Big Gas fumbles GAO report on leaking methane....
The 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 listened 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 like 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.
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 Sam'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 about 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.
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