Methane Emissions: Beyond Methane Intensity

The oil and gas industry is struggling to accurately measure methane emissions, which hinders efforts to reduce them. The most common metric, methane intensity, obscures poor gas-handling performance by comparing energy vented against energy captured, including crude oil and condensate. This measurement can drive down the overall loss of energy without highlighting shortcomings or guiding improvement.

A more accurate measure is needed to differentiate between good operations and bad ones when comparing like to like. Leak rate, which represents the fraction of gas that is produced but wasted by loss to the atmosphere, is a better indicator. Research shows that for an average natural gas to have less climate effect than an average coal when used for electricity, the loss ratio needs to be less than 1%. In fact, even low-methane coals can produce less greenhouse effect than Texas Permian Basin exported natural gas unless the methane leak rate is lower than 0.2%.

The industry also suffers from availability bias and confirmation bias. Companies with low emissions often trumpet their accomplishments using methane intensity, which may not reflect operational improvements but rather pre-existing economic incentives or selling high-emitting fields. An analysis of gas-disposition data self-reported by Texas operators reveals that 38% of unplugged oil wells are associated with leases reporting zero gas production or all gas vented or flared.

Studies on the Permian Basin, often cited as a success story, have reached different conclusions. Multiple independent top-down studies indicate methane loss rates near 3%, despite some reported improvements in methane intensity.