Methane is supercharging the climate crisis

From Our World in Data

From The Hill

In the fight against climate change, the focus is usually on carbon dioxide, or CO2 — and for good reason. It’s a greenhouse gas that remains in the atmosphere for [thousands of] years, trapping in heat for generations to come. Yet there is an even more potent planet-warming gas whose destructive powers have long gone hidden — until now.

Methane traps heat in the atmosphere with 80 times the power of CO2 over 20 years. While it breaks down in the atmosphere faster than carbon dioxide, the damage it does is more immediate.

The good news is that, thanks to recent developments in leak monitoring, we can halt much of the methane emitted from various human activities before it reaches the atmosphere, a tactic that, because of methane’s potency and short shelf life, could have an almost immediate impact.

Scientists around the world now have tools at their disposal to trace otherwise invisible methane leaks. With spectrometers, satellite surveillance, drones and handheld devices, they can now create sophisticated, multilayered maps that reveal how and where methane plumes are entering the atmosphere. The aggregation of this data is so precise, in fact, that scientists can pinpoint methane leaks down to the exact location.

What they’ve discovered is telling.

The fossil fuel industry has been drilling and refining oil and its byproducts for over 150 years, and it has left behind a legacy of pollution and dodged accountability. So-called “orphaned” wells, or wells that have been abandoned by the oil companies that originally drilled them, litter the United States, including my home state of Louisiana. When these wells aren’t abandoned outright, ownership is transferred to a shell company without the funding to clean them up. They can remain uncapped for generations, leaking carcinogens and other toxic chemicals into the surrounding area and unleashing plumes of methane into the atmosphere.

Last month, I testified in Baton Rouge on behalf of important legislation to hold oil companies accountable for the wells they previously drilled. Under current law, the expense of eventually capping wells is left to taxpayers. Passing abandoned well accountability legislation in state after state is a workable solution to halting this contributor to climate change.

Beyond avoiding accountability for its methane emissions, the industry also engages in “greenwashing,” or making their products seem cleaner than they are. Nowhere is this more apparent than the case of “LNG” or “liquified natural gas,” as the industry calls it.

Here’s the truth: “natural” gas is methane. It’s not a pure product and contains elements of other toxins, but methane is the active ingredient. That’s because when methane is not leaked or wasted, it can be a powerful fuel due to its high combustibility.

The industry’s process for extracting gas through fracking, moving it through pipelines, liquefying it and shipping it overseas is an energy intensive and wasteful process. From the well head through the pipeline to the export terminal and beyond, methane is leaked into the atmosphere. To regulate pressure along the pipeline and in the liquefaction plant, companies flare, or burn off the excess, just above ground level, releasing methane along with any other particulate matter.

Here too, the fossil fuel industry needs to be held to account. Sending a greenhouse gas into the atmosphere while marketing it as a “green” alternative to oil is dishonest.

The Department of Energy’s report on the federal “pause” on LNG permitting has just been released. In her statement, Secretary Jennifer Granholm confirmed what so many of us have long known: LNG exports are a ticking greenhouse gas time bomb. “An LNG project exporting 4 billion cubic feet per day – considering its direct life cycle emissions – would yield more annual greenhouse gas emissions by itself than 141 of the world’s countries each did in 2023,” she noted.

It’s time to end federal permitting of new LNG gas export terminals. Absent federal action, state and local officials must refuse zoning, land use, public interest and other permits to stop the industry’s reckless expansion.

Methane in the atmosphere has shot up in the past two decades, and it continues to be emitted in quantities that make a stable climate impossible. Manmade emissions have warmed the planet so much that melting permafrost and wetlands are now also releasing methane, causing a “doom spiral” that will soon become uncontrollable.

There is hope. By exposing the industry’s emissions, mandating the capping of wells and downscaling the use of fossil fuels, we can draw down this potent greenhouse gas — and we must. Our future depends on it.

Lt. Gen. Russel L. Honoré (Ret.) is a former commanding officer of the U.S. First Army. He led Joint Task Force Katrina in New Orleans following the devastating Category 5 hurricane. He is currently head of The Green Army, an organization dedicated to finding solutions to pollution.

About 1/3rd of the rise in global temperatures since pre-industrial times (by convention, taken to mean 1850-1900 for the purposes of calculating the rise in temperature, currently already at 1.5 degrees C) is due to higher levels of methane in the atmosphere. If we slashed emissions from agriculture and "fugitive emissions" (gas leaks), the level of methane in the atmosphere would start falling immediately (it decays within 12 years to CO2), and we would stop temperatures rising for two decades, giving us more time to cut CO2 emissions. 

The fracking scam stripped bare

From The New York Times:

(Hat tip to ClimateCrocks)

Source: Fracking 2 was a financial disaster

Ever since the oil shocks of the 1970s, the idea of energy independence, which in its grandest incarnation meant freedom from the world’s oil-rich trouble spots, has been a dream for Democrats and Republicans alike. It once seemed utterly unattainable — until the advent of fracking, which unleashed a torrent of oil. By early 2019, America was the world’s largest producer of crude oil, surpassing both Saudi Arabia and Russia. And President Trump reveled in the rhetoric: We hadn’t merely achieved independence, his administration said, but rather “energy dominance.”

Then came Covid-19, and, on March 8, the sudden and vicious end to the truce between Saudi Arabia and Russia, under which both countries limited production to prop up prices. On March 9, the price of oil plunged by almost a third, its steepest one-day drop in almost 30 years.

As a result, the stocks that make up the S.&P. 500 energy sector fell 20 percent, marking the sector’s largest drop on record. There were rumblings that shale companies would seek a federal lifeline. Whiting Petroleum, whose stock once traded for $150 a share, filed for bankruptcy. Tens of thousands of Texans are being laid off in the Permian Basin and other parts of the state, and the whole industry is bracing for worse.

On the surface, it appears that two unforeseeable and random shocks are threatening our dream.

In reality, the dream was always an illusion, and its collapse was already underway. That’s because oil fracking has never been financially viable. America’s energy independence was built on an industry that is the very definition of dependent — dependent on investors to keeping pouring billions upon billions in capital into money-losing companies to fund their drilling. Investors were willing to do this only as long as oil prices, which are not under America’s control, were high — and when they believed that one day, profits would materialize.

Even before the coronavirus crisis, the spigot was drying up. Now, it has been shut off.

The industry’s lack of profits wasn’t exactly a secret. In early 2015, the hedge fund manager David Einhorn announced at an investment conference that he had looked at the financial statements of 16 publicly traded shale producers and found that from 2006 to 2014, they spent $80 billion more than they received from selling oil. The basic reason is that the amount of oil coming out of a fracked well declines steeply after the first year — more than 50 percent in year two. To keep growing, companies have to keep plowing billions back into the ground.

The industry’s boosters argue that technological gains, such as drilling ever bigger wells, and clustering wells more tightly together to reduce the cost of moving equipment, eventually would lead to a gusher of profits. Fracking, they said, was just manufacturing, in which process and human intelligence could reduce costs and conquer geology.

Actually, no. The key issue is the “parent child problem.” When wells are clustered tightly together, with so-called child wells drilled around the parent, the wells interfere with one another, resulting in less oil, not more. (This may not surprise anyone who is attempting to be productive while working in close quarters with their children.)

The promised profits haven’t materialized. In the first half of 2019, when oil was around $55 a barrel, only a few top-tier companies were profitable. “By now, it should be abundantly clear that the current shale oil business model does not work — even for the very best companies in the industry,” the investment firm SailingStone Capital Partners explained in a recent note.

Policymakers who wanted to tout energy independence disregarded all this, even as investors were starting to lose patience. As early as 2018, some investors had begun to tell companies that they wanted to see free cash flow, and that they were tired of compensation models that rewarded executives with rich paydays for increasing production, but failed to take profits into account. As a result, fracking stocks badly underperformed the market.

But with super-low interest rates, investors in search of yield were still willing to buy debt. Over the past 10 years, the entire energy industry has issued over $400 billion in high-yield debt. “They subprimed the American energy ecosystem,” says a longtime energy market observer.

Even as the public equity and debt markets grew cautious, drilling continued. That’s because one big source of funding didn’t dry up: private equity. And why not? Private equity financiers typically get a 2 percent management fee on funds they can raise, so they are incentivized to take all the money that pension funds, desperate for returns to shore up their promises to retirees, have been willing to give them.

You can see how all of this is playing out by looking at Occidental Petroleum. In 2019, Oxy, as it’s known, topped a competing bid from Chevron and paid $38 billion to take over Anadarko Petroleum, which is one of the major shale companies. Since that time, Oxy’s stock has plummeted almost 80 percent in part due to fears that the Anadarko acquisition is going to prove so wildly unprofitable that it sinks the company.

Fracking leads to methane spike in atmosphere

From National Geographic:

Scientists have measured big increases in the amount of methane, the powerful global warming gas, entering the atmosphere over the last decade. Cows or wetlands have been fingered as possible sources, but new research points to methane emissions from fossil fuel production—mainly from shale gas operations in the United States and Canada—as the culprit.

The “massive” increase in methane emissions occurred at the same time as the use of fracking for shale gas took off in the U.S., says Robert Howarth, an ecologist at Cornell University and author of the study published Aug 14 in the journal Biogeosciences.

“We know the increase is largely due to fossil fuel production and this research suggests over half is from shale gas operations,” Howarth says in an interview.

This big methane increase matters because methane heats up the climate over 80 times more than an equivalent amount of carbon dioxide (CO2) in the first 20 years after it is released into the atmosphere, according to the Intergovernmental Panel on Climate Change. After 20 years most of the methane becomes CO2, which can last for hundreds of years.

Methane released from shale gas production has a slightly different chemical fingerprint compared to methane from cow burps (not farts as commonly believed) and wetlands. Previous studies show that shale gas generally has less carbon-13 relative to carbon-12 (denoting the weight of the carbon atom at the center of the methane molecule) than does methane from conventional natural gas and other fossil fuels such as coal, Howarth said.

The study took previous data on the chemical composition of methane in the atmosphere and applied a series of equations to parse out how much of this lighter form of methane could be attributed to shale gas. That lighter form of methane released during fracking is a substantial component of the overall methane rise since 2008.

A 2015 study led by John Worden of NASA’s Jet Propulsion Laboratory found that methane levels were unchanged for years, but increased sharply after 2006, growing by 25 million tons a year. Using satellites and other measures they concluded that fossil fuels were responsible for between 12 and 19 million tons of this additional methane and the rest was likely biological sources.

[Read more here]

Fracking wells

US Renewables capacity now exceeds coal's

US wind resources.  Source: Wikipedia

The collapse in US coal use is driven partly by the increased take-up of gas and partly by the growth of renewables, especially in the "wind corridor" which runs north from Texas to North Dakota and Wisconsin.  The steady rise in new wind and solar farms across the country has now led to renewables capacity exceeding (just) capacity of coal-power stations.

From CNN:

America's coal industry has already been left in the dust by natural gas. Now it's under immense pressure from the renewable energy boom.

The renewable energy sector had slightly more installed capacity than coal in April, according to a Federal Energy Regulatory Commission report.

That means US power plants can produce more energy from clean sources than coal for the first time in history, according to the SUN DAY Campaign, a nonprofit research group supporting sustainable energy. The breakthrough reflects the plunging cost of solar and wind as well as heightened environmental concern about coal.

"Coal has no technology path," said Jeff McDermott, managing partner at Greentech Capital Advisors, a boutique investment bank focused on clean energy. "It's got nowhere to go but extinction."

The clean energy revolution is on the verge of a tipping point.

Also in April, the renewable energy sector was projected to have generated more electricity than coal, according to a separate report published by the Institute for Energy Economics and Financial Analysis. That transition was partially driven by seasonal issues.

At the same time, America has drastically cut back on its appetite for coal. Since peaking in 2008, US coal consumption has plunged 39% to the lowest level in 40 years, according to the US Energy Information Administration.

Power companies are increasingly relenting to pressure from customers and states to adopt cleaner energy.

Con Edison (ED), one of the largest investor-owned utilities, acquired solar and wind projects worth $2.1 billion last year. The company is now the second largest solar producer in North America.

Minneapolis-based Xcel Energy (XEL) has gone from a coal-first power company to one aiming to deliver zero-carbon electricity by 2050.

Renewables are even starting to put pressure on natural gas, which is a cleaner-burning fossil fuel.Wind and solar power generation scheduled to come online could displace up to 1.42 billion cubic feet per day of gas demand for electric power, according to a report published on Monday by energy analytics company Drillinginfo.

"Renewables are going to get cheaper and cheaper and cheaper. We're not done," said McDermott.

[Read more here]


Capacity isn't the same as output.  Wind and solar output is 20 to 50% (offshore wind) of nameplate capacity.  Even though renewables output beat coal output in April, it will be a few years before that happens for the year as a whole.  As coal power stations are shuttered and more renewables are rolled out, though, it seems inevitable that that will happen.

US fracking unprofitable

Two pieces from IEEFA.

Despite the hype of lower breakeven prices, and despite the hype around longer laterals, energy digitalization, and other technological breakthroughs, most shale companies are still not profitable.

In fact, roughly 9 out of every 10 U.S. shale companies are burning cash, according to Rystad Energy. The Oslo-based consultancy studied 40 U.S. shale companies and found that only 4 of them had positive cash flow in the first quarter of 2019. In fact, the number of companies with positive cash flow was lower than it was previously, and total cash flow from the group fell from $14 billion in the fourth quarter to just $9.9 billion in the first.

“The gap between capex and [cash flow from operating activities] has reached a staggering $4.7 billion. This implies tremendous overspend, the likes of which have not been seen since the third quarter of 2017,” Alisa Lukash, Senior Analyst on Rystad Energy’s North American Shale team, said in a press release.

U.S. shale drillers have historically loaded up on debt in order to continue to finance their cash burn. But investors have soured on the sector, finally waking up to the fact that shale drillers by and large are money losers. According to Rystad, no shale company has made a public offering since the collapse of oil prices last year, the longest stretch of time with no public capital issuance since 2014. “Recently released data, which confirmed dismal first quarter earnings, only served to cement negative market sentiment,” Lukash said. Investors are fed up and are “leaving no room for undisciplined spending in 2019.”

[Read more here]

The North American fracking sector once again spent more on drilling than it realized from sales of oil and gas, according to a briefing note released today by Sightline Institute and the Institute for Energy Economics and Financial Analysis (IEEFA).

The brief, Red Ink Keeps Flowing for U.S. Fracking Sector, traces a cross-section of 29 oil and gas companies that combined reported more than $2.5 billion in negative free cash flows during the first quarter of 2019.

“These results were even worse than in the fourth quarter of 2018, when the same group notched up $2.1 billion in negative cash flows,” said lead author of the report Clark Williams-Derry of Sightline. “We are seeing a continuation of the overall downward trend that confirms underlying weaknesses in the fracking business model.”

The dismal Q1 cash flow performance came despite a 16 percent quarter‑over‑quarter decline in capital expenditures. But operating cash flows fell even faster, widening the industry’s cash flow gap.

“These companies keep having to dip into cash reserves or sell off assets to remain afloat,” said IEEFA financial analyst Kathy Hipple who co-authored the report. “Investors are taking notice and it has become increasingly difficult for the companies to obtain capital.”

The Sightline/IEEFA analysis found:

• US fracking-focused oil and gas companies continued their decade-long losing streak through the first quarter of 2019.

• A cross-section of small and mid-sized U.S. E&Ps (Exploration and Production companies) reported $2.5 billion in negative cash flows from January through March 2019.

• Negative cash flows have soured investors on the sector, constraining the oil and gas industry’s ability to tap debt and equity markets.

• “From 2010 through early 2019, the companies in our sample racked up aggregate negative cash flows of $184 billion, hemorrhaging cash every single year,” said Williams-Derry.

[Read more here]

We all know that fracking has been an environmental disaster.  It's also been a financial one too.  How much longer before the whole Ponzi scheme collapses?  Fracking is what keeps US gas cheap.  When that stops, gas's replacement by renewables plus storage will accelerate.