Here are the best methane emitters in the United States. Some will surprise you.
As the global oil and gas giants face increasing pressure to reduce their fossil fuel emissions, small private drilling companies are becoming the country’s biggest emitters of greenhouse gases, often by buying back very strong assets. industrial pollutants.
According to a new analysis of the latest emissions data disclosed to the Environmental Protection Agency, five of the industry’s top ten emitters of methane, a particularly potent gas for global warming, are producers of low oil and gas. known, some backed by obscure investment firms. , whose environmental footprints are extremely important in relation to their production.
In some cases, companies buy highly polluting assets directly from the largest oil and gas companies, such as ConocoPhillips and BP; in other cases, private equity firms acquire risky oil and gas properties, develop them and sell them quickly for maximum profit.
The largest emitter, Hilcorp Energy, reported nearly 50% more methane emissions from its operations than the country’s largest fossil fuel producer, Exxon Mobil, despite pumping far less oil and gas. Four other relatively unknown companies – Terra Energy Partners, Flywheel Energy, Blackbeard Operating and Scout Energy – each said they emit more gas than many heavyweights in the industry.
These companies have largely escaped public scrutiny, even though they have become major polluters.
“It’s amazing how small operators manage to be a huge part of the problem,” said Andrew Logan, senior director of oil and gas at Ceres, a network of nonprofit investors that commissioned the ‘study with the Clean Air Task Force, an environmental group. “There’s just no pressure on them to do things better. And being a clean operator, unfortunately, is not a priority in this business model.
Hilcorp spokesperson Nick Piatek said the company “is spending significant capital on modernizing and refurbishing aging equipment” at its newly acquired sites and that its investments will ultimately reduce emissions while extending the lifespan of these assets. “We inherit these shows,” he said.
Analysis, conducted by energy consulting firm MJ Bradley & Associates using data companies are required to submit to the EPA’s greenhouse gas reporting program, highlights climate consequences methane.
The main component of natural gas, methane can heat the planet more than 80 times more than the same amount of carbon dioxide over a 20-year period if it escapes into the atmosphere before being burned. A recent United Nations report identified the oil and gas industry as having the greatest potential for reducing its methane emissions, and the Biden administration is in the process of reinstating methane regulations loosened by President Donald J. Trump.
Blackbeard Operating said a recent review found the company overestimated its emissions to the EPA and would update its numbers soon. He said one of Blackbeard’s top priorities was to reduce emissions from its operations. Terra Energy declined to comment. Flywheel Energy and Scout Energy did not respond to requests for comment.
The analysis also comes with some important caveats. EPA data, as of 2019, includes emissions from drilling and hydraulic fracturing sites, but excludes emissions from offshore drilling, as well as parts of the oil and gas supply chain such as pipelines or oil rigs. processing plants. Recent research has shown that official data is likely to significantly underestimate actual emissions from oil and gas production, in part because it does not properly account for equipment leaks, which can be a source significant emissions. Poorly maintained sites often mean more leaks that go undetected any longer, making them very polluting.
Still, the results allow for comparisons between producers in a way that other emissions disclosures do not, highlighting how much greenhouse gas emissions can vary between operators, experts said.
“A comparison is only as good as actual data at the company level,” said Drew Shindell, professor of earth sciences at Duke University and lead author of the United Nations report on methane. “Having said that, I think it’s interesting that some of the various high emission intensities are coming from quite small players that hardly anyone has probably ever heard of.”
EPA spokeswoman Enesta Jones said the agency “is still working to improve and develop” the means to track broadcasts.
The new analysis also shows how, as the oil and gas giants begin to move away from fossil fuels for a long time, they are handing over some of their most polluting assets to companies that offer almost no transparency in their operations.
“You have an industry that, in a sense, is managing its decline,” said Kathy Hipple, professor of finance at Bard College. “It’s going to be ugly.”
When ConocoPhillips sold its old gas wells in the San Juan Basin, northwestern New Mexico, to Hilcorp Energy in 2017, it got rid of a struggling and aging operation that had weighed on its results. The fossil fuel giant has also got rid of very polluting assets.
That year, ConocoPhillips reported that its greenhouse gas emissions had fallen by about 20%. In 2018, she became a founding member of the Climate Leadership Council, a coalition of companies calling for a carbon tax.
But these shows did not just disappear. Hilcorp Energy, owned by Houston-based billionaire Jeff Hildebrand, was one of the top polluters, according to EPA data.
Hilcorp, which grew by buying decades-old oil and gas assets, has the highest methane emissions in the country, despite being the 13th largest gas producer, according to the new analysis. Hilcorp’s methane emission intensity, or leak rate, was almost six times the average of the top 30 producers, in large part because of high emissions from its aging San Juan operations.
“So nothing has changed from a climate point of view, although it has certainly made ConocoPhillips much more beautiful,” said Logan de Ceres.
ConocoPhillips said it was unable to comment on the accuracy of the analysis, but also said the company has emission reduction targets consistent with the Paris Agreement target of maintaining the global temperature rise to less than 2 degrees Celsius above pre-industrial levels.
The offloading of aging and highly polluting assets by large fossil fuel companies is very likely to intensify. Rystad Energy, an Oslo-based energy consultancy, predicts that by the end of the decade the world’s largest oil and gas companies will divest more than $ 100 billion in assets as they grow. adapt to the energy transition. Last year, Hilcorp bought BP’s oil and gas business in Alaska.
“The global energy market is on the brink of a major shift to cleaner energy sources” and the oil majors are looking “to dramatically streamline their portfolios,” Rystad analysts said last year. “As a result, several billion dollars in assets are about to change hands.”
Terra Energy Partners, backed by investment fund Warburg Pincus, joined the hydraulic fracturing boom in 2015 and has grown to become one of Colorado’s largest natural gas producers.
Companies like Terra aimed to make a quick buck by buying oil and gas production sites, ramping up production, and selling them for a net profit. But these companies have struggled because an overabundance of production has caused natural gas prices to plummet. The Covid-19 pandemic has plunged the sector into further disarray.
To address this, Terra reduced operating expenses at its oil and gas production sites by approximately 30%, enabling the company to generate significant cash flow and return capital to shareholders. despite low natural gas prices. Terra now ranks fourth in the industry in methane emissions, ahead of fossil fuel giant BP, despite producing less than a fifth of its output. Warburg Pincus declined to comment.
Terra’s private equity firms, Flywheel Energy, Blackbeard Operating and Scout Energy, are also among the top ten emitters of methane. Overall, the 195 smallest producers included in the report collectively represent only 9 percent of production, but they are responsible for 22 percent of total reported emissions. Bankruptcies have also increased, raising concerns about a growing number of orphaned and abandoned wells.
Now, as oil prices rebound, there are fears that these privately funded companies are trying one last step to get the most out of their investment. Private shale drilling and fracking has been a major driver of the recent increase in oil and gas drilling in the United States.
“When profits are reduced, cash flow is reduced,” said Ms Hipple, Professor Bard, “safety protocols, pollution, are not being followed as they should be.”
Of course, large producers remain large emitters. For overall greenhouse gas emissions, Exxon Mobil reported the highest numbers in the industry in 2019, a record that is expected to become a top priority as the company grapples with two directors focused on the climat recently elected to its board of directors by shareholders increasingly wary of its exposure to the climate. risks. Many oil and gas giants have joined voluntary industry-wide initiatives to reduce emissions.
Experts point out that leak detection and monitoring technology has become more sophisticated in recent years, and scientists plan to use satellites soon to monitor methane emissions from space in real time. Replacing obsolete equipment that uses gas pressure to run equipment at sites that have no electricity would also reduce methane releases, as would better maintenance of storage tanks and compressors, and elimination of flaring and ventilation.