Mixed Messages - Different Views of the Energy Debate



Two methane flares in Texas.

Two deep water windmills in the North Sea

The energy world is filled with mixed messages that can be said to be in juxtaposition. Briefly juxtaposition is defined as the act or instance of placing two or more things side by side, often to compare or contrast or to create an interesting effect. As the above photos illustrate, contrasting two methane flares in Texas and two deep water windmills in the North Sea. Texas permits methane flaring from fracked oil wells because capturing the methane would add cost to the currently unprofitable production of oil. Though wind energy is “free” and ocean winds are more consistent and stronger, deep water connections are very expensive. Moreover the photos represent the radically different views of the energy debate. Depending on which side of science one supports, flaring the methane may add to global warming. More importantly does it make sense to waste the energy resource while trying to compete with oil prices being sustained at under $45.00 per barrel by Saudi Arabia manipulations? To help feed this somewhat questionable charade, according to Reuters; the Trump administration on Aug. 13 rolled back regulations aimed at reducing emissions of the potent greenhouse gas methane from oil and gas operations, in its latest move to unwind environmental rules ahead of November’s presidential election.

During a visit to election swing state Pennsylvania, U.S. Environmental Protection Agency Administrator Andrew Wheeler said the US EPA will formally rescind 2016 Obama administration limits on oil and gas industry emissions of methane, a move criticized by environmentalists. The Pittsburgh Business Times reported Mr. Wheeler, in Pittsburgh on Thursday, said the Trump administration’s changes to regulations on methane emissions will help small and midsized natural gas companies in Appalachia and allow for more innovation and cleaner air. Congressman Guy Reschenthaler, a Republican representing a district at the heart of Pennsylvania’s fracking industry, welcomed EPA’s decision to “remove burdensome regulations” and “commitment to supporting Pennsylvania gas and oil operators.”

The American Petroleum Institute, a powerful fossil fuel lobby, has said it supports the final rule even if some of its larger members like Exxon, BP and Shell have called for mandatory methane regulations. Smaller drillers say the rule is too costly for them to comply with.

Contrasting Wheeler’s actions, industry players are maintaining their commitment to reduce emissions along the entire supply chain. Upstream oil and gas companies participating in The Environmental Partnership recently welcomed the midstream sector, more than tripling its membership to 83 participants. Working with API, the partnership comprises companies of all sizes across the U.S. each aiming to lower emissions of methane and volatile organic compounds (VOCs).

Our Nation’s Energy Future (ONE Future) announced Aug. 12 that Enbridge Inc., the largest infrastructure company in North America, has joined the coalition; bringing the total number of member companies to 27. 

As a ONE Future member, Enbridge will report its 2019 methane results. In a recent report the coalition registered a 2018 methane intensity number of 0.326%, a decrease of 41% from 2017, demonstrating that the natural gas industry can minimize methane emissions and increase production and throughput while supplying much needed energy to the U.S. and around the globe for years to come.

Politics aside, the important takeaway here is that this relaxation helps more oil producers and their hedge fund investors in Texas than natural gas producers in Pennsylvania. As they say the elephant in the room is that the small conventional (shallow) gas driller and producer that we know as neighbors are finding it hard compete with the Marcellus and Utica gas production. Their wells are steady but low volume producers, many of the gathering lines leak as does some of their aging equipment. Sure this tid-bit from the administration delays some hard choices. Small operators keeping wells pumping to avoid plugging. Pennsylvania has thousands of abandoned wells with many more to come. Plugging to DEP standards can cost thousands of dollars. So in Texas they flare gas burning money in into thin air, in Pennsylvania the old wells leak. The bonds the DEP hold are no way near enough to begin to plug effectively to some sustainable standard. The future says we the taxpayer may be left to pay to fix the leaks.

Stepping back and to put in perspective another juxtaposition. As reported by Reuters; the State of North Dakota announced it plans to spend $66 million to plug wells abandoned by oil and gas companies in the U.S. state after the pandemic crushed demand for crude, causing a plunge in prices. The $66 million has come from the Federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, said Katie Haarsager, a spokeswoman for the North Dakota Oil and Gas Division, which is undertaking the project.

So much for juxtapositioning, perhaps it is all about chasing windmills.

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