Cameras, drones and lasers

Dr. Jason Gu was still a graduate student when he developed the technology behind SenSevere, a start-up that creates laser-based gas sensors for use in heavy industry and power plants. Today, he’s working to apply this technology to methane emissions from the oil and gas industry, making him one of the many entrepreneurs developing solutions to tackle the problem. His fascination with innovation isn’t just making his clients more efficient—it may also be saving the planet.

The hidden cost of methane
Methane, the main component of natural gas, is a powerful pollutant responsible for a quarter of the global warming we feel today. The oil and gas industry releases 7 million tons of it into the atmosphere every year through emissions from oil and gas fields and associated pipelines, resulting in over a billion dollars’ worth of wasted American energy resources. And, toxic chemicals like benzene, a known carcinogen, can accompany methane emissions, posing a potential threat to public health.

“The industry is beginning to become more sensitized to the fact that methane is an aggressive greenhouse gas,” said James Armstrong, president of Apogee Scientific, a Colorado-based methane mitigation company. For more than 15 years, Apogee has manufactured a methane detection system that uses a vacuum and infrared sensors and can be mounted to trucks, ATVs and helicopters to identify leaks in the field. “If you find the leaks and repair them, you’re not only helping the environment…you’re extending the resource.”

New frontiers for entrepreneurs
Today, a range of solutions are available to address the problem, from mechanical leak-preventing sealing devices to handheld infrared cameras. A 2014 ICF International report found that these existing technologies can reduce methane emissions by 40 percent, while costing oil and gas companies less than a penny per thousand cubic feet of gas produced.

For businesses operating in the field of methane mitigation, opportunity lies not only in existing technologies, but also in emerging ones. Heath Consultants, a Texas-based, family-run business, has been helping oil and gas companies capture wasted gas for over 80 years. But when they look to the future, they see a new way to possibly reduce emissions even more effectively: drones.

In August, Heath Consultants announced that, along with several research partners, they received part of a $60 million grant to develop a methane-monitoring drone that can reliably and cost-effectively detect and measure methane leaks.

“One drone will be able to monitor multiple wellheads, pipelines, separation tanks and anything else it needs to,” said Paul Wehnert, senior vice president of sales and marketing with Heath Consultants. “It will sit in a doghouse, probably charging by solar power. It will then fly a programmed, aerial grid to monitor the various sites.”

Dr. Gu, of SenSevere, has a different approach. As part of the Environmental Defense Fund’s Methane Detectors Challenge, his four-person team has developed a stationary laser system that can continuously and cost-effectively monitor for methane emissions. The system, Gu claims, allows for “organized responses to leaks in hours, not months.” That could mean the difference between a methane leak costing pennies, or costing thousands.

Policy drives innovation
State and federal leaders are increasingly recognizing the role policy can play in leveling the playing field for methane reduction practices across the industry, with the Environmental Protection Agency (EPA) proposing rules in September to reduce oil and gas methane emissions across the United States. Entrepreneurs like Gu caution that these policies must include the flexibility to adopt the most effective solutions as they become available and encourage further innovation.

“Any regulations need to have a clear pathway for operators to be recognized for using innovative technology,” Gu testified at a recent public hearing on EPA’s proposed methane rules. “Without such a pathway, the proposed rule risks freezing methane detection technology at its current level.”

As momentum builds behind the effort to reduce oil and gas methane pollution, American innovators are providing the technology to cost-effectively drive emissions reductions, and are continually working to develop even more innovative, cutting-edge solutions. By crafting flexible rules, policymakers can help ensure the newest, most effective technologies are able to be adopted as they are developed by American businesses.

With New Regs Incoming, Methane Mitigation Gets Organized

The energy industry has a new trade group in town, and it’s rallying companies big and small to show policy makers that their products are shelf-ready to fight climate change.

Meet the Center for Methane Emissions Solutions. With emissions regulations expected in the coming months, the small trade association (they have 7 members) has the wind of federal regulation at its back – and if it manages to woo utility and power companies, it could become powerful indeed.

Officially launched Tuesday, CMES represents the voice of the methane mitigation industry, a sector poised to grow when the Environmental Protection Agency and the Bureau of Land Management issue methane emissions regulations.

The White House has already acknowledged that propping up these companies is part of its plan. “Achieving the Administration’s goal would… continue to support businesses that manufacture and sell cost-effective technologies to identify, quantify, and reduce methane emissions,” reads a White House fact sheet released in January.

But little is known about these businesses, according to CMES. “Policy makers aren’t up to date on the most recent technologies available to solve the problem of methane,” said Patrick Von Bargen, the center’s executive director, in an interview Tuesday. “We see the opportunity to bring policy makers together with companies that are employing new technologies to solve problems.”

Von Bargen, who was chief of staff for former Sen. Jeff Bingaman (D-N.M.), said that the U.S. loses about $2 billion worth of methane annually due to faulty equipment or inefficient practices like venting and flaring at oil and gas well sites. “When it goes up into the atmosphere, not only does it harm the climate but it’s a waste of a monetizable asset,” he said. “These technologies make it much more efficient to produce more energy per dollar.”

Some of the businesses have been around for decades, he said, constantly tweaking old technology like pipeline seals and valves. Others are newer, showcasing products like airborne thermal imaging cameras. The group ranges from multi-billion dollar companies like Wilsonville, Oregon-based FLIR Systems Inc., which uses thermal imaging to spot methane leaks, to small remediation companies like Sheridan, Colorado-based Apogee Scientific Inc.

Collectively, they produce and sell products and services that capture methane across the entire natural gas distribution network, from the well head to the burner tip.

Methane, the primary component of natural gas, is the second-most prevalent greenhouse gas in the United States, according to EPA. When methane is leaked from a pipeline, for instance, it absorbs the sun’s heat and warms the atmosphere. While it does not stay in the atmosphere as long as carbon dioxide, its impact on climate change is 25 times greater than CO2 over a 100-year period.

“The industry is beginning to become more and more sensitized to the fact that methane is an aggressive greenhouse gas,” said James Armstrong, president of Apogee Scientific a methane mitigation company that manufactures portable leak detection systems that can be mounted to trucks, ATVs and helicopters.

“If you find the leaks and repair them you’re not only helping the environment…you’re also extending the resource,” Armstrong added.

“There’s a whole industry of companies the average person has probably never heard of, but these businesses are on the front lines of a critical climate change issue each and every day,” said Sean Wright, manager of the corporate partnerships program at the Environmental Defense Fund, a Washington-based advocacy group.

With CMES, these businesses now have a collective voice in Washington.

Wright said that the coalition got its genesis from a 2014 report by Datu Research, commissioned by EDF, that showed there are at least 76 firms manufacturing methane mitigation equipment or offering related services in the United States, providing jobs in at least 531 locations across 46 states. Around 20 percent of these companies are publicly traded, with an aggregate market cap of $445 billion.

“These are not startups that are in need of help; they’re mature companies…with proven solutions for curbing methane,” Wright said. “Policy makers want to know that there are resources available to respond to new rules – the work we’ve done shows there is a sizable industry here ready and able to address this issue.”

Brent Lammert, a vice president at FLIR, said the report gave competitors in methane mitigation a voice. “It’s been very, very helpful to put aside sales and marketing and have conversations with regulators and industry,” he said in an interview.

Lammert said CMES has “found its footing in being able to offer information,” namely that these technologies are deployable and scalable.

Some are skeptical that CMES represents a too-narrow set of interests. “We have to be careful in our business on which side of the fence we sit,” said Paul Wehnert, a senior vice president at Heath Consultants, a company that serves utilities and oil and gas companies, which might oppose stricter methane rules.

Wehnert said Heath was still considering joining CMES, but “we don’t want to join a group that’s purely interested in their own personal gain… we don’t want to be looked at as an ambulance chaser.” If utilities joined the coalition, he said, it would make it easier for Heath to get on-board.

“We’re early in our process,” Von Bargen said. “I would love to recruit more members and get a real breadth of views.” By framing the trade group as one that helps producers and utilities waste fewer resources and maximize their return, CMES hopes to attract more than just methane remediation companies.

“The purpose of our coalition or center is to show policy makers the innovative ways you can capture methane,” Von Bargen said. “If a [energy] producer is committed to that then that would be great.”

“The oil and gas industry doesn’t want to lose money either,” said Chris Swonger, senior vice president of government relations at John Crane, a company that designs and manufactures pipeline seals.

As to whether or not its possible for methane mitigation companies to be on the same side as producers and utilities when it comes to new methane rules, “we’ll have to see what comes out with the proposed rulemaking,” he said.

Von Bargen agreed. “It’s really too early to tell if there will be other interests trying to take the rule in a direction that we think doesn’t make sense.”

EPA and BLM are expected to file notices of proposed rulemakings later this summer. EPA’s rules will cover new and modified sources of methane emissions in the oil and gas sector, while BLM will pen standards for all sources on federal lands.

CMES has already held a first round of meetings with EPA and BLM officials, and will conduct a second round of meetings in the coming weeks. The center is also eyeing state regulators, particularly in Colorado, Wyoming and Ohio, which are implementing their own methane rules.

Methane regs could boost oilfield equipment makers

WASHINGTON — The Obama administration’s plan to clamp down on methane emissions could be a money maker for the manufacturers of sealing devices and leak detectors used to track and contain the highly potent greenhouse gas.

Some 76 companies with more than 500 locations spread across 46 states sell services and equipment that could be tapped by oil and gas companies seeking to comply with the planned regulations, according to a report released last year.

On Wednesday, as the White House unveiled its methane blueprint, the industry built around finding and stopping the pollutant was touting its potential to reduce waste and create jobs.

The Fluid Sealing Association, which represents North American manufacturers of sealing devices used by the industry, said the group and its members “are committed to doing its part to address climate change.”

“The FSA is well equipped to work with our partners in the oil and gas sector, the EPA and the Obama administration in finding solutions and being a technical resource to curtail methane emissions,” the group said. “Member companies of the FSA offer American-made, cost-effective and proven solutions, and we develop sealing technologies that drive emission reductions across the U.S. oil and gas and process industries.”

Colorado-based Apogee Scientific, which makes a detection system for identifying hydrocarbon leaks, issued a statement saying it looked forward to working with the EPA and the oil and gas sector.

“We believe this EPA plan can be implemented in a cost effective manner and will create a cleaner environment for the United States, reduce waste and create jobs,” said Apogee president James Armstrong.

The developing methane mitigation industry is focused in states with substantial oil and gas production, with Houston serving as the headquarters to at least 16 companies making equipment to detect and trap methane.

One of them is Health Consultants, Inc., a 1,200-employee firm that designs, manufacturers and sells air sampling monitors and detectors that can pinpoint methane leaks up to 100 feet away.

Hoerbiger America Holding, a maker of seals and compression equipment, has manufacturing facilities in Houston.

Other local manufacturers of plunger lifts, seals, pneumatic controllers and other devices that could need upgrades under new methane mandates include Norriseal, EagleBurgmann, National Oilwell Varco and Stewart & Stevenson.

Methane emissions can happen all along the natural gas supply chain, beginning during production and processing at wells, as well as when it is transmitted, stored and distributed.