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The U.S. oil patch is the Wild West. We need regulation to control the sector’s methane emissions. 

June 14, 2021 Work Area: Methane

Scrutiny of the U.S. oil and gas sector has never been more intense. A majority of Exxon Mobil’s shareholders recently voted to oust three board members over the company’s poor performance on climate change. A shareholder proposal to cut the company’s GHG emissions reached a majority as well. And a Dutch court ruled Shell was contributing to climate change and ordered it to reduce its carbon emissions. And just last week, a new study from Clean Air Task Force and Ceres finds that methane emissions and emissions intensity from U.S. oil and gas companies vary wildly – underscoring the clear need for the EPA to establish a regulatory floor for the industry.

Methane is a harmful super pollutant that’s more than 80 times more potent than carbon pollution over the first 20 years. It’s responsible for roughly one quarter of today’s global warming and levels in our atmosphere are surging. Reining in our global methane emissions is imperative to tackling climate change and represents one of the clearest opportunities we have to make an immediate impact. A recent assessment from United Nations Environmental Programme and the Climate and Clean Air Coalition found that tackling methane is the largest lever we have can pull to reduce global warming in the next 20 years – and it can be done at little to no cost. By reducing global emissions 45% by 2040, the assessment found, we can avoid nearly .3 degrees Celsius in global warming while preventing 255,000 deaths, 26 million tons of crop losses, 775,000 asthma related hospital visits, and 73 billion lost work hours due to heat exposure.

Cutting methane emissions takes different forms in different regions. In the U.S., significantly reducing methane emissions from the oil and gas sector is job number one. The sector accounts for the lion’s share of U.S. methane emissions and, as the new CATF and Ceres report shows, there’s great variability around which companies are emitting the most – with some smaller companies acquiring the “leakiest” assets from the largest companies. While the 195 smallest producers included in the analysis account for just 9% of production, they’re responsible for 22% of total reported emissions. Large producers, however, are still responsible for massive amounts of emissions. The top seven producers in the U.S. oil and gas industry alone accounted for a quarter of total reported greenhouse gas emissions.

ExxonMobil, the highest producing company, had reported emissions that were twice as high as those of the second highest producing company, despite producing just 20% more oil and gas.  The comparatively small Hilcorp Energy, just the 19th-largest oil and gas producer, had the highest reported methane emissions in the country. Among top-30 producers, Hilcorp’s methane emissions intensity was almost 6x the national average. Other notable emitters among the top 30 producers include Marathon Oil and Whiting Petroleum, which had GHG intensities 3.6x and 2.7x greater than the average top-30 producing company, respectively.

The report also shows that certain classes of production equipment are responsible for large shares of total emissions, and companies that use them intensively have correspondingly high emissions intensities. Pneumatic controllers were responsible for 54% of reported methane emissions, while flaring was responsible for 41% of reported carbon dioxide emissions.

It’s important to note that this analysis reflects reported emissions, only. As hours and hours of optical gas imaging footage shows, companies are emitting plenty more methane than they’re reporting. This level of variation and opacity is due, in part, to poor oversight and enforcement by regulators. It’s the Wild West out there because that’s what the regulatory framework allows. In order to rein in methane emissions, we need a clear regulatory floor that mandates the use of best practices across the board to reduce leaks and stop flaring. CATF has run the numbers and found that we can reduce methane from the sector by 65% with existing technology, and do so at relatively little (and in some cases no) cost to the industry.

Investors, courts, and scientists have pinpointed the need to reduce methane emissions from the oil and gas industry. It’s time the EPA does so, too.

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