meth dynamissions
attabit I can kind of lay outsome thoughts on that, and you know,
we you know, regulations are reallyimportant to ensure that there's you know,
a level playing field, that thereare kind of broad, common sense
(16:55):
and consistent standards that that all operatorscomply with. And and so we need
the regulations as a tool because,you know, kind of building out what
Melinda said, you know, voluntaryactions are not enough. They won't get
us where we need to be interms of how much we need to reduce
our about the emissions. And soyou know, regulations have have that benefit.
(17:18):
And you know what's kind of excitingabout this funding in this program is
that you know there are there arecompliments to the regulations to try to help
you know, operators come into complianceand to improve our understanding of you know,
what the emissions are and how they'rechanging over time, and to kind
of build on and and ease compliants. But the regulations down the line,
(17:41):
so are these state by state thestates different states have different regulations or their
national overarching regulations. Yeah, Ican start and then welcome your Oh okay,
so you know, yes, bothyou know, there are have been
state by state approaches so historically andthen the federal government weld the reference the
(18:03):
Environmental Protection Agency earlier, so that'skind of the lead regulator here on on
air quality standards. In places wherethere's more development on public land, there
are other agencies involved, but youknow, for purposes of talking about Texas,
although you know, places like youknow, Oklahoma or New Mexico there's
more public land. But and youknow, the EPA also regulates methane,
and and what you know, kindof their latest action on regulating methane was
(18:27):
the finalization of some standards in announcedin December but finalized in March that control
embissions from both new and existing sources. So what's going to happen now.
We can get into those standards alittle bit later if you want, But
for the for the existing sources,kind of the older sources, the states
(18:49):
will be responsible and have the opportunityto develop state programs to implement those standards.
So those rules aren't immediately effective forexisting sources, but there will be
state programs. States who to developplans will develop state programs to implement the
standards that EPAS set to control thispollution. Okay, we've got less than
a minute left in this segment.I've got a question thanks going to take
(19:10):
longer than that to answer, andso I'm going to push that until after
the break, and that's about therecent Supreme Court ruling on Chevron deference.
But I want her to point outthe latest funding announcement builds apart previous three
hundred and fifty million dollars funding roundand Texas received one hundred and thirty four
million dollars for reducing emissions. Afterthe break, I wanted to ask you
whether there are any significant achievements sofar in the previous funding. So with
(19:36):
that, let's take a quick break, and then we'll get into a few
more regulatory questions, particularly the importantChevron deference ruling from the Supreme Court Robert
Rapier on the energy in decks,we'll be right back at the port of
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Welcome back to the Energy Mix.I'm Robert rape Pierre with this week's
(21:23):
guests, Melinda Taylor and Elizabeth lieberneckSo I previously for the break I mentioned
previous funding and how that has gone. So have there been any specific achievements
so far with the previous funding that'sbeen announced. Yeah, so this is
Melinda. You're absolutely right, Robertthat last year EPA announced that TCQ would
(21:47):
be receiving a significant amount of money, I think at the one hundred and
thirty four million to help address methaneemissions from marginal wells. The actual money,
we understand, was just received acouple of months ago, and the
agency is still in the process ofsetting up that program. I assume that
they will coordinate with the Texas RailroadCommission, which overseas oil and gas development
(22:08):
in Texas. But as far asI know in Elizabeth, you may have
other information, but as far asI know, that program is you know,
under development, let's say, butthe agency is moving forward. There's
also another source of funding that camefrom the Bipartisan Infrastructure Bill that the Texas
Railroad Commission achieved a significant or obtaineda significant amount of funding to plug orphan
(22:33):
wells, and that money was receivedabout a year ago. And our understanding
is the Railroad Commission has already madetremendous progress in kind of identifying and prioritizing
those abandoned wells orphan wells that itintends to use that federal funding to address
to make sure they're properly plugged.So there's been quite quite a bit of
(22:56):
funding so far from common ashev Irathe Inflation Reduction Act in the Infrastructure Bill
coming to Texas to address emissions fromthe oil and gas sector. Okay,
let's talk about a very important issue, and that is the recent Supreme Court
ruling, the overturn of the socalled Chevron difference truling. I've read a
lot of regulatory agencies that are veryalarmed by this ruling. Can you speak
(23:19):
to the implications and whether you expectthat to have an impact on the ability
to regulate methane emissions. Yeah.So the case that was decided by the
Supreme Court in the opinion was handeddown last Friday, on the last or
maybe it was on Monday, wasthe last day of the court's term.
As you said, Robert, itdid overturn, formerly overturn what was called
the Chevron doctrine, and simply put, that was just a concept used in
(23:45):
the judicial review of agency regulations wherebythe courts. The Supreme Court back in
nineteen eighty four, and the Chevroncase had said that courts should defer to
an expert administrative agency like the EPAor Department of Energy when that agency was
(24:06):
interpreting the law that it operates underand promulgating a regulation. It can get
complicated fast. But basically the doctrinewas that courts should be very reluctant to
interfere in second guests what the agencyhad to say about its legal authority.
The reality is, though, thatthe Court has not cited the Spring Court
(24:27):
has not cited Chevron since twenty sixteen. For all intents and purposes, the
Court has been sort of backing awayfrom the Chevron doctrine for a number of
years, and this Court has articulatedseveral other principles that indicate that it's not
very likely to defer to expert agencieswhen it comes to these regulations, at
(24:52):
least on the legal side. Ithink it's really too early to know whether
overturning Chevron in this lower decision isgoing to have a big impact on how
the Court will ultimately look at thesenew methane rags. As you probably know
that a number of states, Republicanled states filed a lawsuit back in April
(25:15):
challenging these methane regulations and that casesin the DC Circuit the Appellate Court,
and I understand briefing is underway,but the court hasn't heard that yet.
But anyway, my bottom line is, I think it's too early to know
whether or not this new local decisionis going to have a major impact.
I do know that the Biden administrationwas fully aware that the lower that this
(25:38):
challenge as Chevron was coming and triedto tried to craft the regulation in a
way that made sure it would beconsistent with the Cleaner Act and the authorizations
that the Agency has under the CleanerAct to regulate methane and other greenhouse gases.
Okay, thank you, that's veryhelpful. We're going to take a
quick break right there, and thenafter the I want to get into how
(26:00):
technology is helping in a spot toreduced mathane emissions. I've Robert Rappier on
the energey things. We'll be rightback. Any business can benefit from advertising
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Pick up the phone today and calltwo ten two four oh seven one
eighty eight again two ten, twofour oh seventy one eighty eight. Welcome
back to the Energy Mix. I'mRobert ray Pier with this week's guest Melinda
Taylor and Elizabeth Leeberneck. I'd liketo talk about technology a little bit.
(27:30):
What new technology to innovations are emergingin the field of methane and mission reduction.
Can you give you examples of anyof that have shown promise? Sure.
I think one way to look atthis is to look at this funding
opportunity. And one thing that EPAis doing is dedicating to one hundred and
fifty million dollars to accelerate the developmentof new technologies to reduce methane emissions through
(27:52):
the sector. So they're going tobe looking at accelerating the development of technologies
to reduce methane emissions and slip atcompressors stations for example, like along a
transmission system. So that's kind ofa pretty high emitting source and one where
you know, there's kind of developingsolutions to try to figure out how to
tackle another. Another area that EUPAand DUE you are looking to fund are
(28:17):
new technologies to prevent the need toflare gas, especially at those oil wells
that are producing associated gas. That'sa huge waste of energy resources and a
lot of solution coming from that practice. So there's a you know, this
is a really rapidly growing field andthe mitigation solutions, the monitoring solutions,
and that's one where this funding isgoing to go to support, you know,
(28:40):
kind of the accelerate the deployment ofthose kind of emerging technologies to reduce
gas flaring at well sites. Andthen the kind of the third category under
that one hundred and fifty million dollarbucket of funding is additional new technologies to
improve emissions at well sites, soyou know, different technologies to reduce emissions
when operators are doing you know,cleaning out liquids from their wells, kind
(29:04):
of liquids unloading, or new technologiesto reduce emissions from tanks or you know,
I talked earlier about process controllers.That's another big component of methane emissions
of production sites. So they're lookingto accelerate the deployment of new solutions to
do process controllers at a place,or electrified process controllers at sites that don't
(29:29):
have electricity, things like that.If I could just add a little bit,
though, I think one thing tobear in mind when it comes to
methane is that huge fraction of theoverall methane emissions from oil and gas are
pretty easy to address with existing technologies. So the International Energy Agency, for
example, estimated that the industry globally, and this would certainly be true in
(29:52):
Texas. Could achieve a seventy fivepercent reduction from current emissions rates just using
existing technology. Because remember a lotof the leaks are coming from things like
valves that need to be tightened onpipes or tank beef hatches on tanks that
have where the seal perhaps has degradedover time, and so it's leaking methane
(30:15):
from the tank. So there arelots and lots of steps that can be
taken that are not high tech andthat are not super expensive, but it's
a matter of getting the information outinto the field and in some cases providing
some financial assistance to operators who justdo not have it in their operating budgets
to upgrade pieces of equipment that needto be upgraded. Yeah, I mean,
(30:38):
that's consistent on my experience in oiland gas that most of the methane
emissions that go untreated we just don'tknow about them. We don't realize that
methane is leaking here or there.But technology is improving. You mentioned satellites
earlier. How do the use ofdrones and satellites compare to traditional methods,
and yeah, Elizbeth, you youprobably want to add to this as well,
(31:00):
because the EDIP actually has launched througha subsidiary, its own satellite.
That's made a kind of a bigsplash in the industry. But what the
satellites and drones give us a pictureof that we didn't have previously is especially
those large sources, those so calledsuper emitters, so facilities, whether it's
(31:22):
a tank that has a rupture andis just emitting a really significant amount of
methane from that rupture or pipeline,things that wouldn't have necessarily been detected or
at least not as quickly as theycan be with that sort of aerial surveillance
and satellite imagery, because those thecameras that are used in those types of
(31:48):
reconnaissance are really accurate and give usa great great amount of information about those
types of sources. We know thatthose super emitters, whether they're upset events
or these you know, really significantequipment failures, are responsible for a lot
of the overall meth thing that's comingfrom the oil field. So it's the
better the technology to detect those sortsof events and leaks, the better off
(32:13):
we are because those can be addressed, and the other sources, you know,
are just not as significant compared tothose huge emission events. Well you
may not know the answer to this, but it's generated a question in my
mind. How how much resolution doyou have on satellite? I mean,
I don't know how that works exactly. Are you able to zone in on
a particular site. If you've gottwo sites next each other, do you
(32:35):
have the resolution to cite this iswhere the methane is coming from. I
just don't know how much the satellitecan zone in. They're different. There's
an ecosystem of satellites, and sosome of them are kind of you know,
and heard people describe them as kindof like thinking about camera angles,
you know, kind of like afocused lens where you're zooming in on something.
And some you know, some operatorsare already deploying those technologies to help
(32:55):
them identify big leaks, you know, and really there's been a lot of
success, you know, getting likeMelinda saying, kind of screening and then
like if you know, you requirea follow up on site vist to kind
of particularly identify where that leak is. You know, that's still useful,
especially again, you know, whenthese leaks can happen at any time,
and you know, you just gotto be watching for them. And you
(33:17):
know the other thing and I thinki'll add you know that methane set is
going to enable us to do isnot only detect those you know, high
emission events, but also give usa good picture of kind of the diffuse
kind of sources that aren't large enoughto you know, trigger that you know,
be seen like that you know,quantification in space. But it'll give
us a better sense of kind ofwhat are the basin's total emissions and you
(33:42):
know, where are they coming fromand how are they changing over time?
Because you know, one thing wedo know, yes, super emitters are
responsible for a lot of emissions,but there are also a lot of emissions
from smaller sources that kind of andin the aggregate represent a lot of methane
emissions from the sector. For example, you know, we've and talking about
marginal wells, those very low producingwells, and there's research showing that their
(34:05):
rates of emissions are not necessarily relatedto their production and actually they even though
they don't produce a lot of products, are responsible. We are about fifty
percent of well power emissions. Somethinks that's going to enable us to get
kind of a clearer sense of thetotal emissions in a basin. Okay,
perfect, So we're going to takeanother break. There After the break,
(34:27):
I want to talk about a littlebit about the economics of all of this
and then maybe get into some casestudies. Will be right back. I'm
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can trust. Welcome back to theEnergy Nix. I'm Robert ray Pierre with
this week's guest, Melinda Taylor andElizabeth Lieberneck. This week we've been doing
(36:22):
a deep dive into the world ofmethane emissions and the oil and gas industry.
I want to talk about economics alittle bit, and how how do
you balance the costs of these methanereduction technology with the financial benefits of reducing
emissions. I mean, an oilgas comes is going to look at that
and they're going to say, hey, you know, if we don't do
anything, we're going to pay thispenalty and it's going to cost us as
(36:44):
much. I mean, how doesthis all shake out financially? Yeah,
I think as we were mentioning earlier, I think there's there's a difference between
those large and the small operators,right, And there are lots of different
factors that come into play when thinkingabout economics. Most in the most straightforward
sense, capturing methane and putting itinto pipeline so that it can be sold
(37:09):
downstream to a customer or compressed itan LNG liquified natural gas facility and then
exported overseas. That there's a financialbenefit in doing that. That's certainly better.
The company is better off selling aproduct than it is releasing a product
into the atmosphere or even burning itup in a flare. But on the
(37:30):
other hand, small operators, thereare many wells these marginal wells that produce
less than fifteen barrels of oil oroil equivalent a day. For some of
those operators, they don't have thosegathering lines available to them to collect the
gas. They currently just don't havethe option to collect it at the source
(37:53):
and send it downstream. So thequestion is how do we address But you
know, that's situation for that typeof operator. The other thing that I
think is important to remember is thataround the world, I mean, the
United States industry doesn't operate in thevacuum obviously, and around the world other
(38:14):
countries or jurisdictions are enacting standards thatwill affect US operators. The European Union
has adopted a regulation that in thenext couple of years will require their natural
gas importers to be able to certifythat the natural gas that they're bringing into
the EU was produced sustainably, wasproduced with very little methane fugitive emissions,
(38:39):
and so on, so for USoperators to be able to continue to export
to Europe. Same type of thingis coming up in various parts of Asia
as well. It is to theadvantage of US operators to be able to
demonstrate that they have done everything theycan to reduce their methane emissions. Permian
basing in Texas is the primary sourceof natural gas imports for Europe right now.
(39:04):
So there's a huge opportunity economically forTexas operators in the Permian to continue
to export natural gas to Europe andelsewhere around the world, and they want
to be able to do that,but the economics are putting some or excuse
me, those other jurisdictions are puttingsome pressure on our Texas operators to demonstrate
that they're reducing their methode emissions.So there's just a lot of different aspects
(39:30):
to that sort of financial and economicquestion. It goes beyond just the cost
of inspecting your site and reducing leaks, to these other sorts of economic impacts.
I had a conversation with an operatorin the Permium base on oil prodution
of Permier bation years ago that stuckwith me, and he was flaring gas
(39:50):
out of his oil field and weasked him, you know, why are
you flaring that instead of selling it? And he said, my gas is
worth an estimated six hundred thousand dollarsin this field, and the investment to
get it in the pipeline is twomillion dollars, and he said, this
is why we flare. And Ithink a lot of people don't understand that
there is a trade off there betweeneconomics that these operators looking at. And
(40:10):
you know, that's why sometimes youhave to have regulations or you have to
provide incentives for them to do things. I hear people said, why would
you ever give an oil company anincentive, well, to make them do
something they wouldn't otherwise do, AndI think that's the case with a lot
of this stuff here. Yeah,that's right. No, I think that's
absolutely right. And again going backto my previous comments about how the big
(40:31):
major companies, they sort of recognizedthat a long time ago that there were
whether it was pressure from their shareholdersor members of their boards or their investors
who were all saying, you know, what are you doing to reduce your
methane initisions. We understand that youdon't make as much money for natural gas
given what gas prices are, asyou do from producing oil, but we
(40:53):
still need you to show us thatyou are taking steps to reduce some methane
emissions. And that sort of cupwith a l of awareness and technical savvy
and all has has really facilitated ithink, great strides from those major companies
and the larger independent companies. Sothe gap now is how can those smaller
(41:14):
operators what can be done to sortof facilitate their ability to comply with the
new REGs but also to take verypractical steps to reduce emissions. Let's talk
about some actual case studies. Canyou talk about, you know, some
of your actual work, some casestudies success stories from your work in reducing
that dynamissions. One off the top, and you know, I'll just kind
(41:34):
of speak generally and not you know, I'm not an operator, and I
haven't you know, consulted for one. So and you know, we know
EDF did a project in the inthe Permian a few years ago called the
Permian Methane Analysis Project, and youknow, one one success story that we
had from that is kind of whatyou were going back you said earlier,
Robert, and that you know,providing data about emissions to operators can be
(42:00):
really useful in the sense that youknow, some operators they just maybe not
know that they're having this submission.So you know, that's you know,
been a powerful case study. Thatproject. We did a series of surveys
using like some of the technologies Molindawas talking about. We did overflights,
we used measurement towers, we DIDNDsome handheld surveys, and you know,
(42:20):
we we know that you know,some operators took action based on the information
that we provided to them. SoI think that kind of goes back to,
you know, enabling the industry tocorrect these problems by ensuring that they
they've got the tools and the educationthey need to to know how to find
and fix them. And I guess, you know, just add I mean,
there have been kind of public reportingof of operators who have invested in
(42:44):
methane capture and robust leak detection programsand have seen returns on that. I
mean, aside from any you know, upcoming compliance obligations, just you know,
capturing that product not letting it bereleased in that atmosphere to the dutchment
of our climate and and uh youknow royalty owners and capturing and selling it
and you know there's a financial benefitthere too. Yeah, And I yeah,
(43:07):
go ahead. And I was gonnasay when I have about a minute
left, but I also wanted toknow if there are any projects that didn't
work. But but I'd rather hearfirst anything that you've got that ONNDA.
Yeah, just just very briefly,our work at u T Austin with oil
and gas operators both large and small, has yielded a lot of I think,
(43:29):
important results. I mean, firstand foremost, you gain a lot
of information by talking to people thatare actually working out in the oil field
and experts in their in their industry. And with respect to the project I
mentioned at the very beginning of theprogram, the collaboration that we're doing with
those independent trade associations and the smallercompanies, we've gained a lot of knowledge
(43:53):
about how those those companies operate,how they think about their margins, what
type of assistance that can be fundedthrough this IRA funding will actually help and
yield graal benefits on the ground.So a lot of it just has to
do with being open minded, Ithink, and getting experts in the room
to share thoughts and perspectives, andyou know, get beyond some of the
(44:15):
posturing that occurs with respect to politicalquestions or even some regulatory questions. So
I think the more open the communicationcan be, the better off or the
more likely you are to generate realresults. Well, this has been very
informative. I mean I only gotthrough about half maybe my questions that I
(44:37):
had intended to ask, but youknow that I think this will be very
informative to listeners. This is areally important issue. Fortunately we're out of
time. I'm Robert ray Pier withthe Energy Mix with this week's guest Mellenititor
Elizabeth Leeberneck. Love to have youon again sometime because I think this was
a very great discussion, So thanksto the both of you. Well,
thanks for the opportunity, Robert surething. The Energy Mix Radio show is
(44:59):
where we explore topics that affect usall in the oil and gas industry.
Every week, our host will interviewthe movers and shakers in this fast paced
industry. You'll hear from industry experts, elected officials, and many more on
the Energy Mix Radio Show.
Welcome to the nationally syndicated Energy Mixradio show produced by the Energy Network Media
Group. The Energy Mixed Radio showwill give you an inside look at the
energy industry and how it affects youby talking with industry leaders, experts,
and government officials on the Energy MixRadio Show. Hi, I'm Robert Raypier,
editor in chief of Shale Magazine.Welcome to the Energy Mix. This
(00:22):
week, we're joined by two expertswho will discuss efforts to reduce methane emissions
from oil and gas operations. Forcontext, The Biden administration recently unveiled an
eight hundred and fifty million dollars grantprogram as part of the Methane Emissions Reduction
Program, which is included in theInflation Reduction Act. This funding is specifically
targeted at reducing measuring and monitoring methaneemissions across the country. The initiative is
(00:46):
particularly relevant to Texas, where itwill support projects led by state agencies,
communities, and industry to comply withthe new EPA Methane Rule and waste emissions
Charge. Notably, they smaller operatorsand texts stand again significantly from this funding,
as it will enable them to replaceoutdated equipment, adopt advanced mitigation technologies,
(01:07):
and improve the accuracy of methane measurement. To help us understand the implications
of this funding and its potential impacton both the energy sector and climate efforts,
we have with us today two experts. Melinda Taylor from u T Austin
is leading a project focused on missionproductions in the Permian Basin. Elizabeth Lieberneckt
is a regulatory and legislative manager withthe methane sector of the Environmental Defense Fund.
(01:33):
They'll provide their insights on methane andmissions production efforts in Texas and beyond.
Welcome to the show, Melenda Analysa. In the first segment, I
like to start out by having youtell listeners a bit about yourself, your
background, and what your organizations do. Sure, thanks Robert, and thanks
very much for the opportunity to behere. My name is Melinda Taylor.
(01:53):
I'm on the faculty of the Universityof Texas School of Law and teach.
As a member of the faculty,I teach environmental law classes and energy law
classes, and I also do quitea bit of research and work on collaborative
initiatives with other parts of the University, people from our engineering departments, geosciences,
(02:14):
business school, etc. The projectthat you referred to is one that
I've been engaged in with the numberof colleagues from the Engineering school, but
also with some key oil and gasstakeholders, some independent trade associations such as
the Texas Independent Producers and Royalty OwnersAssociation, the Independent Patrolling Association of America,
(02:38):
and Permium Basin Patrollum Association, andwe've been discussing, having discussions for
a year and a half or soabout how small oil and gas operators might
take some very practical steps to reducetheir methane initisions, which is going to
be the topic of our discussion too, lim So I can share some of
(02:59):
what we've been discussed discussing as weget into this rot having me. I'm
Elizabeth Liebernet. I'm the regulatory andLegislative Affairs Manager and Environmental Defense Funds Methane
Program for the Mid Continent. EnvironmentalDefense Fund is an international nonprofit creating transformative
solutions to our most serious environmental problemsthrough research and advocacy. We've been driving
(03:21):
global action to cut methane pollution forover a decade and we're really excited to
join you all the day to talkabout this funding opportunity and you know the
solutions that can unlock for operators inTexas and beyond. Thank you. So,
can you tell lists why are methaneemissions an issue? For sure?
(03:42):
For a few reasons. I mean, one is the climate. Methane is
a short term climate pollutant. Ithas over eighty times the warming power of
carbon dioxide in the first twenty yearsafter it reaches the atmosphere. And it's
also in oil and gas operations coitedwith other health harming pollution like benzene and
(04:02):
hydrogen sulfide and smog forming bocs.And then methane is also the primary component
of natural gas. So when methaneescapes during the production and transportation process,
and that's the waste of an energyresource. So reducing energy waste through methane
(04:24):
leaks and flaring can increase our energysecurity, improve the efficiency of our of
our energy production systems. So whatare the primary sources methane emissions in the
oil and gas checktor? Where arethese methane emissions coming from and how significant
are they compared to other industries?You know, they come really from many
(04:46):
sources throughout the industry, so kindof broadly speaking, kind of at the
production site, what you would kindof a kind of general way to categorize
methane emissions are through vents, flaring, and weeks. So venting emissions are
you know, direct releases into theatmosphere. They're usually kind of by design,
kind of part of the process,intentional, so you know, things
(05:12):
like controllers that you know, ourwork through the release of natural gas for
example, that's vented methane. Flaringcan also be a source of methane emissions.
The point of a flare is tocombust natural gas at a site that
doesn't have someplace else to go orand maybe limited safety situations. But when
(05:32):
that gas is sent through a flarecombustion device, if it's even if it's
operating, you know, pretty efficiently, there's still a little bit of methane
release as that gas is being convertedinto carbon dioxide and other products of combustion.
But when those flares don't operate properly, when they're unlit or they're malfunctioning,
they can they can be a sourceof vented methaneisions as well. And
(05:56):
we've found through research in places likethe Permian Basin that it's pretty regular for
flares to malfunction and bmlets, somethane emissions from from flaring can can be
up to five times more than EPAactually estimates. And then that kind of
third general category are from leaks orsometimes called fugitive emissions. So these are
emissions and you know throughout a productionsite and transmission as well, where you
(06:17):
know, you're not really expecting orplanning for those leaks to happen, but
they kind of they escape, theyleak out, and that can be you
know, either because something's not workingproperly or because you know, a piece
of equipment needs maintenance. So theycan come you know, from from whaleheads
and and takes and pipelines kind ofthroughout the couple of segments of the industry.
(06:42):
So how does how sim gearly comparedto other industries? What are the
trends like globally with methane emissions oiland gas, well, methane, there
are definitely different sources of methane emissions, and the oil and gas sector is
the largest industrial source of methane emissionsin Oka. You know, other significant
sources include sources from agriculture, wastemanagement like landfills. But oil and gas
(07:11):
is the country's largest industrial source ofmathea emissions. Okay, and how's that
trended during the shale boom? Isthat definitely? I mean, you definitely
see a rise attributed to the shalebone that started in you know, about
two thousand and five. Well,you know, it's interesting that, yes,
and you know, one of thekind of challenges I think we're going
(07:31):
to kind of talk about it,but you know, one of the areas
that we've just seen a lot ofgrowth in the last you know, ten
to fifteen years in the space areour detection and monitoring technology. So you
know, we are kind of,you know, moving from a place where
we didn't have a lot of greatinformation about the amount of methane emissions escaping
during the oil and gas production anddelivery process. But you know, now
(07:54):
we're we're getting better and better dataand so we're getting a better handle on
mathe the emissions from the sector.But we do know that through research that
you know, even when you're lookingat reported data that BPA has, you
know, studies have shown that theactual emissions from the sector are higher than
what's reported. To EPA. Okay, So, and that leads right into
(08:15):
the next question, and can youexplain how methane is detected and measured in
all the gas operations and how effectiveare these methods? Sure? Excuse me,
this is Melinda, I'm going totake that one. So generally we
talk about measurement and detection methods intobroad categories, sort of so called top
down assessments, which are measurements thatare taken by satellites. There is a
(08:41):
kind of growing number of satellites thatare becoming more and more accurate with more
finer resolution to detect methane leaks inthe oil field. Also aircraft that lie
with cameras and detection devices to measuremethane concentrations in the atmosphere and detect leaks
(09:03):
across sort of general regions. Thereare also some towers that have monitoring equipment
in place that again detect methane concentrations. And then there's so called bottoms up
methods of detecting methane. So thoseare things like drones that can be used
to look at individual sites, facilitiesout in the oil patch, or pipelines,
(09:26):
that sort of thing. Stationary monitorsthat are set up sometimes at the
fence line to detect methane emissions againfrom either an individual site or group of
sites. And then there are thingslike optical gas imaging cameras OGI cameras that
can be used to detect again methaneleaks at an individual site. So some
(09:50):
operators, especially larger operators, areusing OGI cameras to walk around a site
and detect potential leaks multy equipment that'scausing emissions at that facility. In terms
of how accurate they are, they'rethey're getting more and more accurate. The
latest satellites are able to detect evenat a facility level where there's a problem
(10:16):
there. You know, it's ait's a field of research certainly, and
part of the funding that's been providedthrough the Inflatial Reduction Act is going to
be dedicated to measurement and monitoring ofemissions. And I think the goal there
of the administration and of the folksthat are participating in the project is to
fine tune those measurements and UH monitoringmethods even further. But there's a lot
(10:41):
of good technology available right now tofor leads and detect them. Do you
do you have comprehensive. I guessis the is the monitoring. Can you
look at what's being detected and say, yeah, that kind of correlates what
we're seeing on the atmosphere, oror there's still a lot of holes in
the ability to detect what's there.Uh. You know, that's a really
(11:01):
good question, and I know thatsome industry folks especially are uncomfortable when that
bottoms up monitoring that I talked about. Where leaks are detected, there are
estimates of emissions from a particular sitethat are done by using these things called
(11:22):
emissions factors that the Environmental Protection Agencyhas developed that basically make assumptions about given
the rate of emissions from a leakand the fact that a leak is occurring
at a particular type of equipment,there's there are emissions factors or multipliers that
are used to estimate what the totalemissions from that piece of equipment are.
(11:46):
And some of the industry are notcomfortable with those emissions factors. So clearly
that's an area where additional real time, real measured data will ultimately, I
think be important for everybody to besatisfied. Okay, so we need to
take a quick commercial break rap thereand then after the break, I want
to dig deeper into the current andexpected future regulatory landscape. Okay, I'm
(12:11):
Robert Rapier on the energy backs.We'll be right back. Join us in
Corpus Christy on Wednesday, August fourteenthat eleven am for the twenty twenty four
Coastal Band Energy Transition Luncheon at theOrt Center on Harbor Drive in Corpus Christi.
This year's keynote speaker will be NickBurillo, the executive director of the
Center for Hydrogen Safety. Topics tobe covered include carbon capture, assessing and
(12:35):
managing safety risk in the hydrogen valuechain, and the emerging hydrogen economy in
the coastal Bend. That's Wednesday,August fourteenth, starting at eleven am in
Corpus Christi or the twenty twenty fourCoastal Band Energy Transition Luncheon. Poor tickets
and sponsorship opportunities go to Shale magdot com Slash Event Slash twenty twenty four
(12:56):
Dash Energy Dash Transition DASH Luncheon.Welcome back to the Energy Mix. I'm
Robert ray Pere with this week's guestMelinda Taylor and Elizabeth Liebernet. This week
we've been doing a deep dive intothe world of methane emissions in the oil
and gas industry. So what arethe biggest challenges we face and reduceing emissions
(13:18):
and the oil and gas sick.Yeah, this is a little bit.
I think, you know, onehistoric kind of challenge and one that we're
still you know, working through,is that methane is an odorless, colorless
gas, so you can't see itunless you have the right tools to look
for it. So, you know, for a long time and you know,
we didn EDF did a lot ofresearch to kind of you know,
(13:39):
help make methane emissions visible and toraise awareness of the impacts both to public
health and climate and to royalty ownersand tax payers from that lost product.
And so I think, you knowthat's you know, our understanding of the
of of the threat that methane posesand the data that we have about how
(14:01):
much is being emitted is improving alot. And you know, part of
I think the ongoing challenge is justensuring that you know, operators know,
you know that they do have mathaneemissions and where they're coming from, and
equipping them with you know, theright tools to find those leaks. And
(14:22):
fix them, because we do knowthat you know, a lot of a
lot of emissions from oil and gassector can be fixed cost effectively and with
pretty pretty minimal and you know,upgrades or repairs, not to say all
of them, but so I think, you know, kind of pivoting back
to the funding, you know,that's going to be a really you know,
exciting opportunity to help kind of oversome come some of those challenges.
(14:43):
It is just to increase awareness andeducation and provide operators with the actual tools
to to find those leaks and fixthem. Yeah, if I could just
add a little bit to that too, Robert, this is Melendos, So
well, what's interesting to keep inmind here is that the largest oil and
(15:03):
gas companies, the international operators andnational oil companies around the world have made
tremendous strides in identifying the sources ofmethane emissions at their operations and addressing those.
We saw some of that in lastyear at the end of the year
at the UN Conference on Climate thatthe top twenty eight operations, which was
(15:26):
in Dubai, fifty of the largestboil and gas companies in the world pledged
to reduce their methane emissions to nearzero into end routine flaring by twenty thirty.
So the large companies have been workingon this for a long time,
and they've figured out ways to captureemissions of methane and reduce those emissions and
(15:48):
turn those into product make sure theydon't lose money from those emissions. The
challenge, I think is really inthe space of the smaller operators that don't
have the sort of research in thecapital budgets that those large companies have,
and that have not been subject tothe same sort of regulatory and kind of
(16:11):
pr scrutiny that a lot of thelarger companies have been subject to. So
that's why I think this IRA fundingis so important because it really gives all
of us who care about this issuean opportunity to really help those smaller operators
financially and with some training and technicalassistance to get on an even playing field
(16:32):
with the larger companies. But it'sgoing to be a challenge, well how
does the regulatory landscape impact that,How does that affect the contribution meth dynamissions
attabit I can kind of lay outsome thoughts on that, and you know,
we you know, regulations are reallyimportant to ensure that there's you know,
a level playing field, that thereare kind of broad, common sense
(16:55):
and consistent standards that that all operatorscomply with. And and so we need
the regulations as a tool because,you know, kind of building out what
Melinda said, you know, voluntaryactions are not enough. They won't get
us where we need to be interms of how much we need to reduce
our about the emissions. And soyou know, regulations have have that benefit.
(17:18):
And you know what's kind of excitingabout this funding in this program is
that you know there are there arecompliments to the regulations to try to help
you know, operators come into complianceand to improve our understanding of you know,
what the emissions are and how they'rechanging over time, and to kind
of build on and and ease compliants. But the regulations down the line,
(17:41):
so are these state by state thestates different states have different regulations or their
national overarching regulations. Yeah, Ican start and then welcome your Oh okay,
so you know, yes, bothyou know, there are have been
state by state approaches so historically andthen the federal government weld the reference the
(18:03):
Environmental Protection Agency earlier, so that'skind of the lead regulator here on on
air quality standards. In places wherethere's more development on public land, there
are other agencies involved, but youknow, for purposes of talking about Texas,
although you know, places like youknow, Oklahoma or New Mexico there's
more public land. But and youknow, the EPA also regulates methane,
and and what you know, kindof their latest action on regulating methane was
(18:27):
the finalization of some standards in announcedin December but finalized in March that control
embissions from both new and existing sources. So what's going to happen now.
We can get into those standards alittle bit later if you want, But
for the for the existing sources,kind of the older sources, the states
(18:49):
will be responsible and have the opportunityto develop state programs to implement those standards.
So those rules aren't immediately effective forexisting sources, but there will be
state programs. States who to developplans will develop state programs to implement the
standards that EPAS set to control thispollution. Okay, we've got less than
a minute left in this segment.I've got a question thanks going to take
(19:10):
longer than that to answer, andso I'm going to push that until after
the break, and that's about therecent Supreme Court ruling on Chevron deference.
But I want her to point outthe latest funding announcement builds apart previous three
hundred and fifty million dollars funding roundand Texas received one hundred and thirty four
million dollars for reducing emissions. Afterthe break, I wanted to ask you
whether there are any significant achievements sofar in the previous funding. So with
(19:36):
that, let's take a quick break, and then we'll get into a few
more regulatory questions, particularly the importantChevron deference ruling from the Supreme Court Robert
Rapier on the energy in decks,we'll be right back at the port of
Corpus Christy. We maintain a clearpathway for waterway commerce so that our customers
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Welcome back to the Energy Mix.I'm Robert rape Pierre with this week's
(21:23):
guests, Melinda Taylor and Elizabeth lieberneckSo I previously for the break I mentioned
previous funding and how that has gone. So have there been any specific achievements
so far with the previous funding that'sbeen announced. Yeah, so this is
Melinda. You're absolutely right, Robertthat last year EPA announced that TCQ would
(21:47):
be receiving a significant amount of money, I think at the one hundred and
thirty four million to help address methaneemissions from marginal wells. The actual money,
we understand, was just received acouple of months ago, and the
agency is still in the process ofsetting up that program. I assume that
they will coordinate with the Texas RailroadCommission, which overseas oil and gas development
(22:08):
in Texas. But as far asI know in Elizabeth, you may have
other information, but as far asI know, that program is you know,
under development, let's say, butthe agency is moving forward. There's
also another source of funding that camefrom the Bipartisan Infrastructure Bill that the Texas
Railroad Commission achieved a significant or obtaineda significant amount of funding to plug orphan
(22:33):
wells, and that money was receivedabout a year ago. And our understanding
is the Railroad Commission has already madetremendous progress in kind of identifying and prioritizing
those abandoned wells orphan wells that itintends to use that federal funding to address
to make sure they're properly plugged.So there's been quite quite a bit of
(22:56):
funding so far from common ashev Irathe Inflation Reduction Act in the Infrastructure Bill
coming to Texas to address emissions fromthe oil and gas sector. Okay,
let's talk about a very important issue, and that is the recent Supreme Court
ruling, the overturn of the socalled Chevron difference truling. I've read a
lot of regulatory agencies that are veryalarmed by this ruling. Can you speak
(23:19):
to the implications and whether you expectthat to have an impact on the ability
to regulate methane emissions. Yeah.So the case that was decided by the
Supreme Court in the opinion was handeddown last Friday, on the last or
maybe it was on Monday, wasthe last day of the court's term.
As you said, Robert, itdid overturn, formerly overturn what was called
the Chevron doctrine, and simply put, that was just a concept used in
(23:45):
the judicial review of agency regulations wherebythe courts. The Supreme Court back in
nineteen eighty four, and the Chevroncase had said that courts should defer to
an expert administrative agency like the EPAor Department of Energy when that agency was
(24:06):
interpreting the law that it operates underand promulgating a regulation. It can get
complicated fast. But basically the doctrinewas that courts should be very reluctant to
interfere in second guests what the agencyhad to say about its legal authority.
The reality is, though, thatthe Court has not cited the Spring Court
(24:27):
has not cited Chevron since twenty sixteen. For all intents and purposes, the
Court has been sort of backing awayfrom the Chevron doctrine for a number of
years, and this Court has articulatedseveral other principles that indicate that it's not
very likely to defer to expert agencieswhen it comes to these regulations, at
(24:52):
least on the legal side. Ithink it's really too early to know whether
overturning Chevron in this lower decision isgoing to have a big impact on how
the Court will ultimately look at thesenew methane rags. As you probably know
that a number of states, Republicanled states filed a lawsuit back in April
(25:15):
challenging these methane regulations and that casesin the DC Circuit the Appellate Court,
and I understand briefing is underway,but the court hasn't heard that yet.
But anyway, my bottom line is, I think it's too early to know
whether or not this new local decisionis going to have a major impact.
I do know that the Biden administrationwas fully aware that the lower that this
(25:38):
challenge as Chevron was coming and triedto tried to craft the regulation in a
way that made sure it would beconsistent with the Cleaner Act and the authorizations
that the Agency has under the CleanerAct to regulate methane and other greenhouse gases.
Okay, thank you, that's veryhelpful. We're going to take a
quick break right there, and thenafter the I want to get into how
(26:00):
technology is helping in a spot toreduced mathane emissions. I've Robert Rappier on
the energey things. We'll be rightback. Any business can benefit from advertising
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Pick up the phone today and calltwo ten two four oh seven one
eighty eight again two ten, twofour oh seventy one eighty eight. Welcome
back to the Energy Mix. I'mRobert ray Pier with this week's guest Melinda
Taylor and Elizabeth Leeberneck. I'd liketo talk about technology a little bit.
(27:30):
What new technology to innovations are emergingin the field of methane and mission reduction.
Can you give you examples of anyof that have shown promise? Sure.
I think one way to look atthis is to look at this funding
opportunity. And one thing that EPAis doing is dedicating to one hundred and
fifty million dollars to accelerate the developmentof new technologies to reduce methane emissions through
(27:52):
the sector. So they're going tobe looking at accelerating the development of technologies
to reduce methane emissions and slip atcompressors stations for example, like along a
transmission system. So that's kind ofa pretty high emitting source and one where
you know, there's kind of developingsolutions to try to figure out how to
tackle another. Another area that EUPAand DUE you are looking to fund are
(28:17):
new technologies to prevent the need toflare gas, especially at those oil wells
that are producing associated gas. That'sa huge waste of energy resources and a
lot of solution coming from that practice. So there's a you know, this
is a really rapidly growing field andthe mitigation solutions, the monitoring solutions,
and that's one where this funding isgoing to go to support, you know,
(28:40):
kind of the accelerate the deployment ofthose kind of emerging technologies to reduce
gas flaring at well sites. Andthen the kind of the third category under
that one hundred and fifty million dollarbucket of funding is additional new technologies to
improve emissions at well sites, soyou know, different technologies to reduce emissions
when operators are doing you know,cleaning out liquids from their wells, kind
(29:04):
of liquids unloading, or new technologiesto reduce emissions from tanks or you know,
I talked earlier about process controllers.That's another big component of methane emissions
of production sites. So they're lookingto accelerate the deployment of new solutions to
do process controllers at a place,or electrified process controllers at sites that don't
(29:29):
have electricity, things like that.If I could just add a little bit,
though, I think one thing tobear in mind when it comes to
methane is that huge fraction of theoverall methane emissions from oil and gas are
pretty easy to address with existing technologies. So the International Energy Agency, for
example, estimated that the industry globally, and this would certainly be true in
(29:52):
Texas. Could achieve a seventy fivepercent reduction from current emissions rates just using
existing technology. Because remember a lotof the leaks are coming from things like
valves that need to be tightened onpipes or tank beef hatches on tanks that
have where the seal perhaps has degradedover time, and so it's leaking methane
(30:15):
from the tank. So there arelots and lots of steps that can be
taken that are not high tech andthat are not super expensive, but it's
a matter of getting the information outinto the field and in some cases providing
some financial assistance to operators who justdo not have it in their operating budgets
to upgrade pieces of equipment that needto be upgraded. Yeah, I mean,
(30:38):
that's consistent on my experience in oiland gas that most of the methane
emissions that go untreated we just don'tknow about them. We don't realize that
methane is leaking here or there.But technology is improving. You mentioned satellites
earlier. How do the use ofdrones and satellites compare to traditional methods,
and yeah, Elizbeth, you youprobably want to add to this as well,
(31:00):
because the EDIP actually has launched througha subsidiary, its own satellite.
That's made a kind of a bigsplash in the industry. But what the
satellites and drones give us a pictureof that we didn't have previously is especially
those large sources, those so calledsuper emitters, so facilities, whether it's
(31:22):
a tank that has a rupture andis just emitting a really significant amount of
methane from that rupture or pipeline,things that wouldn't have necessarily been detected or
at least not as quickly as theycan be with that sort of aerial surveillance
and satellite imagery, because those thecameras that are used in those types of
(31:48):
reconnaissance are really accurate and give usa great great amount of information about those
types of sources. We know thatthose super emitters, whether they're upset events
or these you know, really significantequipment failures, are responsible for a lot
of the overall meth thing that's comingfrom the oil field. So it's the
better the technology to detect those sortsof events and leaks, the better off
(32:13):
we are because those can be addressed, and the other sources, you know,
are just not as significant compared tothose huge emission events. Well you
may not know the answer to this, but it's generated a question in my
mind. How how much resolution doyou have on satellite? I mean,
I don't know how that works exactly. Are you able to zone in on
a particular site. If you've gottwo sites next each other, do you
(32:35):
have the resolution to cite this iswhere the methane is coming from. I
just don't know how much the satellitecan zone in. They're different. There's
an ecosystem of satellites, and sosome of them are kind of you know,
and heard people describe them as kindof like thinking about camera angles,
you know, kind of like afocused lens where you're zooming in on something.
And some you know, some operatorsare already deploying those technologies to help
(32:55):
them identify big leaks, you know, and really there's been a lot of
success, you know, getting likeMelinda saying, kind of screening and then
like if you know, you requirea follow up on site vist to kind
of particularly identify where that leak is. You know, that's still useful,
especially again, you know, whenthese leaks can happen at any time,
and you know, you just gotto be watching for them. And you
(33:17):
know the other thing and I thinki'll add you know that methane set is
going to enable us to do isnot only detect those you know, high
emission events, but also give usa good picture of kind of the diffuse
kind of sources that aren't large enoughto you know, trigger that you know,
be seen like that you know,quantification in space. But it'll give
us a better sense of kind ofwhat are the basin's total emissions and you
(33:42):
know, where are they coming fromand how are they changing over time?
Because you know, one thing wedo know, yes, super emitters are
responsible for a lot of emissions,but there are also a lot of emissions
from smaller sources that kind of andin the aggregate represent a lot of methane
emissions from the sector. For example, you know, we've and talking about
marginal wells, those very low producingwells, and there's research showing that their
(34:05):
rates of emissions are not necessarily relatedto their production and actually they even though
they don't produce a lot of products, are responsible. We are about fifty
percent of well power emissions. Somethinks that's going to enable us to get
kind of a clearer sense of thetotal emissions in a basin. Okay,
perfect, So we're going to takeanother break. There After the break,
(34:27):
I want to talk about a littlebit about the economics of all of this
and then maybe get into some casestudies. Will be right back. I'm
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can trust. Welcome back to theEnergy Nix. I'm Robert ray Pierre with
this week's guest, Melinda Taylor andElizabeth Lieberneck. This week we've been doing
(36:22):
a deep dive into the world ofmethane emissions and the oil and gas industry.
I want to talk about economics alittle bit, and how how do
you balance the costs of these methanereduction technology with the financial benefits of reducing
emissions. I mean, an oilgas comes is going to look at that
and they're going to say, hey, you know, if we don't do
anything, we're going to pay thispenalty and it's going to cost us as
(36:44):
much. I mean, how doesthis all shake out financially? Yeah,
I think as we were mentioning earlier, I think there's there's a difference between
those large and the small operators,right, And there are lots of different
factors that come into play when thinkingabout economics. Most in the most straightforward
sense, capturing methane and putting itinto pipeline so that it can be sold
(37:09):
downstream to a customer or compressed itan LNG liquified natural gas facility and then
exported overseas. That there's a financialbenefit in doing that. That's certainly better.
The company is better off selling aproduct than it is releasing a product
into the atmosphere or even burning itup in a flare. But on the
(37:30):
other hand, small operators, thereare many wells these marginal wells that produce
less than fifteen barrels of oil oroil equivalent a day. For some of
those operators, they don't have thosegathering lines available to them to collect the
gas. They currently just don't havethe option to collect it at the source
(37:53):
and send it downstream. So thequestion is how do we address But you
know, that's situation for that typeof operator. The other thing that I
think is important to remember is thataround the world, I mean, the
United States industry doesn't operate in thevacuum obviously, and around the world other
(38:14):
countries or jurisdictions are enacting standards thatwill affect US operators. The European Union
has adopted a regulation that in thenext couple of years will require their natural
gas importers to be able to certifythat the natural gas that they're bringing into
the EU was produced sustainably, wasproduced with very little methane fugitive emissions,
(38:39):
and so on, so for USoperators to be able to continue to export
to Europe. Same type of thingis coming up in various parts of Asia
as well. It is to theadvantage of US operators to be able to
demonstrate that they have done everything theycan to reduce their methane emissions. Permian
basing in Texas is the primary sourceof natural gas imports for Europe right now.
(39:04):
So there's a huge opportunity economically forTexas operators in the Permian to continue
to export natural gas to Europe andelsewhere around the world, and they want
to be able to do that,but the economics are putting some or excuse
me, those other jurisdictions are puttingsome pressure on our Texas operators to demonstrate
that they're reducing their methode emissions.So there's just a lot of different aspects
(39:30):
to that sort of financial and economicquestion. It goes beyond just the cost
of inspecting your site and reducing leaks, to these other sorts of economic impacts.
I had a conversation with an operatorin the Permium base on oil prodution
of Permier bation years ago that stuckwith me, and he was flaring gas
(39:50):
out of his oil field and weasked him, you know, why are
you flaring that instead of selling it? And he said, my gas is
worth an estimated six hundred thousand dollarsin this field, and the investment to
get it in the pipeline is twomillion dollars, and he said, this
is why we flare. And Ithink a lot of people don't understand that
there is a trade off there betweeneconomics that these operators looking at. And
(40:10):
you know, that's why sometimes youhave to have regulations or you have to
provide incentives for them to do things. I hear people said, why would
you ever give an oil company anincentive, well, to make them do
something they wouldn't otherwise do, AndI think that's the case with a lot
of this stuff here. Yeah,that's right. No, I think that's
absolutely right. And again going backto my previous comments about how the big
(40:31):
major companies, they sort of recognizedthat a long time ago that there were
whether it was pressure from their shareholdersor members of their boards or their investors
who were all saying, you know, what are you doing to reduce your
methane initisions. We understand that youdon't make as much money for natural gas
given what gas prices are, asyou do from producing oil, but we
(40:53):
still need you to show us thatyou are taking steps to reduce some methane
emissions. And that sort of cupwith a l of awareness and technical savvy
and all has has really facilitated ithink, great strides from those major companies
and the larger independent companies. Sothe gap now is how can those smaller
(41:14):
operators what can be done to sortof facilitate their ability to comply with the
new REGs but also to take verypractical steps to reduce emissions. Let's talk
about some actual case studies. Canyou talk about, you know, some
of your actual work, some casestudies success stories from your work in reducing
that dynamissions. One off the top, and you know, I'll just kind
(41:34):
of speak generally and not you know, I'm not an operator, and I
haven't you know, consulted for one. So and you know, we know
EDF did a project in the inthe Permian a few years ago called the
Permian Methane Analysis Project, and youknow, one one success story that we
had from that is kind of whatyou were going back you said earlier,
Robert, and that you know,providing data about emissions to operators can be
(42:00):
really useful in the sense that youknow, some operators they just maybe not
know that they're having this submission.So you know, that's you know,
been a powerful case study. Thatproject. We did a series of surveys
using like some of the technologies Molindawas talking about. We did overflights,
we used measurement towers, we DIDNDsome handheld surveys, and you know,
(42:20):
we we know that you know,some operators took action based on the information
that we provided to them. SoI think that kind of goes back to,
you know, enabling the industry tocorrect these problems by ensuring that they
they've got the tools and the educationthey need to to know how to find
and fix them. And I guess, you know, just add I mean,
there have been kind of public reportingof of operators who have invested in
(42:44):
methane capture and robust leak detection programsand have seen returns on that. I
mean, aside from any you know, upcoming compliance obligations, just you know,
capturing that product not letting it bereleased in that atmosphere to the dutchment
of our climate and and uh youknow royalty owners and capturing and selling it
and you know there's a financial benefitthere too. Yeah, And I yeah,
(43:07):
go ahead. And I was gonnasay when I have about a minute
left, but I also wanted toknow if there are any projects that didn't
work. But but I'd rather hearfirst anything that you've got that ONNDA.
Yeah, just just very briefly,our work at u T Austin with oil
and gas operators both large and small, has yielded a lot of I think,
(43:29):
important results. I mean, firstand foremost, you gain a lot
of information by talking to people thatare actually working out in the oil field
and experts in their in their industry. And with respect to the project I
mentioned at the very beginning of theprogram, the collaboration that we're doing with
those independent trade associations and the smallercompanies, we've gained a lot of knowledge
(43:53):
about how those those companies operate,how they think about their margins, what
type of assistance that can be fundedthrough this IRA funding will actually help and
yield graal benefits on the ground.So a lot of it just has to
do with being open minded, Ithink, and getting experts in the room
to share thoughts and perspectives, andyou know, get beyond some of the
(44:15):
posturing that occurs with respect to politicalquestions or even some regulatory questions. So
I think the more open the communicationcan be, the better off or the
more likely you are to generate realresults. Well, this has been very
informative. I mean I only gotthrough about half maybe my questions that I
(44:37):
had intended to ask, but youknow that I think this will be very
informative to listeners. This is areally important issue. Fortunately we're out of
time. I'm Robert ray Pier withthe Energy Mix with this week's guest Mellenititor
Elizabeth Leeberneck. Love to have youon again sometime because I think this was
a very great discussion, So thanksto the both of you. Well,
thanks for the opportunity, Robert surething. The Energy Mix Radio show is
(44:59):
where we explore topics that affect usall in the oil and gas industry.
Every week, our host will interviewthe movers and shakers in this fast paced
industry. You'll hear from industry experts, elected officials, and many more on
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