This week’s episode of Cleaning Up is a deep dive into the murky world of methane leakage.
I kick it off with a backgrounder on why fugitive emissions are a BFD, followed by a conversation with my Harvard Business School friend Grant Swartzwelder. Texas-based Grant is now CEO of OTA Solutions and co-founder of ESG Dynamics. That means he spends all day, every day - along with his team of 80 - working with oil and gas companies across Texas, Oklahoma and New Mexico, finding and fixing leaks, and helping them manage their data.
Here are a few of my takeaways:
All leaks are not equal. There are big ones and small ones; leaks from gas wells and oil wells, orphan wells and newly drilled wells; leaks from routine operations and emergencies; leaks from facilities owned by well-run companies and rogue companies, multinational owners and mom-and-pop owners; leaks from upstream, midstream and downstream operations; there are leaks that aren’t even methane but other hydrocarbon gases. Addressing all these different leaks will require multiple engineering solutions, multiple financing solutions and multiple policy solutions.
The problem has built up over many decades and will take many decades to resolve. There are millions of facilities, even more equipment, all with dozens of potential leak sites. There are hundreds of thousands of orphan wells, and millions of wells whose economics do not support the cost of leak elimination. Action is not yet on the scale required to fix the problem, and prioritisation will be key.
The data is woefully inadequate, but improving fast. The fact that the U.S. EPA estimates that just 0.93% of methane is escaping upstream and midstream, while respected academics say it is over 3% is quite extraordinary in this day and age. This range of uncertainty cannot survive long in the age of MethaneSat and space-based monitoring. But satellites cannot narrow down leaks to individual wells, let alone individual valves, so planes, drones, thermographic cameras and sensors are needed - and lots of them - along with data lakes and AI to interpret all that data.
Dealing with leaks will have political and social impacts and there will be colossal opposing forces. Smaller operators – collectively employing hundreds of thousands of people and keeping small-town economies afloat – may not be able to afford to deal with leaks. Ignoring this will be disastrous, acknowledging it does not make it any easier to deal with. Think of that the next time you see Just Stop Oil protestors demanding a Just Transition. Are we prepared to buy out those operations?
If you think eliminating fugitive emissions in the U.S. is a challenge, imagine trying in Tajikistan, Azerbaijan, Russia, Iran, etc. But wait: the U.S. is unique in having such fragmented well ownership by a demographic with such a disproportionate amount of political power. It may end up being easier to sort out a smaller number of larger production facilities in authoritarian countries – but of course only if the state is prepared to take the problem seriously. Food for thought.
In any case, it’s an eye-opening conversation with someone on the front-line of the fugitive emissions problem. Hopefully, the advent of pervasive data, sensors and AI will help us reach a very different place in ten years. Meanwhile, before you decide that the methane leakage problem is all about a small number of Western oil and gas majors that need to be forced to do the right thing, listen to the episode.
To listen to the interview with Grant Swartzwelder, visit cleaningup.live, search for Cleaning Up on your podcast platform of choice, or watch the video on YouTube here.
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