Fugitive emissions are a growing concern in the natural gas industry due to their environmental impact on global warming. Methane, which makes up the bulk of natural gas, is 86 times more potent than CO2 over a 20-year period which has operators and regulatory bodies desperate to find new ways to reduce these types of emissions. As seen in Exhibit 1, the U.S. emits 1.1% – 1.6% of natural gas production due to methane leaks. For natural gas to be a more environmentally friendly fuel than coal, it must remain under 3% of current production.
Exhibit 1: U.S. Methane Leaks Percentage and Methane to Coal Comparison
Since these types of emissions typically occur due to poor maintenance, regulatory bodies such as the EPA and PHMSA have passed several regulations to increase federal oversight on natural gas pipelines and facilities. Two of the most recent regulations include the PIPES Act and the Gas Mega Rule. The PIPES Act of 2020 tasked PHMSA to adopt significant safety and methane leak monitoring requirements for LNG facilities, gas transmission pipelines, and gathering and distribution lines. What this means for operators is that they have to incorporate a “risk-based regulatory” approach that is equal to or greater than the required level of safety as well as update their maintenance schedule for the three types of gas pipelines. The Gas Mega Rule, passed in 2020, intensified risk assessment requirements, expanded integrity management to gathering lines and other previously non-regulated lines, and increased reporting requirements. This rule mandates operators to have 50% of pipeline mileage verified by 2028, and 100% of pipeline mileage verified by 2035. These regulations provide a path to reducing emissions, but what are operators actually doing to achieve this?
Operator Strategies:
Natural gas operators such as Kinder Morgan, Williams, and Enbridge have implemented new strategies to tackle emissions by reducing the amount of pipeline blowdowns needed. These strategies include performing hot taps to make new connections or opting into using recompression. Natural gas recompression, or the pumping of natural gas from an enclosed pipeline to a neighboring pipeline that is in operation, has become increasingly popular in recent years due to it becoming more economically feasible supported by new developments in the industry as well as high gas prices. As this technology further develops, we could see operators reduce their methane emissions significantly over the next decade.
While some companies are focusing on using recompression, others such as ONEOK and Marathon are using vapor recovery units (VRUs) to recover methane and other VOCs. VRUs can capture up to 98% of emissions which makes them extremely useful in meeting strict regulations. Exhibit 2 shows a more complete view of operators and their specific initiatives to address emissions.
Exhibit 2: Natural Gas Pipeline Operator Initiatives
Aside from specific technologies, companies across the natural gas industry have implemented new emissions reduction protocols which includes better maintenance practices, enhanced user software, and better monitoring of pipelines. ADI Analytics regularly tracks the midstream oil and gas industry and helps clients navigate the evolving regulatory, competitive, and customer landscape. For more insights into natural gas and midstream, consider subscribing to our newsletter.
– Richard Germana
