The cost to reduce methane emissions from natural gas systems is nearly five times greater than previous estimates suggest, according to a study commissioned by ONE Future, a coalition of six US gas industry firms. The ICF International Study concluded that curbing methane emissions from US gas systems would cost an estimated $3.35/Mcf of methane reduced, the group said on June 2.
An official for the Environmental Defense Fund, whose 2014 study provided a marginal abatement cost (MAC) curve model for the new analysis, said the study ONE Future commissioned applied its own set of assumptions. “We always welcome new points of view, but it’s important to note the new calculations change key variables in ways that boost the cost of reducing methane emissions while significantly understating benefits of these reductions,” said Mark Brownstein, a vice-president in EDF’s climate and energy program.
ONE Future—the trade name for Our Nation’s Energy Future Coalition Inc.—focuses on finding policy and technical solutions that yield continually improved methane emissions associated with the production, processing, transmission and distribution of natural gas, information at its web site said. Its members are AGL Resources Inc., Apache Corp., BHP Billiton, Columbia Pipeline Group, Hess Corp., Kinder Morgan Inc., National Grid PLC, and Southwestern Energy Co.
In the new analysis, ICF evaluated methane recovery economics at a $3/Mcf gas cost, ONE Future said. It also used data from the US Environmental Protection Agency’s 2012 emissions inventory as well as updated cost and emission reduction data that was based on ONE Future member companies’ direct experiences, the group added.
“This new study provides cost estimates of methane abatement technologies that are more consistent with current market realities,” ONE Future Interim Executive Director Richard Hyde said. “These findings will assist ONE Future member companies in our shared efforts to reduce methane emissions to less than 1% of total gas production.”
ONE Future said the new analysis updated the list of known emission abatement technologies and provided revised cost estimates for each one. It also provides estimates of the total methane emission abatement potential associated with the various gas industry segments. “At its core, the study incorporates new information on the cost of methane control technologies and practices and the ability of industry to monetize recovered gas,” the group said.
Used companies’ data
ICF updated mitigation technologies’ costs by taking into account data ONE Future member companies provided, the group said. The higher than previously estimated methane reduction costs was due largely to higher assumed costs for leak detection and repair (LDAR) and revised assumptions regarding the ability of midstream segments to monetize the value of recovered gas, it indicated.
“This in-depth analysis—which incorporated field data and extensive consultation with gas producers, midstream operators, and distribution companies—confirms ONE Future’s position that combining a performance target with a flexible pathway toward meeting the shared goal of further reducing emissions, gives companies the right tools to meet methane emissions reduction targets,” Hyde said.
But Brownstein said in his June 3 blog that ICF’s study for ONE Future used 2012 oil and gas figures from EPA’s 2014 GHG inventory, which has been updated twice. “In the inventory published in April 2016, current emissions are about 27% higher than the figures used by ONE Future,” he said.
“Even if you keep all the other assumptions in the report, we estimate that using updated inventory figures would result in a roughly 45% reduction in oil and gas sector methane emissions for a cost of approximately 1¢/Mcf of gas produced, which is squarely in line with estimates in the original ICF analysis commissioned by EDF,” Brownstein said.
The new report also exaggerated compliance costs, particularly for the core process of LDAR, he continued. “This includes excessively high capital costs for equipment like high flow samplers and remote methane leak detectors that are not actually required for regulatory compliance, as well as inflated labor costs and survey times,” Brownstein said.
Contact Nick Snow at firstname.lastname@example.org.