Breaking the Myth behind the Costs of Environmental Stewardship in the Energy Sector
Perhaps the biggest myth facing the natural gas industry is that environmental protection and increased profits can’t co-exist. Some are still subscribed to the antiquated idea that pursuing environmental stewardship comes at the cost of the income statement. In reality, nothing can be further than the truth.
Many leading US corporations are stepping up when it comes to their environmental responsibilities – with stakeholder criticism, changing consumer preferences, and the promise of greater production efficiency all helping to herald in a new era of environmentalism throughout the US energy sector.
So with methane leakage from the oil and gas industry costing billions in lost product every single year, why aren’t more oil and gas companies doing something about it, especially now that technology has become so simple and cost-effective? Seven million metric tons of gas are lost each year, an amount sufficient to heat 5 million homes. When we remember that methane is 84 times as potent as carbon dioxide in the first 20 years after it’s released into the atmosphere, there’s a massive opportunity for companies to save money and protect the environment at the same time.
A case study conducted by the Canadian division of Conoco Philips revealed that their natural gas operations were losing up to 0.5% of all production due to fugitive emissions – a total of $20,000,000 US dollars per year. The solution, according to their research team, was surprisingly straightforward and cheap, with their investment being paid back in a few months.
In another case closer to home, a Wyoming based oil and gas operator Jonah Energy discovered that they had a significant fugitive emission problem on their hands, both reducing efficiency and contributing to a local smog problem in the country. After implementing a number of proven technologies, Jonah Energy reduced their emissions by 75 percent, lowered their repair time by 85% and saved over $5 million in wasted product that year.
In other words, the natural gas sector is ripe with opportunities to save money in what was once an undetectable, untreatable problem. However, methane management solutions are still improving and a company has to do its research to keep up with the best technological advancements and adopt to regulation changes.
In today’s era, the solutions are affordable and readily available. The cost of using Target Emission Services for fugitive emissions inspections can easily be recouped in recovery of wasted gas, increased efficiency, reduced repair costs, and overall safer conditions.
Something even more valuable than such things is the public perception that comes with a “green” brand. Besides capitalizing on the changing consumer perceptions that underlie their decision making choices, there’s significant pressure in the investment community to set up greenhouse gas reduction goals, with more climate resolutions showing up on annual shareholder ballots than ever. A study conducted a few years ago from Ernst and Young revealed that half of all resolutions concerned social sustainability and environmental initiatives.
Fugitive emissions, once seen as an unfortunate by-product of natural gas extraction, has become a highly treatable solution in the 21st century. As corporations are poised to reap the financial rewards and brand recognition that come from adopting these changes, it is realized we don’t have to sacrifice environmental integrity to enjoy economic prosperity anymore. Clean air, a healthy economy, and a strong balance sheet are all able to co-exist in today’s world.