Environmentalists are prodding the Obama administration to take swift action to curb methane leaks from oil and natural gas wells, but low prices are making even voluntary action to cut the potent greenhouse gas unthinkable, according to industry officials.
"Right now I will say that market forces kind of militate against a ton of people jumping up to be proactive," Tom Michels, executive director of the firm One Future, told Reuters in an interview Tuesday. One Future represents a coalition of natural gas companies involved in shale oil and gas production with the aim of voluntarily self-regulating methane emissions.
The Environmental Protection Agency, which is looking to regulate methane from fracking, has endorsed the coalition under its Methane Challenge program to help the industry curb emissions from production, processing, transmission and distribution facilities.
So far, Michels has attracted only a handful of companies to join the One Source ranks. Although it includes some heavy hitters such as Apache Corp., which has operations from the U.S. to Egypt, most of the industry isn't willing to spend money to cut methane in such a challenging market environment, Michels said.
One Source includes pipeline giant Kinder Morgan, Southwestern Energy Co. and Hess Corp., in addition to Apache, representing four companies out of the 8,000 independent producers with operations in the United States. He said many companies are struggling to stay afloat and are wary of "taking on commitments that they don't have to."
An EPA spokeswoman says the agency hopes to get more volunteers to join One Source by using the low prices to its advantage.
"A period of low oil prices is a particularly important time to run operations more efficiently by keeping more of this valuable economic product – natural gas – in their systems," agency spokeswoman Laura Allen said. Saving more methane equates to saving more natural gas to sell in the market, is essentially the argument.
But recent Energy Department data shows natural gas storage is full, and with a relatively warm winter, demand for the fuel has not been as high.
At the same time, environmental groups are clamoring for the EPA to move forward with strict regulations to enforce methane reductions. Those calls have grown louder in recent months after one of California's largest gas utilities lost control of a leak at a gas storage facility near Los Angeles, forcing residents to evacuate. The leak was sealed last week after months of delays.
A draft greenhouse gas inventory that EPA issued Monday showed a spike in methane from the oil and gas industry, which environmental groups used to renew pressure on the administration. The draft inventory shows a 27-percent jump in methane from previous estimates.