Thursday, May 30, 2024

Louisiana energy companies wasted $82 million in natural gas, study finds

by BIZ Magazine

By Wes Muller, Louisiana Illuminator

A new environmental advocacy group analysis released Thursday found Louisiana’s oil and gas industry wasted over $82 million worth of natural gas in 2019, which is more than two-thirds of the state’s yearly residential consumption.

Commissioned by the Environmental Defense Fund, the analysis drew gas production data from the U.S. Energy Information Administration and fed it into a peer-reviewed emissions inventory modeling formula, EDF spokesperson Matt McGee said. 

The goal of the research was to try to determine how much methane, the primary compound in natural gas, is wasted and released into the atmosphere in Louisiana. The waste occurs when gas is flared, vented or leaked from oil and gas infrastructure.

Compared with carbon dioxide, methane causes much more harm to the atmosphere in the short term. It traps over 80 times more heat than carbon dioxide over a 20-year period and is responsible for more than 25% of the atmospheric warming the Earth experiences, according to research cited by the United Nations. 

Natural gas is found at virtually every oil well because it’s a natural byproduct of exploration. But it is colorless and odorless, making it difficult to detect without expensive thermal imaging equipment. Scientists have begun finding significant methane leaks across the globe as such imaging technology becomes more accessible.

According to the EDF analysis, Louisiana government missed out on an estimated $2.5 million in lost tax and royalty revenue in 2019 due to the 27 billion cubic feet of oil and gas methane wasted from Louisiana’s 31,000 active onshore wells.

“Methane venting and flaring is bad for the environment, bad for the state economy, and bad for the state budget,” the Louisiana Budget Project’s Jan Moller said in an EDF press release. “When the industry is allowed to waste natural gas, it robs the state of important tax revenue, which then has to be made up through other taxes or else leave the state without the revenue it needs to fund critical programs.”

Researchers found that flaring, which is the combustion of a gas prior to releasing it, is a leading cause of methane waste in the state. The finding aligns with common practices by petrochemical producers to flare instead of vent, which is the direct release of gas. 

When a facility absolutely has to release methane, regulators prefer flaring over venting because it’s less harmful to the atmosphere, according to Patrick Courreges, a spokesperson for the Louisiana Department of Natural Resources (DNR).

“If you have to get rid of it, we prefer you to flare” Courreges said. “We really really don’t want you to vent.”

Both the DNR and the U.S. Environmental Protection Agency have mounted recent rulemaking efforts to reduce methane waste. DNR is currently collecting public and industry feedback on proposals for new venting and flaring regulations. 

Part of the problem so far has been the limited data available on methane waste. Most state regulators are set up to deal with big emission events as opposed to the many smaller releases that continue to be detected and accumulate over time, Courreges said.

In an attempt to address that problem, DNR has partnered with researchers from LSU to develop risk factor methodologies to establish a new “blueprint” for well inspections to detect leaks, Courreges said.

The agency is also looking to other states that have already adopted regulations to stop methane pollution from routine flaring.

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