An analysis conducted for the Environmental Defense Fund (EDF) by ICF International (ICF) shows that the U.S. oil and gas industry can “significantly and cost-effectively” reduce methane emissions using currently available technologies and operating practices.
Economic Analysis of Methane Emission Reduction Opportunities in the U.S. Onshore Oil and Natural Gas Industries contains these key findings:
- Total methane emissions from U.S. oil and gas are projected to increase 4.5% by 2018 as emissions from industry growth – particularly in oil production – outpace reductions from regulations already on the books.
- Industry could cut methane emissions by 40 percent below projected 2018 levels at an average annual cost of less than one cent per thousand cubic feet of produced natural gas by adopting available emissions-control technologies and operating practices. This would require a capital investment of $2.2 billion, which Oil & Gas Journal data shows to be less than 1% of annual industry capital expenditure.
- If the full economic value of recovered natural gas is taken into account, the 40% reduction is achievable while saving the U.S. economy and consumers over $100M per year.
- The most cost-effective methane reduction opportunities would create over $164M net savings for operators.
- Almost 90% of projected 2018 emissions will come from oil production and natural gas infrastructure.
- A number of solutions, particularly in the upstream of the oil and gas value chain, will have environmental co-benefits at no extra cost, by reducing emissions that can harm human health, like volatile organic compounds and hazardous air pollutants.
The report's scope apparently did not include the serious deterioration of the natgas distribution system. Still, the ICF report charts a clear course for industry action and regulatory improvement on methane emissions. The problem is fixable. Now, will it be fixed?