Oil & Gas Companies Underreported Methane Leaks in the Permian Basin

According to a report by the House Committee on Science, Space, and Technology, oil and gas companies in the Permian Basin are underreporting their methane gas emissions to the EPA.

The report found that the companies were not properly tracking, identifying, or controlling the methane leaks and were failing to properly use methane detection and repair technologies.  It also found that a disproportionate share of the methane emissions came from a tiny number of “super-emitting leaks,” which the companies were not tracking or even noticing.

“The point is brutally clear,” the report says.  “The operator’s technology experts were warning that the technology’s biggest risk was not that it would fail, but rather that it would succeed — and in doing so, would find more methane leaks that the operator would then be responsible for, with all of the accompanying repair costs and reputational risks that might ensue.”

Methane is the second-largest contributor to global warming, accounting for 30% of global warming.  It is 85 times as potent as carbon dioxide.  When captured and stored properly, it is the main component of natural gas and a revenue generator.  However, when methane leaks into the atmosphere, it becomes one of our earth’s most dangerous climate pollutants.

The Committee discovered the companies were underreporting their methane emissions during its investigations of ten oil and gas companies in the Permian Basin:

• Admiral Permian Resources
• Ameredev II
• Chevron
• ConocoPhillips
• Coterra Energy
• Devon Energy
• ExxonMobil
• Mewbourne Oil
• Occidental Petroleum
• Pioneer Natural Resources

The Committee chose to focus on the Permian Basin (a land area from West Texas to Southeast New Mexico) because it is the largest methane-emitting region in the U.S.  It accounted for 42.6% of U.S. oil production in December 2021.

The report found that Permian Basin oil and gas companies are failing to address super-emitting leaks, failing to use quantification data to mitigate methane leak emissions, and deploying innovative Methane Leak Detection and Repair (LDAR) technologies in a limited and inconsistent manner.

The largest amount of methane is emitted when the equipment malfunctions, known as “methane leaks.”  A small subset of massive methane leaks, known as “super-emitting leaks,” are responsible for a disproportionate amount of the oil and gas sector’s total methane emissions.  Just 12% of methane emitters are responsible for 50% of methane emissions in the Permian Basin.  One company experienced a single leak equivalent to more than 80% of all the methane emissions it reported to the EPA.

Super-emitting leaks are difficult to track because they tend to be intermittent and unpredictable, starting and stopping irregularly for extended periods of time.  Thus, companies must be prepared to track and identify super-emitting leaks outside of normal procedures.  However, the report found that Permian Basin companies are unprepared for identifying and tracking the super-emitting leaks.  Most companies don’t even have a definition of a super-emitting leak: “Of the ten operators that provided information to the Committee, nine out of ten revealed that they lack any internal definition of a super-emitting leak, whether persistent or intermittent.  Only one operator cited an actual size threshold for a super-emitting leak.”  One company even stated that it preferred not to single-out super leaks because it is distracting from its objective of identifying emission leaks generally.

The Committee report urged the companies to make greater and more accurate use of the innovative leak surveillance equipment known as Methane Leak Detection and Repair, or LDAR.

Innovative LDAR technology allows operators to properly measure and track their methane emissions and is adept at finding leaks, including super-emitters.

“Many innovative technologies can provide operators with data regarding the size of individual methane emission events within their operations.  But the operators themselves must accept the validity of these measurements, integrate the measurement data into their repair procedures, and respond to super-emitting leaks as quickly as possible,” the report stated.

The companies were not utilizing this technology, according to the report.

“Oil and gas companies are deploying innovative LDAR technologies in a limited and inconsistent manner,” the report said.  “Most deployments remain in the pilot phase with scopes that are too narrow to support emissions reductions on a timeline that meets the urgency of the climate crisis.”

As a result, the companies’ methane emissions “are likely significantly higher than official data.”

Currently, the EPA requires oil and gas firms to inspect for leaks twice a year.  However, U.S. has recently made methane a major priority.  The EPA issued a proposed rule to strengthen the regulatory framework around methane emissions in the oil and gas sector for the first time.  Biden’s new proposals at the U.N. climate summit represented the first time U.S. will address methane seepage from the oil and gas industry.  Oil companies will need to keep up with LDAR technology and policies to detect super-leaks and properly report emissions, so our future generations can live and breathe.

If you or someone you know was injured in a methane leak-related accident, contact our experienced oilfield accident lawyer at Morrow & Sheppard LLP for a free, confidential consultation.