HOUSTON — Pollution didn’t top the list of concerns as the oil and gas industry converged here this week, but slashing methane emissions is still on the radar for some companies and environmental critics.
Industry executives who attended the annual CERAWeek by S&P Global conference are preoccupied with the Iran war — and they’re in the midst of building natural gas pipelines and power plants to serve the fast-growing artificial intelligence industry. The Trump administration has also rolled back EPA regulations on methane from oil and gas operations.
At the same time, technology ranging from satellites to handheld cameras has made it easier to spot methane leaks that contribute to climate change. It also can be relatively cheap to fix them. That makes methane — the primary component of natural gas — a key focus for environmentalists who see so-called fugitive emissions as low-hanging fruit in the fight against climate change.
Methane traps about 80 times more heat than carbon dioxide over a 20-year period.
“One-third of the climate change we’re experiencing now is from methane,” Fred Krupp, president of the Environmental Defense Fund, said during a panel discussion at CERAWeek.
A different session this week on U.S. shale development focused on ways to maximize production and efficiency. That fits with the Trump administration’s push for “energy dominance” as it calls on companies to boost U.S. oil and gas production. The shale panel eventually turned to emissions, if only briefly.
Sarah Fenton, executive vice president of upstream at gas producer EQT, told attendees it’s important to make the “best use out of the full molecule” from the wellhead to the electron — while staying cognizant of emissions.
EQT is a founding member of the Appalachian Methane Initiative, which Fenton said uses satellite information, aerial surveys, ground sensors and operational data to home in on emissions sources.
“For EQT, we make money with methane in a pipe,” she said. “So if we’re emitting methane, it’s not in a pipe and we’re not making money.”
EQT operates primarily in the Marcellus Shale. Overall, producers in Appalachia leak about 0.6 percent of their gas production, according to data from the Environmental Defense Fund.
The environmental group argues that regulations are crucial to tackling the problem. The group published data in September from its methane-detecting satellite, or MethaneSAT, that showed big disparities between fugitive emissions in Texas and New Mexico, which is notable given the two states’ different approach to regulation.
On the New Mexico side of the Delaware Basin — a subsection of the prolific Permian Basin — leaks accounted for 1.2 percent of overall gas production. On the Texas side of the same basin, the rate was more than twice as high, 3.1 percent.
New Mexico adopted rules on oil field methane pollution starting in 2020, while Texas has taken a more hands-off approach. The state doesn’t classify methane as a pollutant, and state regulators allow frequent exceptions to their existing rules, like a long-standing prohibition on flaring gas.
“I can’t say one caused the other, but I can say there’s a very strong correlation,” Steven Hamburg, chief scientist at EDF, said in an interview earlier this month. “You can’t come up with a plausible explanation for that other than you’ve got regulations on one side versus the other.”
New Mexico officials estimate the regulations helped capture $125 million worth of gas that would otherwise have been released to the atmosphere, and generated $27 million worth of royalties and tax revenue. The rules require companies to periodically check for and repair leaks, install low-emitting equipment, and connect wells to gas-capture equipment.
“New Mexico’s methane regulations demonstrate that we can lead the nation in both energy production and environmental stewardship,” Gov. Michelle Lujan Grisham (D) said in September when the EDF research was released.
Looking to Europe
Concerns about emissions of U.S. gas also stretch beyond American borders. Governments in Europe and the U.S. are concerned about energy costs, particularly after the war in Iran stopped the flow of oil and gas through the Strait of Hormuz and sent prices soaring.
“At the end of the day, it is good to have a goal of sustainability — but if sustainability crashes your economy, you have to readjust,” Katherina Reiche, Germany’s minister for energy and economy, said at the conference.
The Trump administration is eager to boost U.S. liquefied natural gas exports, and his Cabinet members have called the European regulations a barrier. The E.U. rules set strict limits on the amount of gas leaks associated with imported LNG, which would require cleaning up the U.S. gas system to meet European standards for monitoring, reporting and verifying methane leaks.
“They have this methane regulation that they need to fix, which will allow even more LNG to flow, but I think given what’s happening obviously in the strait now, all of these European countries realize their best customer and their best client is going to be the United States,” Jarrod Agen, executive director of the National Energy Dominance Council, said at CERAWeek.
Producers including Shell and EQT say they’re still interested in going after pollution, both for environmental and business reasons. Customers are looking for energy providers to lower their climate-warming emissions, while keeping a lid on costs, Shell CEO Wael Sawan said.
“We can bring a competitive advantage and solutions that are affordable to our customers as well,” Sawan said. “That’s going to be key, because it’s not just good enough to talk about your carbon solutions.”
EQT has invested in cutting its emissions and sees that as a differentiator compared to other companies, Amy Rogers, the company’s head of communications, said in an email.
“The question is less about whether we can comply, and more about how policy frameworks are structured,” she said. “If Europe’s goal is to balance decarbonization with security of supply, there’s a conversation to be had about whether current or proposed import regulations could unintentionally limit access to dependable and affordable energy from the U.S.”
Even if the implementation of the European regulations is reasonable, they can cause problems for gas producers, said Geoffrey Pyatt, who led the energy office at the State Department under the Biden administration.
“The methane regulations are a legal framework, so the lawyers get involved,” he said. “And so the lawyers say, ‘Well, that’s fine. … But how do we write a contract on this, and how do we avoid opening ourselves to litigation?'”
Producers and other companies like pipeline and terminal operators also look to cut their emissions because of pressure from shareholders or customers, said Jim Kibler, executive director of ONE Future, a coalition of firms that work to reduce methane emissions in the gas system.
“Our members decided to win the energy transition regardless of regulations,” he said.
Ben Webster, director of policy at methane-tracking organization MiQ, said it’s important to keep some regulations in place, even as the Iran war scrambles the flow of energy. MiQ works as a third-party certifier for natural gas, helping to create a voluntary market for environmentally friendly fuel. The E.U.’s methane regulations can also serve to create a market for U.S gas, he said.
“What I think is really important to recognize is that we can walk and chew gum at the same time,” he said.
Sophia Cai, James Bikales and Edward Klump contributed to this report.
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