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Big Gas fumbles GAO report on leaking methane....

 lgogThe Government Accountability Office has weighed in with its own report on methane leaks.  Big Gas had a field day minimizing the importance of the report.  It must have seemed so easy.  In the process they inadvertently confirmed enough details to finish off the “green” reputation of natural gas. 

The trap they fell into may even have been laid out for them by GAO. All reports I’ve seen do not cover it this way.  I thought I would. 

 For instance, Greenwire used this headline:  “U.S. loses royalties as drillers vent methane”.  The New York Times posted it under its banner.  Most news outlets used an Associated Press report and its headline:  “GAO: Lost natural gas costs gov’t $23 million per year” 

 Kathleen Sgamma, an industry spokesperson working for the Western Energy Alliance, was quoted in the AP story saying “its pretty miniscule”.  AP summed up other things she said and used another quote. Sgamma was not happy. 

 She told me the A.P. reporter quoted her “out of context”.  I wonder.  As I listenedtrap to as much of her line as I could take it was crystal clear that the industry position is not that GAO has blown the problem up to 30 times larger than it is

 Industry is responding to the description of the problem as GAO states it.  It minimizes the $23 million by comparing it to the $9 billion industry pays in royalties to Treasury every year.  Some analysts convert the $23 million to cubic feet of gas and compare that to the total US production.  I think this is how TEC’s Geoff Styles got his low figure.  If you do that you get a tiny amount:  0.2%.  It’s not a valid way to look at the data as I will show. 

 Whatever, industry is not disputing that they could recover enough lost gas so Treasury would indeed be able to collect its $23 million. 

 Now one sentence from the GAO report makes it clear that when it comes to leaking gas, there are two very different versions of reality:

 In one reality there are “operators”, i.e. the industry, who told the Department of Interior “that about 0.13% of produced gas was vented or flared”.  In the other reality  “estimates from U.S. EPA and the Western Regional Air Partnership showed volumes 30 times higher”. 

No one is reporting what industry says if you ask them why there is this colossal difference.  Maybe no one is asking. 

 As industry minimized the $23 million the GAO reported, they did not notice that GAO got that $23 million based on the reality they’ve been denying for more than a decade, i.e. that place they pretend doesn’t exist where leaks are 30 times greater than what they’ve been telling the government. If industry actually understood what GAO was saying, they would have countered by saying the missing royalties amount to less than $1 million.

This industry is in danger of stumbling Through the Looking Glass, and likealice Alice, they’re going to find that the reality here is quite different than what they are used to.  Here in the place where all this methane leaks into the atmosphere where it adds to the forces driving climate disruption,  their product, produced in the way they’ve been doing it up to now, is not “green”.

 The GAO said Treasury could get an additional $23 million because EPA estimates that there is 50 billion cubic feet of gas that can be economically recovered that is just wasted now.  The GAO says, if off the shelf equipment that would be profitable for operators to install was employed to capture that 50 billion cubic feet, not only would the operators pay back their investment in months or at most several years with solid profits accruing after that, Treasury would be enriched to the tune of that $23 million a year. Everybody would be better off, including the planet.  GAO even mentioned “greenhouse gases” in the title of its report. 

toilet roll

 They handed this framed story to the world on page 1 of their report, and the media that covered it duly reported it that way:  ‘Lost natural gas costs gov’t $23 million’.  After I read the footnote on page 25, I saw that someone has to frame this as Big Gas Hammers Climate

Because most gas is extracted on state and private lands, and because GAO and EPA agree that the industry is leaking about the same percentage of gas there as on federal lands,  GAO mentioned in that footnote that EPA told it that there is an economically recoverable 302 billion cubic feet of lost gas if you look at the whole onshore industry. 

  Other industries have had to clean up pollutants that cost them money to clean up. This one can’t be bothered to clean up and make money doing it.  US Big Gas has dragged its feet for more than a decade since the CEO of BP, the second largest oil company in the world, threw in the towel on the denial campaign, announced it would support Kyoto, and made it clear that from now on it would be cooperating on climate action.  Lord Browne, then CEO of BP spoke in Berlin in 1997:  “I’ve been struck since I first spoke on this subject… by the degree of support there is within our company for a constructive approach – an approach which doesn’t start with a denial of the problem, but rather with a determination to treat this as another challenge which we can help to resolve”.   See my post “Oil industry expose:  what it took to wake some of them up on climate” for an eye opener if you think all oil companies are the same.  BP wasn’t just shovelling out the PR – check the GAO graph at the bottom of this post for an independent comparison of leaks on BP US operations vrs just about anyone else. They started taking action. 

 I called GAO:  they said “we try not to be shortsighted.  Obviously the greenhouse gas linkage is important”, but they didn’t recommend that industry be forced to stop leaks for any other reason than economics.  I pointed out no one is going to keep rising seas out of South Florida even if they want to because the ground is so porous.  I didn’t have the data on the tip of my tongue, but this OECD study says Miami will suffer more financial loss than any city in the world. It has $400 billion in “exposed assets” at risk as seas rise as of today, and if development is not controlled in vulnerable areas by 2070 that figure balloons to $3.5 trillion. 

Moving right along: The actual total Big Gas admits it loses every year according to this analysis, because the 302 Bcf calculated so far is only 40% of it,  is 750 billion cubic feet of gas. 

 That 750 billion cubic feet is what the atmosphere sees.  Uncle Samshaking down taxpayer‘s GAO may only be able to officially care about his lost royalties at this time, but some of us have cared about what is happening to the atmosphere for more than twenty years. 

 GAO isn’t trying to provide definitive data.  They are trying to get the industry to waste less of this federally owned resource that could otherwise make money for everybody.  They didn’t say they felt they had the size of the problem nailed.  E.g.:  in another place in the report, page 10, it says  “EPA estimates showed the volume to be 4.2%, and estimates based on WRAP data showed it to be as high as 5 percent.”  5% of US production is one trillion cubic feet of gas.  If you lose 5% of the natural gas as you produce and handle it on its way to market, you are getting close to if not exactly where Howarth is going to tell you that your gas is worse than coal even if its climate impact is viewed over 100 years.   

Yet A.P reported that industry spokesperson Sgamma said Interior should be “spending its time” doing something else other than taking the recommendation of GAO seriously.  GAO recommended to Interior that it ask Big Gas to do something about some fraction of the 4 or 5 % of total US gas production it is wasting.  The industry has to answer to Interior, not GAO. 

 I have the feeling that Big Gas would like Interior to spend its time doing anything else, just as long as people don’t ever get the idea that this can of worms is big enough to explode the “green” reputation of natural gas.  I’ve posted, and posted, and monotonously posted, as I’ve learned more about this. By the way I discovered the big new discoveries of US gas are also radioactive

Interior works through the Bureau of Land Management when it comes to oil and gas on federal onshore lands.  The A.P. reported that BLM “has resisted calls for change, saying the emissions from gas produced on leased federal lands are impossible to link directly to climate change.” 

I sent a query to BLM about this.  I said I’m wondering, did AP characterize BLM’s position clearly or would they like to give me a statement.  I got an instant response and a guy promised to get back to me.  I emailed links to the posts I’ve been doing.  I said Big Gas is risking the reputation that its gas is “green”.  I said this industry looks suicidal to me.  I asked BLM if they could tell me, are they enabling Big Gas as it commits suicide,  or are they going to try to help the industry save itself?

They never got back to me. Headline: BLM Keeps Quiet While Big Gas Lets Out Another Silent But Deadly

One lawyer who has been trying to get Interior, BLM, and the US oil and gas industry to see the light on this for many years is Erik Schlenker-Goodrich who was quoted in the A.P. report cited above.  That GAO again recommends that industry do something (GAO is going over ground it first covered in 2004), Erik says, “Its confirmation of the work we’ve been doing”

 Another way to look at 750 billion cubic feet, or 1 Trillion cubic feet, of wasted gas is to compare its climate impact to coal using the data Howarth and Shindell say is low. 

 Let’s take something that isn’t “pretty miniscule”.  How aboutScherer the single biggest coal fired power plant in the Western Hemisphere, which is Plant Scherer in Lamar, Georgia.  This plant puts out 25 million tons of CO2 a year.  We’ll take our 750 billion cubic feet of lost gas, assume it hits the atmosphere as methane and figure out what fraction of something as big as Scherer  its impact would be equivalent to by using the same obsolete IPCC data the gas industry uses to tell us how benign their product’s climate impact is. 

 This leaked gas has the climate impact of about 12 plants as big as this.  The most productive coal mine in the US feeds the 4 big generators working together at Scherer to enable it to pump out all this CO2.  If we compare the climate impact of what the gas industry inadvertently has admitted to leaking with this fumbled response to GAO, in terms of the climate impact of the average US coal plant, we’re looking at 75 average coal fired plants

 This is “pretty miniscule”?

 I’m glad we’ve got this industry here to put things into perspective for us.

 

I sure wouldn’t want to blow some piddly little leak  out  of  proportion

 

1. GAO supplied the conversion factor I used to convert billions of cubic feet of gas into millions of metric tonnes of CO2 equivalent for use to compare the climate impact of methane emitted to the atmosphere to CO2 emitted by any source.  It is .4045 million metric tons (sic) of carbon dioxide equivalent per billion cubic feet of vented natural gas. 

From page 15, GAO-11-34 “Opportunities Exist to Capture Vented and Flared Natural Gas, Which Would Increase Royalty Payments and Reduce Greenhouse Gases”.  I put the black bracket and “BP” in.  BP is said to dominate activities in the San Juan basin.  OGOR sums up what operators tell lnterior (wink wink), and WRAP was done by people who cared what is going into the atmosphere.  Note how OGOR data even when submitted by BP is designed to minimize the problem. 

San Juan

David Lewis's picture

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Geoffrey Styles's picture
Geoffrey Styles on Dec 9, 2010

David,

We’ve already hashed out the 0.2% figure on another thread, and I’ve put up a lengthy posting using a leakage rate slightly larger than the 3.25% you extracted from the EPA report, for which I gave you a hat tip.  Dragging me into your tirade against the gas industry is uncalled-for; I’m not part of anyone’s response machine.

David Lewis's picture
David Lewis on Dec 10, 2010

For the truth as opposed to the stuff I’m shovelling out, go see the piece by Geoffry Styles, Is Shale Gas Too Good to Be True which is also posted here on TEC. 

I might have put it that way in my post but it was getting pretty long. As I read your comment, it seems you are insulted that I implied you are part of someone’s “response machine”.   What I wrote was this:

Some analysts convert the $23 million to cubic feet of gas and compare that to the total US production.  I think this is how TEC’s Geoff Styles got his low figure“. 

Two sentences previously, I described Sgamma as an “industry spokesperson”.  I used different words, “industry spokesperson”, and “some analysts” to describe two different groups of people.  You took me to be describing one group, i.e. a “response machine”. 

Perhaps the shoe fits

I made the distinction precisely because I did not intend to take you on in debate about whether you are part of, as you say it, the “response machine”.  I referred to you because I had recently read what you had to say.  If I had read anyone else commenting on the GAO who if I mentioned them it might illustrate my point, I would have thrown them in.  I can’t find references to the Sierra Club even commenting on the GAO report – my point had I mentioned them would be if these people are going to tout gas as “green” which they do, one might expect them to show an interest in whether it is green or not.  Perhaps I should have mentioned them and left you out.  A piece can always be better.  You commented on GAO, so I used you as an example of someone else, i.e. there is Styles the energy analyst, in addition to Sgamma the industry tout, who took the report in a way differently than I did.

Google ranks web pieces based on how many other pages link to them.  I thought it could not be an insult to link to your writing.  I won’t do it again. 

After reading one of your detailed pieces on the oil and gas industry I formed the view that your writing would be a good resource if I was interested in learning more about the fossil fuel industry.  You can pack more detail into a well written piece on that subject than anyone I’ve seen. 

For my purposes, I see that more than 80% of the power driving civilization is fossil fuels.  I am concerned about the emissions that result.  I haven’t had a big interest in all the details.

I look at fossil fuels as I look at the cocaine that my brother was addicted to.  So although after my brother’s addiction killed him I studied the literature on cocaine addiction, I wasn’t that interested in the production, refining, transport, distribution, etc, end of it.  So although I recognize that you are the guy I’d go to first for details on many aspects of fossil fuel business, as I say, my concern is centered somewhere else.

Your calculation that even if methane leaks as much as the EPA technical support document says, gas is better than coal, is very far from the last word.  I see GAO thinks WRAP data giving a 5% leak rate for US gas is valid enough they included it in their report.  Do a calculation based on 5% and tell us how that looks. 

Howarth tells me that in his paper undergoing peer review he will be stating he’s found that it is possible that US gas operations result in “5.6% or greater” methane leakage, which he says “means natural gas is still worse than coal at the 100 year time frame”   You’ve insisted the 100 year GWP is your gold standard.  I think even if gas is only worse than coal if viewed over the next 50 years it will be the end of this gas is “green” image. 

Gas, as produced and used in the US today, is not as green as people thought and it may have a greater climate impact than coal even if you did the calculations.  Given the history cited by the industry, i.e. they say they’ve been steadily cleaning up their operations over the last decade, it is clear that the historic use of gas in the US has been worse than coal on the 100 year time frame all this time. 

Or would you now argue that the industry was lying whenever they told us they were cleaning this up?  GAO went over this same topic in 2004.  Industry told GAO at the time: “flaring and venting are not viewed as major problems in this country”.  Nevertheless, GAO said, data collection should be improved.  GAO fell so hard for this “no problem” industry line all it said about actually controlling emissions was they should flare rather than vent.  Industry claimed they were 65% signed up with EPA’s STAR emissions reduction program which has been going since 1993, implying they were hard at it beavering away limiting these emissions.  If the historic use of gas has not been i.worse than coal, i.e. if the venting was lower in the past than it is today, the picture industry has presented to anyone investigating in the past, e.g. GAO, was a lie. 

Are you sure my work bringing this issue to people’s attention is just a “tirade against the gas industry“?

Geoffrey Styles's picture
Geoffrey Styles on Dec 10, 2010

David,

Thanks for the compliment, and perhaps I read too much into your inclusion of my posting as an example of sloppy calculation.  Setting alll the personal stuff aside, I was intrigued by your challenge to see what the higher leakage rates you suggest might mean.  Even taking the 5.6% you say Howarth will report and using a 100-yr GWP of 33, a fairly efficient CCGT still looks about a quarter lower in CO2e emissions than a supercritical pulverized coal plant, as a rough approximation. 

David Lewis's picture
David Lewis on Dec 10, 2010

I’m interested to see what Howarth’s paper will say. 

I can do a few minutes of calculations and you can do a few minutes worth – if the issue of how green is gas gains traction as authorities reassess methane’s importance, and especially as industry intransigence continues, the stakes are so high what you or I say about it will amount to less than a hill of beans. 

Howarth has been working on it with his academic reputation at stake for months now.  He had an added incentive to look harder at every detail than what he’s done on anything he’s ever worked on before, because he was roasted for leaving out methane emissions from coal in his original preliminary work. A reputation for excellence is all an academic has to show for a lifetime’s effort. He’s plunked his reputation down over this and if he didn’t know in the beginning, he knows now that the stakes are higher for him personally than they’ve ever been.  This is a big political issue whether very many see it that way now or not. 

The references I studied of the list he gave me are rock solid. 

Here’s how things may shape up in the public imagination as gas moves from being seen to have a climate impact 50% as great as coal, to being 95% as bad as coal:

 

Notice how even at 50% the climate impact of coal, there are questions about gas as a “destination” fuel.  The next thing you know, at 75% as Bad as Coal, that green color starts to deteriorate no matter how much bleach the industry pours on.  Once you get to 95% as Bad, people don’t even look at the numbers, its just ALL BAD. Look at the “I’d rather glow in the dark” grafitti.  I turned my back for an instant and someone crawled out of the woodwork.  Even if the environmentalist leadership tries to palm off gas at 75% or greater impact as “green” they won’t be able to control their own people. 

Paul O's picture
Paul O on Dec 11, 2010

David,

Do you think that anyone who is not Biased will used the term “Big” ahead of the name of an Industry being targeted?

Even if I were leery of Natural Gas (Methane), and concerned for the same reasons you proffer, the tone of  enthusiastic contempt in your writings is definitely a turn off. 

David Lewis's picture
David Lewis on Dec 11, 2010

I think you’re right that it doesn’t improve the article. 

I was looking for something other than “the US onshore oil and gas industry”, or “the US gas industry” to describe who I was writing about. 

In a mind as tiny as mine, I aim high when I write and no matter how bad the result, I can say I gave it a shot and at some point tried for my best in at least some aspect of it.  So when I looked for an abbreviated way to describe the gas industry, I was attempting to emulate the way a successful writer who doeesn’t crank his gibberish out for free and have to publish in a place like TEC might.  E.g.:  The Economist recently published: “Obama and Big Labour:  Big Labour and Big Government” as a headline on one of their articles.  You’d wonder how many times you could squeeze the word “Big” in.  The Economist may be “Biased” as you say I probably am, but they would defend their use of these terms.  Wikipedia has a page on the Big Three.  I don’t know that anyone has been accused of being against the auto industry because they use that term.  But Wikipedia notes that Big Labour tends to be taken as derogatory by the labour movement.  And there is Big Green

The problem may be that the words “Big Gas” aren’t that commonly used.  At least they felt a bit awkward even as I wrote.  But the other problem is that the issue I’m writing about casts a new light on this industry. What looks crystal clear to me after some research, obviously, may be a new view on things for someone else. 

I come from the environment movement, although I feel estranged enough from it that I don’t call myself an environmentalist except when I want to stress to some of them they don’t define the entire thing.  One founder of Greenpeace once told me I was the most powerful voice seen to that point in Canada on issues greens cared about.  That’s a long time ago.  The path I chose led me to the political wilderness.  Anyway, environmentalists have been giving gas a free ride calling the use of it “green”, and they’ve been dumping on nuclear in an incomprehensible way so much so the nuclear crowd believes all environmentalists are lying charlatans.  I support nuclear because I see it as the best climate solution as opposed to most nuclear types who support it for other reasons, like its such a fantastic concentrated source of power civilization should be taking more advantage of, etc.  I’ve had these horrible clashes with nuclear types as they take out their resentment against all environmentalists on anyone who happens to sound like one who is nearby, i.e. me at a certain point back there.  (I was hanging around the internet in the places only nuke supporters go to try to get a feel for how to advocate for nuclear power).  And I tend to make it easy for people to have strong feelings about me as I insist on speaking the truth as I see it as opposed to giving my considered opinion – sometimes it seems my words get under someone’s skin in a way the same words said by someone else would not. 

So the opportunity to slam gas presented itself, nukes hate gas to a certain point because they can’t understand why greens sell gas and not nukes when they say they’re interested in low carbon, and the prospect of cheap shale gas in the US is a drag on the nuclear renaissance.  Without this context, if it was just my concern about climate and I was looking at methane emissions and the gas industry, I might have written with a bit of a different tone. 

I might not have.  I don’t like an industry that has its touts out flogging their product as green while they tell everyone how great they are at doing what they can about these emissions for the last ten years while data shows, especially as you contrast BP with the rest of the US companies, that they could not have cared less.

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