By Julie Gordon
WASHINGTON (Reuters) - Executives from natural gas companies call their increasingly cheap and plentiful fuel the world's best answer to climate change: it produces about half the carbon dioxide of coal when burned in a power plant and it can fuel trucks, trains and ships.
While some outside the industry see natural gas as but a stepping stone to a future when all energy will be provided by wind, solar and other renewable sources, "This idea of natural gas as a transition fuel to renewables is strange," Total SA chief executive Patrick Pouyanne said.
"Natural gas is a solution," he said this week at the World Gas Conference in Washington, the industry's biggest global summit.
But environmentalists, regulators, and many in the industry itself warn of a dirty underbelly to natural gas, or methane. Before it is burned, it is one of the most potent greenhouse gases and can reach the atmosphere through leaks in wellheads, compressor stations and chemicals plants.
A study published in the scientific journal Nature last week put methane emissions from the U.S. oil and gas industry at about 13 million metric tonnes per year, 60 percent higher than the official U.S. Environmental Protection Agency estimate. Carbon dioxide emissions from U.S. energy sources, meanwhile, are around 5 billion tonnes.
The United States is the world's top natural gas producer, one of its biggest crude oil producers, and a growing exporter of both thanks to improved drilling technology that has vastly increased output.
While methane emissions are relatively small compared to carbon dioxide, they are a major force in short-term global warming. Scientists say methane can trap more than 80 times more heat than carbon in the first 20 years after escaping into the atmosphere.
"Man-made methane emissions are responsible for 25 percent of the warming our planet is experiencing right now," Mark Brownstein of the Environmental Defense Fund (EDF) told Reuters. He added that the United States, as a top producer, has a responsibility to properly track emissions and reduce them.
President Donald Trump, however, has been seeking to roll back environmental rules to allow companies to rapidly boost output. Last year, his administration halted an Obama-era regulation that would have required drillers on federal land to curb methane leaks, calling it redundant.
The administration is "taking the industry backwards, and feeding into the narrative that fossil fuels are bad for the world," said Fred Krupp, president of the EDF.
While some have challenged the methane study's conclusions, energy executives at the triennial summit said industry should instead review them and learn.
"I do believe that we have to acknowledge this is an issue," said Bernard Looney, chief executive of Upstream with BP Plc. "Gas will not win the argument that it needs to win if we don't all put methane as an issue on the table."
The stakes are high for the fast-growing industry. Global demand for liquefied natural gas (LNG) - a form of the fuel that can be transported globally by ship - has jumped 26.6 percent in the last five years, according to data from the U.S. Energy Information Administration.
LNG demand is projected to rise another 6.6 percent this year and keep growing thanks to a rapid uptick in imports by China and other nations seeking to offset coal-fired power plants to reduce pollution.
"I see that there's a very important role for gas in cleaning the energy mix," said Rachel Kyte, chief executive of Sustainable Energy for All.
"But let's not leave the room with the elephant still here, untouched. You have to plug that methane leak."
"NOT ROCKET SCIENCE"
The bulk of global methane leakage comes from flaring, where gas produced as a byproduct of crude oil drilling is burned off because there are no pipelines yet available to take it to market. A lot also leaks from old, inefficient facilities that need to be upgraded or replaced.
As a result of the leaks, about $2 billion worth of fuel vanishes into the air annually, according to the EDF.
Those financial losses are a spur for major oil and gas players to voluntarily take steps to reduce leaks.
Greg Guidry, Shell's EVP of unconventionals, called voluntary action critical because: "If you just wait for regulation, there will be a hell of a lot more methane emitted in the meantime."
Sara Ortwein, president of XTO Energy Inc, a natural gas subsidiary of Exxon Mobil, said work still must be done to make solutions more cost effective, and requirements for leak detection could be a "reasonable part of a sound regulation."
Pratima Rangarajan, chief executive of OGCI Climate Investments, said global standards are needed in the longer term.
"What we need for scale is for everybody to do it because you have to, across the world and in every country," she said.
For Brownstein, of the EDF, the solution is simple. Inexpensive monitoring equipment like infrared cameras and drones can slash methane emissions, along with operation changes.
"A lot of this is not rocket science," he said.
(Additional reporting by Timothy Gardner; editing by Richard Valdmanis and David Gregorio)
Disclaimer: No Business Standard Journalist was involved in creation of this content
