The U.S. Environmental Protection Agency (EPA) recently released its annual greenhouse gas (GHG) inventory report. Using new data and information, the EPA lowered its estimate of fugitive methane emissions from natural gas development by 33 percent, from 10.3 million metric tons (MMT) in 2010 to 6.9 MMT in 2011. While such a reduction, if confirmed by measurement data, would undeniably be a welcome development, it doesn’t mean that the problem is solved.

There are still many reasons why reducing fugitive methane is important. Even better, WRI’s recent analysis finds that we have the technologies and policy frameworks to do so cost effectively.

Here are five big reasons we should care about fugitive methane emissions:

1) Emissions Are Still Too High.

Methane is a potent greenhouse gas and a key driver of global warming. Methane is 25 times stronger than carbon dioxide over a 100-year time period and 72 times stronger over a 20-year period. In fact, 6.9 MMt of methane is equivalent in impact to 172 MMt of CO2 over a 100-year time horizon. That’s greater than all the direct and indirect GHG emissions from iron and steel, cement, and aluminum manufacturing combined. Reducing methane emissions is an essential step toward reducing U.S. greenhouse gas emissions and slowing the rate of global warming.

New Data and WRI’s Working Paper

The authors of WRI’s working paper, Clearing the Air: Reducing Upstream Methane Emissions from U.S. Natural gas Production, chose to publish our research in a working paper format because the natural gas emissions landscape is constantly shifting, with new data and information expected to be published on a regular basis in the months after our paper went to press. The 2013 GHG Inventory estimates that 6.9 MMt of fugitive methane leaked from U.S. natural gas systems in 2011. This implies a leakage rate of approximately 1.4 percent, which is considerably lower than the 2.3 percent leakage rate implied by the last inventory. Clearing the Air was researched and written based largely on data from and reports based on the 2011 and 2012 GHG inventories. As such, if the new inventory data was available at the time we published our paper, our findings would have changed as follows:

  • Our estimate of total upstream GHG emissions (carbon dioxide and methane) from natural gas systems in 2012 would be about 29 percent lower.

  • Our business as usual (BAU) upstream GHG emissions estimate (factoring in the implications of recent EPA rules addressing air pollution from natural gas systems) would be roughly 25 percent lower in 2015 and 23 percent lower in 2035. Note, on a percentage basis, our estimates of the scale of emissions reductions achieved as a result of the NSPS would not be substantially affected by changes between the 2012 and 2013 inventories. This is because the 2013 inventory still estimates that there are substantial methane emissions associated with well completions and recompletions, at least 95 percent of which would be eliminated under the new EPA rules.

  • Our first emissions abatement scenario would yield roughly 40 percent fewer reductions relative to BAU, but would result in roughly the same lower level of total emissions as we originally modeled. This is because new information in the inventory indicates that the opportunity to achieve emissions reductions through the broader use of plunger lifts during liquids unloading operations is actually very limited, since the use of this technology is already common standard industry practice (as would be reflected in a new, lower BAU baseline).

It is important to note that new GHG Inventory data does not impact the policy recommendations in the working paper, which are technology neutral. It also does not impact the strategies that industry and governments can take to reduce these emissions. Furthermore, a 1 percent leakage rate is still a worthy and achievable performance benchmark.

Even with the drop in EPA’s estimate of emissions from natural gas systems, the average fugitive methane leakage rate is still above 1 percent (see text box). Previous research has shown a 1 percent leakage rate to be an important benchmark: Below this rate, switching from diesel to natural gas as fuel for buses and long-haul trucks produces climate benefits over any time horizon. (The equivalent leakage rate for switching from coal to natural gas for electricity generation is roughly 3.2 percent.) It’s important to note that these rates are only benchmarks—not goals. The goal should be to reduce fugitive methane emissions by as much as is technologically and economically feasible.

2) Natural Gas Should Be Cleaner.

Natural gas comprised 29 percent of the U.S. electricity mix in 2012 and is widely used for industrial processes and for residential cooking and heating. The Energy Information Administration projects a significant expansion in natural gas production over the coming decades, increasing by more than 40 percent between 2012 and 2040, with much of that coming from shale and other unconventional sources. WRI analysis has found that for the United States to meet its stated goal of reducing GHG emissions 17 percent below 2005 levels by 2020--to say nothing of the deeper cuts needed beyond 2020--it needs to reduce fugitive methane emissions from natural gas.

3) Reducing Fugitive Methane Emissions Saves Money.

Natural gas is more than 80 percent methane. Lose methane, and you’re losing product. Estimates show that the natural gas industry loses more than $2 billion per year through leaks and venting, but unfortunately, market structures are such that incentives to reduce these emissions are often misaligned.

Fortunately, many technologies that mitigate or capture fugitive methane emissions are cost-effective. Reducing leakage makes economic sense. Policy actions are needed to properly align environmental and consumer interests with business interests.

4) Reducing Fugitive Methane Emissions Doesn’t Require New Federal Legislation.

EPA currently has the authority to set standards for greenhouse gas emissions under the Clean Air Act. The agency’s recent rules aimed at reducing volatile organic compounds (VOCs) and hazardous air pollutants had the added bonus of indirectly reducing methane emissions. Going forward, the agency should set standards that address methane emissions directly, in order to maximize GHG reductions. States also have the ability to demonstrate policy leadership and limit fugitive methane emissions from natural gas production.

5) Emissions Are Still Uncertain.

Upstream GHG emissions from natural gas systems are notoriously difficult to quantify, with many diffuse sources of emissions and scarce measurement data, complicated by the fact that the industry is rapidly expanding and transforming. EPA’s GHG Inventory is the best peer-reviewed data source currently available. However, it still relies heavily on industry-supplied emissions factors and activity data as opposed to independently verified, direct measurements. Plus, the dramatic drop in emissions estimates is attributed almost entirely to a change in EPA’s estimate of methane emissions associated with liquids unloading operations—just one part of the entire natural gas production process. The agency’s primary data source for liquids unloading is a recent industry survey.

More and better measurement data from all stages of the natural gas lifecycle will go a long way toward alleviating uncertainty around the magnitude of fugitive methane emissions. Several studies are underway that will help in this regard. But with more than half a million natural gas wells, hundreds of thousands of miles of pipeline, and thousands of processing plants and compressor stations – plus the huge amount of variation between individual producers – we will never have perfect data. But we know enough to take action to start reducing methane emissions now.

While the EPA’s new data is encouraging, the fugitive methane problem is far from solved. Meanwhile, without policy action, greenhouse gas emissions will continue to rise, and climate change’s impacts continue to be felt. We cannot afford to take a wait-and-see approach. Fugitive methane emissions should be reduced as much and as quickly as possible.

  • UPCOMING CONGRESSIONAL TESTIMONY: WRI's Senior Associate, James Bardbury, will testify before the U.S. House of Representatives Energy and Commerce Subcommittee on Energy and Power this Tuesday, May 7th. Learn more about the testimony, "U.S. Energy Abundance: Exports and the Changing Global Energy Landscape."