The key for EPA rules? Inside the methane tech revolution

By Mike Lee | 10/25/2021 07:02 AM EDT

There's a boom of new companies offering technologies to detect methane leaks from oil and gas operations — a trend that could determine the success of Biden's coming EPA rules.

A drone used to detect methane hovers over a Colorado research campus.

A SeekOps drone — used to detect methane leaks at oil and gas sites — is pictured at an experimental emissions research facility in Fort Collins, Colo. Colorado State University/Methane Emissions Technology Evaluation Center

With its patchy grass and gravel roads, the 7-acre lab plot on the outskirts of Fort Collins, Colo., looks like one of the thousands of oil and gas sites that dot the western United States.

The wellhead valves and storage tanks are the real thing, surrounded by dirt berms designed to catch spills.

The difference is a trailer off to the side, where computers carefully release measured amounts of gas into the air. Instead of producing oil and gas, the lab is helping researchers test new ways to detect oil field methane leaks — a key driver of climate change.


The laboratory, known as the Methane Emissions Technology Evaluation Center (METEC), was built five years ago at Colorado State University with a grant from the Energy Department. It has since become a central player in a boom of methane detection companies — a surge being driven partly by corporate pressure to cut emissions and looming EPA regulations. In the past four years, the number of such firms has doubled, with many testing their specialized drones and cutting-edge sensors on staged gas releases at METEC.

“If you want to make stuff leak, we’re your team,” quipped Daniel Zimmerle, the center’s director.

But questions linger about the extent to which existing technology can spot and stop leaky wells and pipes. And activists pushing for a crackdown on methane emissions are concerned that coming EPA regulations won’t be tough enough to ensure energy companies invest in better technology. The Biden administration rules, which would require oil and gas companies to spot methane leaks and repair them, are expected as early as this week.

The extent of the challenge was highlighted this month by the International Energy Agency, which noted in a report that only 70 percent of methane emissions from oil and gas operations can be avoided with existing technology (Energywire, Oct. 7).

“While industry efforts can and should continue, government policy and regulation will be critical to removing or mitigating obstacles that prevent companies from getting started and going further,” the report said.

In the meantime, leak detection companies are seeing a flush of cash.

Earlier this month, philanthropic organizations like Bill Gates-backed Breakthrough Energy, for instance, pledged more than $220 million for methane reduction. Oil companies and a consortium known as the Oil and Gas Climate Initiative also have provided funding for some of the companies, as have oil majors like Exxon Mobil Corp., which is working to get EPA certification that would allow some of the new gear to be used for meeting regulations.

Along with testing their products at METEC, many firms entering the new market got their start with seed money from the Energy Department’s Advanced Research Projects Agency-Energy (ARPA-E) or from the Environmental Defense Fund’s methane detection challenges, a series of competitions that awarded prizes for new types of equipment. Some of them are led by academic researchers with Ph.D.s, and at least one company is using technology based on Nobel Prize-winning research.

Additionally, investors are pushing oil and gas producers to cut the waste and emissions from their operations. Several companies, including Exxon and EQT Corp, the biggest U.S. gas producer, have said they will voluntarily certify that at least some of their gas operations are low-polluting (Energywire, Sept. 8).

There have been several big-money mergers involving companies in the space, and a lot of observers expect there will be a wave of consolidation over the next few years.

For the physicists and engineers who run some of the startup companies, it feels like a moment.

“You only get one of these in a lifetime,” said Pete Roos, the CEO of Bridger Photonics, which makes an aerial detection system.


The EPA driver

The upcoming EPA regulations are significant for methane detection companies because they will create a nationwide standard for controlling emissions of the greenhouse gas. Currently, there is a patchwork of state and federal rules.

The two biggest oil-producing states, Texas and North Dakota, have notoriously lax rules about oil field emissions. A handful of states, notably Colorado, already require producers to regularly inspect their sites for leaks and repair them in a set amount of time. EPA has had a similar protocol for newly drilled wells, and its upcoming rules could expand the standard to cover the hundreds of thousands of existing wells in the country.

Some environmentalists say that loose regulations and speculative investors have contributed to the amount of methane emissions. During the peak of the fracking boom, companies produced so much gas that they pushed down the price. Many of the companies ultimately went bankrupt.

“We think that rather than expecting to receive subsidies and tax breaks for doing what they should be doing anyway, or publicly funded help from the Department of Energy, companies should be forced to reduce methane waste through tighter regulation and tougher enforcement,” Lorne Stockman, a research analyst at the environmental group Oil Change International, said in an email.

And even reducing methane emissions from the oil field will only go so far. The gas still creates climate-warming emissions when it’s burned in power plants, home furnaces and other places.

Zimmerle said he and the METEC staff take a longer view. Oil and gas production is going to be around for decades, even as the world tries to adapt to climate change. Fixing gas leaks is an important part of addressing the industry’s emissions in the short term, he said.

“We’re in it because we want to make a difference,” he said. “We’re very enthusiastic about it — because it’s moving the needle, the real thing.”


From DOE to leak detector


Dan Zimmerle
Dan Zimmerle is director of the Methane Emissions Technology Evaluation Center at Colorado State University. | Colorado State University

To move the needle, researchers will have to vastly improve on methane-detecting instruments that have been around for more than a decade. They range from hand-held sniffers that work like smoke alarms to optical gas imaging cameras that use the same kind of infrared technology found in military night-vision goggles.

EPA experimented with infrared cameras to find leaks at oil and gas sites as far back as 2006 (Greenwire, June 20, 2006).

Those first-generation detectors had a couple of shortfalls, however. They had a limited range, they generally weren’t designed to do continuous monitoring, and they couldn’t quantify the amount of gas in a plume. And the gas-imaging cameras tended to be expensive, running $90,000 or more.

Those were some of the problems the ARPA-E program was trying to solve when it provided $4 million to establish the METEC project. ARPA-E also provided startup funds to help companies develop technology and second-round funding for companies that were ready take their ideas to market.

Zimmerle and the center’s staff built the lab from scratch. They took apart equipment donated from oil and gas companies and rebuilt it with deliberate leaks, like a pinhole drilled into a pressure gauge.

They plumbed the imitation oil field to a tank of compressed gas and designed a control system that can imitate the size and pattern of leaks that the team has measured in the field, and can also mimic the intermittent leaks that are common in oil and gas production.

Because the lab operators know how much gas they’re releasing, they can evaluate how well the detection systems are measuring the simulated leaks.

The biggest hurdle most developers run into is the complexity of translating gas measurements into usable information, Zimmerle said. There’s a difference between just finding gas near a site and determining that it’s really from a leak.

“The way to think about it — wind fields are much more complex than your mental model of this,” Zimmerle said.

“Wind swirls around and gets captured in various places. Emissions don’t move as a single stream; they get broken up, and they come in clumps.”

The ARPA-E program has fostered the methane detection industry in a couple of ways. In addition to startup funding, the program also provides assistance to help companies scale up their products — finding the right suppliers and smoothing out their supply chains to create a viable business.

At least one company has used the supercomputers at the Energy Department’s Los Alamos National Laboratory to develop its software, said Joseph King, program director for ARPA-E’s methane monitor program.


Drones, helicopters and ‘laser frequency combs’

METEC doesn’t develop methane detection systems. But its combination of testing and real-word conditions helped turn a lot of cutting-edge academic research into real-world products, observers say. Most of the new detection companies that ARPA-E has helped with funding have also tried their ideas at the center.

Bridger Photonics, for instance, used an ARPA-E grant to develop a laser detection system that’s based on an idea developed at the Massachusetts Institute of Technology’s Lincoln Laboratory.

The company was founded by Roos and two other academic researchers and originally used lasers to draw maps, a process known as lidar (light detecting and ranging). The same technology can be used to locate methane and other gases.

Lidar systems measure distances by bouncing beams of light off distant objects and measuring the time it takes them to return to their source. Methane, like other gases, absorbs specific wavelengths, or colors, of light. So if a beam in that frequency is aimed at the ground but doesn’t bounce back to its source, scientists can infer that it’s been absorbed by the gas.

Bridger developed a compact laser that can be mounted on helicopters or other aircraft and tested its performance at METEC. It allows oil and gas companies to scan hundreds of sites a day in places like the Permian Basin oil field, not only locating the leaks but determining their size so that companies can figure out which ones need to be fixed first.

The system also combines images of the leaks with an aerial photo of the ground, which makes it easy for companies to pinpoint a problem’s location, the company said.

LongPath Technologies, based in Boulder, Colo., was founded by academic researchers at the University of Colorado, with financial assistance from ARPA-E. Its system is based on a Nobel Prize-winning idea developed at the university known as a “laser frequency comb,” which is a beam made of a broad range of frequencies.

The range of frequencies allows the system to detect a wide range of gases with a high degree of sensitivity, including methane and other oil and gas byproducts. The company developed a system with a rotating beam, like a ship’s radar, that can scan for leaks continuously in a 2.5-mile radius.

The advantage of the system is that it can catch the short bursts of emissions that are such a problem in the oil field and transmit their location quickly. LongPath can send its information to companies in real time, Chief Technology Officer Greg Rieker said.

“That’s where the ground-based continuous approach is really useful — you are able to see emissions quickly and confirm if they are significant and more than a short-lived event before responding,” he said.

SeekOps, based in Austin, Texas, also provides continuous monitoring, using a drone-mounted sensor.

The company was founded by two researchers who previously worked at NASA’s Jet Propulsion Laboratory. Its sensor fits in a 6-inch tube and directly samples the air, detecting gas concentrations as small as a few parts per billion. By flying the perimeter of a site or a piece of equipment and collecting a series of measurements, it can pinpoint the source of a leak and the volume of gas that’s escaping.

SeekOps, like other startups, tested its system at METEC and is starting to see repeat customers in both the oil field and the renewable natural gas business, CEO Iain Cooper said.

It has attracted investment from the Norwegian energy company Equinor, the Oil and Gas Climate Initiative, Caterpillar Inc. and Schlumberger Ltd., the oil field services company.

The big service companies are logical buyers for the high-tech startups like SeekOps because they already provide a range of software and other services to oil and gas operators, Cooper said.

“Ultimately, an operator will want someone to integrate monitoring, detection and repair services,” he said.


‘A home run’


Craig O'Neill using optical gas imaging camera in Fort Worth, Texas.
Craig O’Neill, director of business development for Teledyne FLIR, uses one of the company’s optical gas imaging cameras to check for methane emissions at a gas well pad in Fort Worth, Texas. | Mike Lee/E&E News

Baker Hughes, one of the top three oil field service firms, is working on providing leak detection as part of its package of monitoring and software systems.

The company bought a detection startup called Avitas Systems in 2018. The terms of the deal weren’t disclosed, but the market for leak detection could be worth billions of dollars, said Rami Qasem, Baker Hughes’ executive vice president of digital solutions.

Ultimately, Qasem said, the technology could be adopted down the length of the petroleum supply chain, from oil fields to refineries.

Like Cooper, Qasem said he expects oil field service will keep expanding in methane monitoring.

“If they’re not today, I believe they will tomorrow,” he said.

At least two systems will eventually be able to track methane from space. EDF created a separate nonprofit to develop a satellite that is expected to be launched on the SpaceX rocket in 2022. Meanwhile, Paris-based Kayrros is analyzing data produced by the European Space Agency’s to track regional emissions trends (Energywire, July 7).

FLIR Systems Inc., which was acquired by Teledyne Technologies Inc. earlier this year, has been producing infrared cameras for the oil field for more than a decade. Now known as Teledyne FLIR, it has adapted to the wave of new technology by introducing lower-priced cameras and developing new software to work with its existing system. It has a tablet-based application that can quantify the volume of a gas leak based on atmospheric data.

Craig O’Neill, director of business development for the company’s gas imaging business, said there’s still plenty of demand for the company’s hand-held cameras. A lot of systems can spot leaks from a distance, but repair crews still need a way to find the leaks when they pull up to the site, and they need to check their work when they’re done.

And the oil and gas industry will require leak detection as long as it’s producing gas and moving it through pipelines, O’Neill said, comparing methane to mundane problems that don’t go away.

“Concrete cracks, ice cream melts and gas leaks,” O’Neill said.

In the long run, methane detection will probably evolve into a multi-layered system, with satellites watching for regional emissions, continuous monitoring in some areas and aerial monitoring in others, said David Lyon, a scientist at EDF, and Andrew Baxter, director of energy strategy at EDF, in an interview.

Investors are sensing long-term value in the industry. Teledyne paid $8 billion for FLIR Systems, for instance. The company’s gas imaging cameras only account for a small part of its oil and gas division’s revenue — less than 5 percent — but that still gives the camera business an implied value as high as $150 million.

Honeywell International Inc. bought Houston-based Rebellion Photonics, another producer of gas imaging systems, in 2019. The terms of that deal weren’t disclosed, but one of the company’s founders told Forbes the deal was “a home run.”

As for METEC, the center’s testing system allows developers to see if their technology works without revealing any proprietary information.

On a more practical level, the center has helped the industry in several ways, observers say. The best sensors are only as good as the system used to deploy them, EDF’s Lyon said. And video evidence is a powerful tool.

“Seeing emissions is really believing it,” he said.