Why Big Energy Opposes Trump Break on Methane Leaks

(Bloomberg) -- Natural gas is now the top fuel used to produce electricity in the U.S., having dethroned coal. It’s cheap, and when burned cleanly it emits only half the carbon dioxide of coal. But there’s a catch: If natural gas gets into the air without being burned, it releases methane, a potent greenhouse gas on its own. So the case for natural gas as a “green” fossil fuel rests on methane leaks being kept to a minimum. The Trump administration is about to make that harder.

1. What’s the Trump administration doing?

President Donald Trump wants to rescind measures enacted under his predecessor, Barack Obama, that force energy companies to monitor and fix methane leaks. The Environmental Protection Agency portrays those measures as unnecessary: “Methane is valuable, and the industry has an incentive to minimize leaks and maximize its use.”

2. What’s been the response?

Environmental groups are not happy. “The Trump EPA is eager to give the oil and gas industry a free pass to keep leaking enormous amounts of climate pollution into the air,” the Natural Resources Defense Council said. Even energy companies are split on the issue. The EPA says the change would save the companies $123 million through 2025. But BP Plc and Royal Dutch Shell Plc said they oppose the move and worry that methane leaks by bad actors could undermine marketing natural gas as a clean fuel.

3. What is methane?

It’s the largest component of natural gas. Produced from the remains of animals and plants that died hundreds of millions of years ago, methane escapes naturally from volcanoes, ocean floors, wetlands and the digestive processes of livestock. Designated by scientists as CH4, methane consists of a single carbon molecule and four hydrogen molecules. It’s odorless, colorless, tasteless and one of the most plentiful organics on the planet.

4. How does it damage the environment?

Methane accounts for just 10% of greenhouse gas emissions but is 84 times more potent than carbon dioxide over a 20-year period, which means it is much more efficient at trapping heat. Methane also dissipates from the atmosphere more quickly than carbon dioxide, meaning that emitting less of it would provide a quicker win in curbing global warming.

5. Why is this a big issue now?

The U.S. is in the midst of an oil-and-gas boom, producing record amounts of both due to a revolution in hydraulic fracturing technology (or fracking) that increases access to reserves trapped within shale. Since 2008, there has been a “massive” spike in methane emissions, and the main culprit is fracking, according to a Cornell University study published in August.

6. How does methane leak?

Natural gas requires a long and complex journey from deep in the ground to the end user, be it a household or a power station. Leaks can occur throughout the journey, from the wellhead where it’s initially pumped, to storage facilities, pipelines and processing units.

7. How much is leaking?

No one knows for sure. A study by the Environmental Defense Fund published in the journal Science last year estimated that 2.3 percent of natural gas pumped from U.S. fields leaks into the atmosphere. That’s enough gas to fuel 10 million homes.

8. What can be done?

With the success of fracking, the U.S. is now producing more natural gas than it can handle, soo much so that pipelines and processing centers in many regions are at full capacity and gas pricing has cratered. Rather than release the excess gas (and its methane) into the atmosphere, frackers burn it in a process called flaring, which produces less-damaging carbon dioxide. But flaring is not 100% efficient, and it’s almost inevitable that some methane leaks into the atmosphere.

The Reference Shelf

• QuickTake explainers on flaring and the shale revolution.
• The Cornell study on a "global spike in atmospheric methane."
• In Bloomberg Opinion, Cass R. Sunstein mulls why companies sometimes oppose deregulation.

To contact the reporters on this story: Kevin Crowley in Houston at kcrowley1@bloomberg.net;Naureen S. Malik in New York at nmalik28@bloomberg.net

To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Reg Gale, Laurence Arnold

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