Whatever you want to call it—shame campaigns, sneak peeks inside windows of operations or intense scrutiny for transparency’s sake—the spotlight is on oil and gas companies when it comes to methane emissions.

And the data is being made publicly available.

Satellites are watching. The government is watching. Environmentalists and other concerned individuals are watching. Potential oil and gas investors are watching.

The attention comes as the U.S. rolls out methane regulations, even though they are exasperatingly incomplete.

With these programs, “you’ve armed a group of people that are not necessarily focused on improving the problem.… They’re utilizing this information and this data to go to the individuals that want to provide new capital [for oil and gas] but are a little bit hesitant to do so to convince them not to do it,” Dan Romito, consulting partner for Pickering Energy Partners, said during Hart Energy’s DUG GAS+ Conference & Expo.

While proponents of such measures say the focus will help pinpoint problematic areas and even highlight successful mitigation efforts for some, others fear it is another attempt to eliminate the industry. Regardless, accurate data is needed alongside economic solutions to work toward a common goal of reduced emissions.

“Operators and the oil and gas industry as a whole right now [are] saying, ‘Ok, what can I do?’ There’s a lot of noise. ‘Well, how do I move forward? How do I eat an elephant?’” asked Bunkie Westerheide, vice president of commercial development for Kathairos. “Well, you start chewing and the best first bite you can take is in those inventories. Go around your operations, count the number of devices, try to get an understanding of the situation internally before an external understanding of your situation is projected onto the company.”

Kathairos, which provides methane emissions reduction technology, is focused on pneumatics—the top methane emissions source for oil and gas.

Emissions down, pressure up

The oil and gas industry has lowered its average methane emissions by nearly 66% across all seven major onshore producing regions from 2011 to 2021, according to the American Petroleum Institute.

However, the sector, according to the U.S. Environmental Protection Agency (EPA), remains the largest industrial source of methane in the U.S.

Why does it matter?

Methane, the largest component of natural gas, is a potent greenhouse gas that traps heat and contributes significantly to global warming. Its warming impact is 86 times stronger than CO2 and it has an atmospheric lifespan of about 12 years, according to the Climate & Clean Air Coalition. Methane is a known precursor gas to ground-level ozone, which can be harmful to humans, plants and materials depending on exposure levels.

Regulators have taken aim at the so-called “super pollutant” with the EPA’s final methane rule announced in December 2023. The requirements include elimination of routine flaring of natural gas that is produced by new oil wells. It mandates monitoring of methane from well sites and compressor stations; and it sets standards that require reductions in emissions from high-emitting equipment such as controllers, pumps and storage tanks.

The rules also require periodic inspections of well sites and compressor stations for methane leaks and gives third parties a way to monitor large methane releases and report them—via the Super-Emitter Response Program.

Public shaming

MethaneSAT, a satellite developed by the Environmental Defense Fund, researchers at Harvard University, Ball Aerospace and others, was launched in March to monitor methane emissions in oil and gas basins.

“This is publicly available [data] and they will shame you,” Romito said. “That is a real thing now. That is a part of everyday life from the oil and gas space.”

Emissions data is being factored into M&A and reserve-based lending, added Westerheide, speaking on risks besides environmental hazards. “There’s no doubt that this is going to end up in the financial reports whether assets get sold, divested or acquired,” he said of emissions data.

The methane tax, Romito added, is a “liability on the balance sheet.” Making the situation more frustrating, he said, as the industry awaits guidance on Subpart W of the regulations.

Subpart W of the EPA’s Greenhouse Gas Reporting Program pertains to owners or operators of petroleum and natural gas systems that emit 25,000 metric tons or more of GHGs per year. Revisions in Subpart W could “make life even harder,” he said, pointing out how the presidential election could shift regulations.

“The cost of retrofitting is very expensive, but there’s a reputational risk at play because if you underplay what that methane accountability is going to be, even if you do it on accident, once again, you run the risk of actually enhancing the risk profile,” Romito said.

Play defense

Romito suggested companies play “really good defense,” push for empirical data and provide datasets that reflect economic reality.

Westerheide said what will drive value for operators and the industry “is the ability to produce empirical data while you’re producing that informs the next step that you take for your reduction.”

Some solutions are economic today, enabling them to be implemented first, he said.

Standardizing industry terms and definitions within the industry could also help, Westerheide said, pointing out initiatives such as the Oil and Gas Methane Partnership 2.0. OGMP is a partnership of oil and gas companies, international groups and governments working together to cost-effectively mitigate methane emissions.

“You leave it to those outside maybe with other motives or agendas, you’re going to get a definition,” he said. “So, we need to be on the front lines talking about that definition of clean gas and dirty gases.”

Turning back to the methane rule, Romito said the industry must remain realistic. The odds are that it is not likely to go away regardless of who is in office, he said. “This is something that you’re going to have to prepare for in perpetuity.”

On a positive note, Westerheide said the industry is collaborating.

“If a solution works, operators are talking about it with each other,” he said.