New innovation network seeks to slash oil and gas industry's methane emissions

A new multi-stakeholder entrepreneurial and innovation hub is on track to cut methane emissions in Canada's oil and gas industry by 45% by 2025, while growing jobs and high-tech companies.

The 45% target – set by the federal and provincial governments – could be achieved largely using readily available technologies such as gas capture, clean combustion and fixing leaks, members of the Methane Emissions Reduction Network (MERN) said at the 2018 Methane Emissions Reduction Forum and in separate interviews with RE$EARCH MONEY. MERN received a $600,000 grant from Alberta Innovates, along with a $1.2 million contribution from the Alberta Upstream Petroleum Research Fund. The network includes industry associations, government, oil and gas producers, technology providers, and service and supply companies, along with learning and research institutions.

“The aim is to increase the uptake of already commercialized technologies and increase methane detection and mitigation capacity to meet the 45% target,” says Dr. Soheil Asgarpour, president of Calgary-based Petroleum Technology Alliance Canada which is leading the new network.

“We’re going to have the technology in our hands by 2020 that would enable a 45% reduction,” says Mark Taylor, executive vice-president, operations division, at the Alberta Energy Regulator.

Ken Paulson, chief operating officer at the British Columbia Oil and Gas Commission, says there is unprecedented collaboration on the file by Ottawa and the three western Canadian oil-producing provinces. “I haven’t seen this before, where you have the policy direction and the regulatory development going on at the same pace at the same time, coupled with the evolving technology.”

The industry also supports the 45% target, by using technology and innovation, says Patrick McDonald, director of climate change and innovation at the Canadian Association of Petroleum Producers: “Cost-effective regulation is absolutely necessary and needs to be flexible enough that we can deploy these technologies in a timely manner.”

Benefits of reducing methane emissions

The oil and gas industry is the largest industrial emitter of methane in Canada, releasing 44% of the total 4.3 million tonnes of methane emissions in 2014. In Alberta, the figure is 70%. Upstream activities such as exploration, drilling, production and field processing contribute close to 90% of these emissions.

Methane is a potent greenhouse gas, with a global warming potential 86 times greater than carbon dioxide over a 20-year period. Also, methane’s lifetime in the atmosphere is about nine years, compared with CO₂ which persists for more than 100 years. So reducing methane emissions by 45% (equivalent to 26 million tonnes of CO₂) provides short-term benefits.

The expected net benefit of reducing methane emissions is $8.9 billion in avoided costs of climate change and air pollution, according to a federal cost-benefit analysis, notes James Diamond, manager, upstream oil and gas at Environment and Climate Change Canada. “This is a very cost-effective approach to managing greenhouse gases.”

In addition, more than 170 Canadian companies — three-quarters of them with offices in Alberta — are providing methane management solutions, according to a 2017 survey by the Methane Emissions Leadership Alliance. Eighty percent of the alliance’s data, services and technology firms surveyed said they expect job growth in the next 12 to 18 months as a result of new federal and provincial methane regulations; 40% anticipated doubling their number of employees.

Reducing carbon intensity also will make Canada’s oil and gas industry more competitive now that some jurisdictions, including California, B.C. and the European Union, have regulations requiring low-carbon fuels, said Mike Crabtree, vice-president, energy division at the Saskatchewan Research Council. “Going forward, carbon competitiveness is going to be critical to our success in Canada as an energy producer.”

Innovation needed to improve methane detection and monitoring

Emissions Reduction Alberta, a not-for-profit organization, has committed up to $29.5 million for 12 innovative technology projects expected to reduce more than 1.1 million tonnes of methane by 2030, while generating $60 million of investment and supporting 60 jobs.

However, the key to achieving the 45% reduction will be accelerated testing and deployment of new and emerging technologies for detecting, measuring and monitoring methane emissions across the industry’s vast infrastructure, network members say.

The Alberta Upstream Petroleum Research Fund is funding several projects in this area. They include one of the world’s largest applied research projects focused on methane leak detection, quantification and repair, now being executed in collaboration with the Government of Alberta, the Alberta Energy Regulator, industry and Stanford University. Launched last August, the project covers 2,500 square kilometres in the Red Deer region in central Alberta and includes 30 producing companies and 190 oil and gas facilities.

In another initiative, the University of Calgary’s Centre for Smart Emissions Sensing Technologies (SENST) has begun testing new mobile sensor technologies and developing analytics to support an intelligent methane monitoring and mitigation system, with the help of a $400,000 investment from Western Economic Diversification Canada.

“We’re going to need to move into mobile sensing systems in order to really cover the ground and to look for and monitor emissions,” says Dr. Chris Hugenholtz, director and head researcher of SENST and an associate professor in the Department of Geography. Calgary-based CMC Research Institutes works with SENST, as well as several clients, to test new surface-based and airborne technologies – including a state-of-the-art laser interferometer methane sensor – at the CMC Containment and Monitoring Institute’s field research station southeast of Calgary.

Cost of taking action is “incredibly cheap”

Meanwhile, a study published in Environmental Science and Technology by Carleton University researchers Drs. Matthew Johnson and David Tyner suggests the 45% target may not be ambitious enough, given the cost efficiency of deploying existing technologies to reduce only the oil and gas industry’s methane emissions reported to the energy regulator. (Reported emissions comprise about one-quarter of the industry’s total methane emissions, but don’t include unreported sources such as equipment leaks and fugitive emissions). The researchers’ techno-economic analysis of mitigation potential at nearly 10,000 individual oilfield sites in Alberta determined that the net cost to industry averages less than $2.50 per tonne of CO₂ equivalent.

“Compared to federal and provincial carbon price targets of $30 to $50 per tonne, these actions are incredibly cheap,” says Johnson, a Canada Research Professor in Carleton’s Faculty of Engineering and Design and head of the Energy and Emissions Research Lab. The study found the up-front capital costs to industry ranged from $150 million to $500 million, but are largely offset by revenue from capture of saleable gas into pipelines, or by using the methane onsite during processing.

“What this analysis shows is that the infrastructure costs to mitigate these reported sources really should be thought of as an investment in the industry,” Johnson says. “It’s the best, cheapest, most effective mitigation opportunity we’ve got.”

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