Podcast

Why New Tech is Key for EPA Methane Rule Compliance

The EPA's methane rules for the oil and gas industry will depend on new technologies to monitor and verify climate impacts.

In December, the Environmental Protection Agency introduced regulations to limit the amount of methane that escapes into the atmosphere from the oil and gas industry. In theory, the path to reducing emissions should be relatively straightforward. Efforts will focus on stopping the routine venting of methane from wells, and on the plugging of leaks from pipelines and other infrastructure.

Yet, for the new rules to be effective, emissions will need to be measured across vast and geographically dispersed oil and gas infrastructure. Likewise, data from many different monitoring technologies will need to be reconciled so that efforts to reduce climate impacts can be verified.

On the podcast, Arvind Ravikumar, co-director of the Energy Emissions Modeling Lab at the University of Texas at Austin, and Kleinman Center Senior Fellow John Quigley explore the new rules governing methane emissions in the U.S. and the technological challenges surrounding compliance. 

Andy Stone: Welcome to the Energy Policy Now podcast from the Kleinman Center for Energy Policy at the University of Pennsylvania. I’m Andy Stone.

In December, the Environmental Protection Agency introduced regulations to limit the amount of methane or natural gas that escapes into the atmosphere from the oil and gas industry. The industry is the largest source of methane emissions from human activity in the US. According to the International Energy Agency, methane has caused nearly a third of climate warming since the start of the industrial era. In theory, the path to reducing methane emissions should be relatively straight-forward. Efforts will focus on stopping the routine venting of methane from wells and on the plugging of leaks from pipelines and other infrastructure. Yet for the new rules to be effective, emissions and emissions reductions will need to be measured across vast and geographically dispersed oil and gas infrastructure. Likewise, data from many different monitoring technologies will need to be reconciled so that efforts to reduce climate impacts can be verified.

On today’s podcast, we’ll explore the rules governing methane emissions and the challenge of ensuring compliance with those rules with my two guests. Arvind Ravikumar is Director of the Energy Emissions Modeling Lab at the University of Texas at Austin. John Quigley is a Senior Fellow here at the Kleinman Center and former Head of the Pennsylvania Department of Environmental Protection. Arvind and John, welcome to the podcast.

John Quigley: It’s great to be here.

Arvind Ravikumar: Thanks for having me.

Stone: So John, methane emissions are being addressed by a number of new federal programs and regulations, one of which I briefly introduced at the beginning of this podcast. Could you give us a big picture overview of actions to address methane emissions? There is quite a lot going on right now.

Quigley: There certainly is, and not only in the United States, but in the EU. For example, in November the EU agreed to place methane emissions limits on oil and gas imports by 2030, and they enacted some other requirements for European producers, requiring them to check and fix leaks, measuring reports, methane emissions, and so on. Here in the US, there are a couple of big things going on. The Inflation Reduction Act passed in 2022 created the Methane Emissions Reduction Program called MERP, which aimed at the oil and gas sector and is providing over a billion dollars in financial and technical assistance to accelerate methane emissions reductions.

MERP also established an annual charge on every ton of methane emitted that exceeds specified thresholds, and that fee will rise over time. The IRA also requires the EPA to revise their Greenhouse Gas Reporting Program as it regards the oil and gas sector. Then in December, EPA unveiled their final regulations on methane emissions from the oil and gas sector. They have estimated that those regs will cut methane emissions by 80% over the next 15 years. They also, for the first time, established limits on methane emissions from both new and existing sources. The regs also set procedures for states to follow in developing their plans to limit methane emissions from existing sources. So there is a lot to unpack there, but the increased regulations are very strong, in my opinion. They are comprehensive, and very importantly, they incorporate the latest advances in detection technology and emissions measurements. So it’s a big step forward.

Stone: So Arvind, how big are methane emissions from the energy sector, compared to other sources, and why might efforts to reduce energy sectors’ specific emissions hold particular promise?

Ravikumar: One of the most interesting things about methane emissions regulations that we have right now in the US is that it is the first comprehensive approach to addressing methane emissions across the supply chain. And when I say “supply chain,” I mean from the point of production of methane emissions, which are the oil and gas wells around the country, all the way through pipelines and distribution into our cities and our homes. These efforts have been coordinated by various regulatory agencies through the EPA, which we just heard about, as well as the Department of Transportation that has jurisdiction over all pipelines in the United States.

Now, the reason why this is a really important step forward is that methane is one of the most potent greenhouse gases that are around. On a mass basis, a single kilogram of methane is 80 times as potent as carbon dioxide in contributing to global warming within a 20-year timeframe. So addressing methane emissions as quickly as possible, before it reaches into the atmosphere, is really important. One of the benefits of addressing methane first is that methane has a very short lifetime in the atmosphere of about 12 years, and so if you stop methane emissions today, you will see the impact of emissions reductions in a few decades, in our own lifetimes, which is unlike carbon dioxide, where if you reduce methane today, the impact of those reductions will only be visible centuries from now because carbon dioxide resides in the atmosphere for hundreds of years.

And why is addressing methane important in this context in the energy sector? Because the energy sector in the United States is the largest source of methane emissions in the country. And one of the key reasons to go after energy sector methane emissions is that because of advances in technology and innovation over the past decade, it’s one of the most cost-effective approaches to addressing methane emissions in the oil and gas sector. In fact, many of the actions required by the EPA and other regulatory agencies to address methane are cost-negative, in that by preventing methane from leaking into the atmosphere, the operator can sell that gas and make money out of that. So you are actually saving money by addressing methane emissions.

So a whole host of methane reduction measures are cost-negative, and even those efforts that are going to cost a bit more are highly cost-effective, compared to other approaches. And so there is the timing of methane regulations, because it’s really important to address it as a highly potent greenhouse gas. There is the technology and innovation piece that is making methane emissions reductions highly cost-effective. And then there is the global momentum around addressing methane emissions from the energy sector.

Stone: What are the specific sources of leaks along the oil and gas value chain that really need to be focused on?

Ravikumar: There are broadly three big categories of methane emissions across the supply chain. The first category is venting. These are known methane emissions that happen for safety or other operational reasons. You have flaring, which is when you don’t have an ability to capture your methane and put it into a pipeline. The safest way to dispose of it is to burn it at the site where it’s generated, and that’s flaring. And then the last bucket is fugitive emissions. Fugitive emissions are a class of emissions that correspond to unintentional sources of methane. These could be leaks because things break, and things break because things are old. There is wear and tear of various equipment that is used across the supply chain, but these are leaks that happen intermittently, that happen at times that you cannot predict, and therefore you need a comprehensive program to find out where these leaks occur and fix them.

There are also other kinds of fugitive emissions that happen. For example, equipment that is supposed to operate in a specific way does not operate like that, so there are malfunctions. There are operator errors, and there are maintenance activities that release emissions, all of which come under this class of fugitive emissions that can be addressed through various approaches.

And so for each of these buckets — venting, flaring, and fugitive emissions — you need different types of approaches to minimize them or reduce them. For venting, one approach is thinking through different ways to create and generate the same amount of oil and gas. For example, you can switch equipment that emits a lot of methane to equipment that does not emit any methane. A common class of sources that emit methane are called pneumatic systems. These are used across the industry. One of the largest sources of methane emissions — currently a lot of pneumatic systems are operated using natural gas, but you can use the same pneumatic system using compressed air. Compressed air, being air, there’s not any methane. So you see a lot of operators doing things called “equipment replacement programs” that eliminate various sources of vented methane emissions.

For flaring emissions, we have to have zero routine flaring. In fact, the EPA regulations require that there is zero routine flaring, which means that you cannot just burn natural gas. You have to capture it and put it into a pipeline.

And then the last bucket are the fugitive emissions for which we need comprehensive leak detection and repair programs that take advantage of all the innovation that we are seeing around methane detection technologies and deploy them so that you can find the leaks immediately or as soon as they occur and fix them.

Stone: I think one of the key points here, particularly in the Methane Emissions Reduction Program, is that it includes the requirement that emissions be directly measured, i.e., empirical data be submitted to regulators. And this is a very significant change. John, how have methane emissions been measured to date, and how have those practices impacted our understanding of the magnitude of methane that is escaping into the atmosphere?

Quigley: That’s a great question. The short answer is we’ve estimated them, and that has resulted in grossly underestimating the problem. Up until now, the data on methane emissions that EPA and state regulators relied on were based on industry, self-reported engineering calculations — so not direct measurements at any kind of meaningful scale. And there have been a lot of papers written over the last several years that attempted to measure through various means the emissions in different oil and gas basins, like the Permian in Texas or Marcellus in Pennsylvania. That research, as a body, is showing that actual methane emissions from oil and gas development is far larger than what companies are reporting.

So the official estimates, the official inventories that government is basing policy on, severely underestimate the scale and size of the problem. In my view, given especially the potency of methane that Arvind talked about as a climate-forcing gas, it simply cannot be acceptable for even better estimates, refined estimates to be the basis of emission inventories or to demonstrate compliance or to develop regulatory approaches.

Monitoring technology class and ubiquity barriers are quickly being overcome, and what’s needed as soon as possible — and the EPA, in my view, has taken a huge stride in this direction — is actual measurements from ubiquitous, continuous monitoring sources, using suites of the latest detection technologies from hand-held optical devices to aerial surveys to satellites. The data that’s coming from those instruments should be the prerequisites for proof.

So again, EPA has taken a huge step in this direction. Technology continues to evolve, but we’ve got to really focus on getting this kind of technology in place broadly, and base policy on actual measurement of emissions, rather than estimates.

Stone: So as both of you have noted, we’ve entered this era of very rapid innovation in the measurement and monitoring technologies. I guess that really comes out of the fact that so much more attention is being paid to methane, and that there are regulations to back that attention up. Arvind, I wonder if you could tell us a little bit more — and John just kind of introduced this — but more about the different types of monitoring and the role that each plays in understanding the amount of methane that’s emitted?

Ravikumar: One of the biggest developments in the methane space is the availability of new technologies that promise cost-effective methane emissions detection and therefore mitigation. One of the most interesting aspects of this problem is that there is a whole range of technologies available. So if you think of it as how far from the ground do you deploy these technologies, there are at least four different classes of technologies.

The first one is our technologies that are deployed on the ground. So you fix this on your facility, and it monitors for methane emissions. There are different ways of doing this. There are infrared cameras which are hand-held cameras that you walk around the facility with, looking through the camera. It makes methane visible, so you can see if there is equipment that is leaking.

A similar class that is one the ground are continuous monitoring systems. These are very much like smoke alarms in our house. There you install them on the site, and if there’s a very large methane leak, the sensor would send an alarm to the operator to come and fix whatever the problem is.

The next level are drones. These are sensors that you mount on drones, and you can fly around individual pieces of equipment to measure what the emissions from that equipment are. These things can be quite useful, especially at large and complex facilities, where physical access to certain parts of the facility or certain types of equipment could be quite challenging. For example, it’s not all that convenient for someone to go up a ladder on top of a storage tank that stores natural gas liquids or crude oil. In those cases, drones might be very effective in detecting and quantifying what the methane emissions are from those tanks.

If you go about one level, that would be aircraft, so you have various kinds of sensors mounted on aircraft, and they fly around, detecting and quantifying methane emissions. There are different types of aircraft that do this. You can go from facility to facility to measure emissions. You can also do what’s called “aerial mass balance emissions measurement.” What it does, it tells you not what is the methane emission from an individual facility, but what are methane emissions across an entire region?

For example, the Marcellus region covers Pennsylvania and parts of Ohio and West Virginia. You can get regional estimates of methane emissions using aerial measurements. The advantage of aerial measurements is that they are fast. You can cover hundreds of facilities in a single day, and therefore you have the ability to cover vast production regions and measure methane emissions and monitor them more frequently because each survey now takes a much shorter time than if you have to go on the ground to each of those facilities.

Stone: It sounds to me like when you’re looking at the aerial monitoring, you can see a much larger area, but you may be getting much less specific or accurate data on the level of actual leaks that may be happening in a certain location. How does that jibe with the requirement for empirical data, and I would suppose greater specificity going forward, in terms of our knowledge of these leaks?

Ravikumar: That’s right. That’s a very good question. Part of the thing is thinking through: What are you using this technology for? And depending on your application, you might want to choose one technology or the other. I’ll give an example. If you’re looking for what’s called “super-emitters.” Super-emitters are well known in the field. What it refers to is these very large methane emissions that we measure as we do these measurement campaigns, but they occur very rarely. So if you measure, say, a thousand facilities, only 50 of them are likely to have super-emitters. If you want to catch these super-emitters because there are really big emissions, and you want to reduce them, you have to be able to find these super-emitters as quickly as possible. But how do you pick 50 out of 1,000? The only way you can get to those super-emitters quickly is if you have a monitoring technology that can help you cover those 1,000 facilities as quickly as possible.

And so in this example, you want to use technologies that have high speed, even if it does not have high spatial resolution to tell you exactly which valve or which flange is leaking. You want high speed so you can go to each of those 1,000 facilities and find out which of them are super-emitters. This is the exact reason for the potential use of satellites in this space. Satellites, as you know, go around the world and monitor methane emissions around different parts of the world. One of their key advantages is they can quickly identify hot spots from space, looking at where are the biggest sources of methane?

You are absolutely right. Of course they’re not going to give you exactly what site or what specific equipment is leaking, but it tells you, “Hey, you have to go to this GPS coordinate in Southwest Pennsylvania that’s emitting a lot,” and then that gives us information to focus our ground-based measurements, our aircraft measurements just to that region. So different applications will require different resolution of information.

If you want to update, say, an official greenhouse gas emissions inventory like the EPA does in the US, yes, you need data at a much higher spatial resolution for which you will use certain technologies. But if you are looking to find and fix your super-emitters as fast as possible, then you have to use other technologies where speed is much more important than the spatial resolution of that technology.

Stone: One of the most high-profile attempts to understand methane emissions over the last few years has been the Environmental Defense Fund’s MethaneSAT, which is a satellite that has the capability of finding, and to some degree, measuring methane emissions. How effective is that satellite? What types of data does it give? And where does it fall in the spectrum of these technologies?

Ravikumar: The last suite of technologies that help us with methane emissions’ detection and quantification are satellites, and there are different kinds of satellites, of which MethaneSAT is one of them. I believe it was launched a couple of months ago and will start making data publicly available in the near future. So the advantage of satellites can be several-fold. One of the things satellites can do really well is, as I just said, identify hot spots of methane leakage.

If you fly over the Permian Basin or the Marcellus Basin, you’re going to identify a group of facilities or a certain part of the basin that have high methane emissions. And satellites are one of the best tools available to us to survey very large areas relatively quickly. And so that’s something satellites like MethaneSAT could do, and help us focus efforts of mitigation to regions that have high methane emissions.

The other use of satellites is thinking about validating what we are measuring and finding on the ground. One of the things that has been a scientific challenge in the community, not just in the US, but around the world, is thinking about how do we know what we are measuring is accurate? Is one technology accurate? Is a second technology — if it gives you a very different number — which of those technologies are accurate? And which one should you believe?

So one of the potential use cases of satellites is being able to validate other types of measurements. Let’s say I go out with an aircraft and measure emissions over a thousand facilities in Southwest Pennsylvania. I have a number for each facility. I can add them up. I can get a regional total of methane emissions for that region. But how will I know that number is correct? I need independent verification of emissions using a completely independent set of measurements. And that’s where satellites can help. If they come over the region and measure emissions over that region, as we said, they might not give you exactly what an individual site emits, but they can tell you what that region emits. And so you compare what the satellite is telling you, which is an independent measurement of emissions, but what you have measured using our own specific technology.

And so any potential gap between the satellite and what you are measuring then comes back to you, and you have to figure out: Why is there a difference in these two technologies that I’m measuring, and how can we close that gap? So I think satellites as a potential validation for other kinds of measurement is a powerful use case for those technologies.

Stone: And I suppose, if you’re the emitter, then you have to give the reasons for the discrepancy and understand what’s going on.

Ravikumar: Exactly right. In fact, one of the key ideas that has been discussed in the US and around the world is measurements are important, but they are just part and a piece of information that you need to fully understand this issue. The other piece of information is operational data. For example, let’s say a satellite is passing over your facility. It usually takes a measurement in a fraction of a second because they travel fast. If you have been doing some maintenance activity on your site that results in a huge emission, the satellite will see that. But a satellite cannot tell you when that emission started or when it stopped.

What would give you that information is correlating your measurement data with what you know is happening on the site. So then you combine your measurements, the satellite data that says, “Oh, there’s a huge emission here,” with what you know about the site. There was a maintenance, actually, that started at 8:00 am in the morning and that ended at 3:00 pm, so there was a 7-hour emission associated with that event. And so you combine that information to quantify what your methane emissions are for that facility.

Thinking of different pieces of information, how do you bring them together in the manner that helps you get your best estimate for methane emissions? That is the challenge of the hour.

Stone: So John, an interesting question comes to mind here, then. We’re talking about a lot of different technologies that are used to measure methane emissions. Some are aerial. Some are on site, and I’m sure there are a lot of technological differences within those monitors, as well. How can all the data from all these different sources be reconciled and understood and compared? There must be quite a challenge there.

Quigley: That is the question of the day for regulators. I’ll go back to my time at DEP, in 2015, 2016, when I was Secretary — and this is still true today in Pennsylvania. The only technology that was embraced by our regulations at a state level was the hand-held FLIR cameras, the infrared cameras that Arvind talked about. They were costly to use at any kind of scale and gave you limited information. So there was always a need for ubiquitous, large-scale monitoring technology and capacity. That has always been clear. But now there’s a potential to actually achieve that, with all the technologies that Arvind talked about.

The challenge is the regulatory agencies are always playing catch-up to technology. They are always behind. It’s just the nature of the beast. But when you consider now the range of technologies that Arvind talked about, the fixed monitors, airborne equipment, satellite detectors, and how you incorporate all of them and their data into rule-making, there’s a need for translation — translation of the science, understanding the performance characteristics of each of these technologies alone and in combination. Compare them apples-to-apples. But beyond that, just understanding the technology. There were challenges to involve the folks who are going to be using these technologies, the oil and gas industry, and start a dialogue and an engagement on how to incorporate these new technologies and find the cost-effective solutions to reducing methane emissions.

What you need is an analytical tool to enable that to happen, and a process by which that can happen. And that’s where Arvind’s really ground-breaking and important work on tool development and then translation of the science comes in. Arvind developed a tool called “FEAST,” which was actually written into EPA’s regulations last year.

Stone: Into its December, 2023 regulation.

Quigley: FEAST was specifically written into the regulations. I’ll let Arvind explain the tool, but the direct impact of a decision support tool that translates the science and enables users, both in the industry and regulators, to understand the performance characteristics of these various technologies, and that was the key in EPA’s embrace of these new technologies and this new approach to data-driven policy.

Ravikumar: FEAST stands for Fugitive Emissions Abatement Simulation Toolkit. It’s essentially a techno-economic model that compares the effectiveness of the use of different technologies. We talked about continuous monitoring systems, drone-based surveys, aerial surveys, and satellites, but what FEAST does is essentially model the performance of these different technologies, and if you fix the emissions that these technologies find, what are the emissions reductions you’re going to get at the end of three or five years?

So essentially it’s a model that compares the performance of various technologies under regulatory leak detection and repair programs. One thing I wanted to mention, and John brought this up, is that we’re all interested in data. We are all interested in empirical information, in measurements of methane emissions, but at the end of the day, when you want to translate those measurements into public policy — whether it’s the EPA methane rule or the updated reporting requirements — you have to translate the data into information that’s relevant to whatever regulation that you’re looking at.

And FEAST is just one of those models that takes the performance parameters of all of these technologies, puts them into a framework that enables the EPA or an operator or other state regulatory agency to compare the emissions reduction effectiveness of various technologies under different leak detection and repair programs. I’ll give you one example. A common tool of leak detection and repair programs is to require that operators survey their facilities four times a year or once every quarter, using the hand-held optical gas imaging camera that John mentioned a little while ago.

And so the question for regulators and operators is: If I don’t want to use this optical gas-imaging camera, and I want to use an aircraft survey or a drone-based survey, how often do I need to survey those facilities to get the same emissions reductions as I would have gotten when I did the four times a year optical gas-imaging survey? So what this model does is it takes in the performance parameters of the optical gas-imaging camera, compares that to that of the aerial system or the drone-based system and tells you how often you need to survey to be able to achieve similar or equivalent emissions reductions.

Until the FEAST model enabled the EPA to introduce new technologies into the EPA methane rule that could achieve equivalent emissions reductions as conventional approaches to reducing emissions, such as the optical gas-imaging survey. And this is an example of one of the tools that can help us translate scientific data around these technologies into information that is useful in the context of the EPA methane rule. And that’s just one of several tools that they’re developing, because such kinds of tools are necessary for all applications, including the accurate reporting of emissions to the EPA, including identifying and fixing super-emitters, and thinking about how these new technologies form a part of multi-scale measurement programs to help us reduce methane emissions.

Stone: I want to jump to the international aspect here for a moment. Arvind, I want to direct this one first to you. So the US is not alone in addressing methane emissions. In April, the EU adopted its own framework for limiting leaks and flaring. Tell us what’s going on in the EU right now.

Ravikumar: So the EU recently passed legislation around requiring what’s called “a methane import standard.” It’s essentially saying, “If you are going to be selling into the European Union market, mostly in the form of piped natural gas or liquefied natural gas, you have to meet certain emissions intensity targets. I believe these will come into effect starting in 2027, so essentially tying sales of LNG and natural gas into the European market based in part on the emissions intensity of the natural gas supply chains. And this is not just limited to the EU. The EU is the most advanced in terms of developing legislation that would apply to importers of LNG into the European Union, but a lot of big buyers of natural gas, such as Japan and South Korea, are very much interested in reducing the climate impacts of the LNG that they buy. And so here is the global problem that you’re facing.

Every country says that they want natural gas that has low-embedded emissions intensity. And each of them has their own rules around how do you demonstrate that the gas that you’re selling into the European Union or to Japan or to South Korea has low-emissions intensity? And if you have each of those countries specifying very different rules, it’s going to be a huge problem for suppliers, whether it’s the United States or Australia or Qatar, because now they have to look at rules of individual countries on how you can demonstrate low methane emissions for the supply chains.

And so to address this issue and to make sure there’s one common global framework for reporting and demonstrating low-emissions intensity of LNG in supply chains. The US Department of Energy, along with 16 other major LNG importing and exporting countries, is working on developing what’s called “an MMRV framework.” MMRV stands for Measurement, Monitoring, Reporting, and Verification, the idea being very simple. If everyone is interested in low-emissions natural gas supply chains, then everyone should come together and set the rules of the road. Say what exporting countries and exporting companies are made to submit in terms of emissions information that would be acceptable to all of these buyers and help them evaluate the emissions intensities of those supply chains.

This is the work that is done by the US, along with all the other countries that are participating in this effort, in addition to everything that’s happening voluntarily. There are a number of voluntary initiatives that are also geared towards reducing methane emissions, not just in the US, but around the world. An example of that is the Oil and Gas Methane Partnership or OGMP. This is a voluntary program where, through the UN, operators sign onto this voluntary framework of emissions reporting. And so the OGMP program has developed protocols for what kinds of measurements should be done, how the measurements should be reported, and it gives out a grade for operators based on the reliability and accuracy of the emissions data being reported. So there are a number of voluntary initiatives that are trying to get methane emissions reporting consistently across global supply chains.

Stone: It’s called MRV equivalence, right? So everybody sees the data, understands what it means. It’s mutually understood.

Ravikumar: That’s exactly right. And the MRV equivalence is a really, really important concept because one of the big challenges for having anything done globally is consistency across different parts of the world and across different supply chains. If the EU has their own rules on what needs to be measured and what needs to be reported, that is different from what Japan requires, which is entirely different from what South Korea or India require, then we are not going to have a global system that’s consistent — because then operators would be forced to have and maintain several sets of emissions accounting that are not going to be sustainable long-term. So what is needed in this context is a consistent framework of methane emissions measurement, monitoring, reporting, and verification.

How do we know that the rules of the European Union are equivalent to the rules in Japan or in South Korea? It’s through this process of developing a global framework where all of these issues around differences between different jurisdictions are solved, and there is a consistent framework for what suppliers of LNG or natural gas should do to report on low-emissions intensity natural gas.

Stone: Arvind, thank you. I just wanted to make sure, so again, the rules that the EU adopted in April deal with the global gas market. They also have very specific requirements on flaring and venting within the EU, as well. I just wanted to make sure I understood that correctly.

Ravikumar: That’s absolutely right. The EU’s methane framework includes stringent methane regulations for domestic producers, as well, but given that the EU imports a lot of its natural gas, either through pipelines or through liquefied natural gas, a lot of focus and public discussion has been around their requirements for major importers of LNG into the European market.

Stone: Got it. I also want to jump here to the issue of politics and politics around this measurement and verification, et cetera. I’ll note that the rules that we’ve been discussing, the US rules that we’ve been discussing — also, I guess, the EU as well — don’t in any way limit the use of gas, but they do limit emissions into the atmosphere and waste of gas. And they would impose costs on industry to address those issues. Are there any constituencies out there that are notably opposed to the types of regulations that we’ve been talking about?

Ravikumar: There has never been a policy in the history of the United States that had one hundred percent support from all the constituents. So there’s always going to be those that are for a regulation, or those that are against a regulation. But what is different about methane at this time, compared to all the other previous times when we tried to develop comprehensive methane regulation is that a convergence of interests and regulations are at play here. So it’s not just that there are impending EPA methane regulations or the PHMSA methane regulations that are forcing operators to address methane and deploy all these new technologies. Sure, that’s definitely a factor, but that’s one of several factors.

For example, there are concerns around climate change in addressing greenhouse gas emissions associated with fossil fuels. This is at its height here in the United States, compared to even ten years ago. So there is this issue of social license to operate that a lot of oil and gas companies really care about, and part of addressing that is voluntarily reducing methane emissions as a public show of their potential commitment to addressing greenhouse gas emissions from their operations.

But it’s not just that. There is also, as we are seeing in the news several times over the past couple of years, a strong push from investors, especially in investing in their own companies, to reduce the climate impacts of their operations. That has led many companies to voluntarily declare targets on emissions reductions and put out annual sustainability reports on what they are doing to address both methane and CO2 emissions across their operations.

And then there are market forces. We just talked about how the largest buyers of US natural gas in the world, such as the European Union or Japan or Korea, are all interested in low emissions natural gas. So US exporters are now going to be forced to reduce emissions across the supply chain. So when a US exporter goes and tells their supplier upstream, they say, “You have to reduce your methane emissions because that’s what my customers are asking of me.”

In parallel, we have domestic market dynamics, where there has been a lot of interest from utilities and other large buyers for what’s being called “different shaded natural gas,” essentially different shading, different suppliers be used upon the emissions intensity of their production and their supply chains. Utilities in different states have their own emissions reduction goals, and one way of achieving those goals is to ensure that the natural gas that they buy from upstream producers also has low greenhouse gas emissions intensity.

So yes, regulations are important, but there is a whole host of other factors that come into play when it comes to getting the companies to really focus on reducing methane emissions.

Quigley: Yes, the real key, too, when it comes to public policy is understanding all of those levers and, to the extent possible, pushing or pulling them all in the same direction. There are a lot of companies that talk a good game when it comes to environment, social, and governments, ESG, that don’t actually walk the talk. But as Arvind said, there are forces out there that are helping to push in the right direction, and I think the key for public policy is to make sure that we’re leveraging those forces as much as possible.

Stone: I want to add here, under the Methane Emissions Reduction Program, $850 million recently was made available by EPA and DOE, specifically to help small oil and gas operators reduce their methane emissions. And I believe that one of the concerns had been these smaller operators may not have the financial resources to address their emissions, and they might be a source of opposition to some of the regulations. It sounds like this money is meant to address that.

Quigley: Yes, and I think that’s an important point. I’ll speak from personal experience, for example. In Pennsylvania we have a conventional gas industry. I’ll call them the “mom-and-pops,” the much smaller companies that certainly don’t have the means to reduce their methane emissions just because of the economics of their industry. But on the flip side, they have outsized political influence, and they have been able to forestall some meaningful environmental policy improvements.

So it’s my hope that the MRV program and the kind of funding that the Biden administration is making available for these purposes is going to help propel public policy in the right direction.

Stone: John, the energy industry has attempted to police itself when it comes to emissions, notably through what are called “voluntary methane certification frameworks.” Where do these fall in regards to the government initiatives we’ve been discussing, and are they of value?

Quigley: Well, I’ll say kind of as a general statement, that I’m wary of a lot of the voluntary efforts, whether it’s here, or whether it’s carbon credit certifications, carbon trading mechanisms. They’ve all proven to be less than meet the eye. In fairness, voluntary efforts by companies can be important, but really when it comes to environmental protections and things like methane emissions in climate change, sincerity is always subject to proof.

I’ll give you an example. I had discussions when I was Secretary of the DEP back in 2015 with some industry leaders, some very well-intentioned industry leaders from the oil and gas sector on a voluntary initiative called the “ONE Future” coalition. That really came together, and their goal was to significantly reduce the methane intensity gas production. And they were serious about it. This was not IWASH. This was not PR. This was a serious effort by the members of the ONE Future coalition.

I thought it was a great idea, but my issue with it at the time was how do you measure your emissions to prove that you’re reducing intensity reductions, that you’re producing those effects? At that time, certainly there wasn’t the kind of monitoring technology that is available today, and that was frankly the Achilles’ heel of that effort. But the recent explosion in technology that Arvind has talked about, that really provides the means to empower serious voluntary industry efforts. So I’m hopeful that more will be embraced, but more importantly, in my view, again because sincerity is subject to proof, and because behavior of companies varies for a lot of different reasons — for mom-and-pops to the oil and gas majors. Technology is now allowing regulators to more accurately measure and monitor compliance.

So I think a healthy combination of the two, voluntary actions and regulation, is important. But at the end of the day, the buck stops at regulatory action. That is the safeguard. That is the backstop that is going to protect the climate. And that’s really where I think the emphasis needs to be, on strong public policy.

Ravikumar: I strongly agree with John. I think there is no substitute for comprehensive regulations to address methane emissions or any greenhouse gas emissions. I think these voluntary initiatives are nice. They are important to get the market to go beyond what regulations require, but they are not a substitute for regulations.

Stone: Arvind and John, thank you very much for talking.

Quigley: My pleasure.

Ravikumar: This was great.

Stone: Today’s guests have been Arvind Ravikumar, Co-Director of the Energy Emissions Modeling Lab at the University of Texas at Austin, and John Quigley, a Senior Fellow with the Kleinman Center.   

guest

Arvind Ravikumar

Co-director, Energy Emissions Modeling Lab, University of Texas at Austin
Arvind Ravikumar is co-director of the Energy Emissions Modeling Lab at the University of Texas at Austin. His research group, the Sustainable Energy Development Lab, focuses on developing technical, social and policy solutions to effective climate action in the global energy sector.
guest

John Quigley

Senior Fellow, Kleinman Center
John Quigley is a senior fellow at the Kleinman Center and previously served on the Center’s Advisory Board. He served as Secretary of the PA Department of Environmental Protection and of the PA Department of Conservation and Natural Resources.
host

Andy Stone

Energy Policy Now Host and Producer
Andy Stone is producer and host of Energy Policy Now, the Kleinman Center’s podcast series. He previously worked in business planning with PJM Interconnection and was a senior energy reporter at Forbes Magazine.