Green deal: how environmental best practices allow for a greater ROI in methane emissions regulations
In 2018, Mexico and Canada released specific regulations for methane emissions: the “Guidelines to Prevent and Control Methane Emissions in the Hydrocarbons Sector” and the “Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (upstream Oil and Gas sector)”, respectively. Despite having been in effect for the same amount of time, the implementation of the Canadian regulations is having traceable results, environmentally and economically. In this pager, reference will be made to Canadian study cases to highlight the benefits and opportunities of complying with the Mexican regulations, with economic and environmental benefits from adopting the best practices in methane emissions reduction and paving the way to Net Zero goals for 2050.
MAKING THE RIGHT DECISION: CHOOSING THE CORRECT MEASUREMENT METHOD
Companies should be very careful when selecting the methodology for emissions quantification. In contrast to Canadian regulations, where direct measurement is mandatory, Mexico’s regulations have two alternatives for quantifying gas emissions by (1) direct measurement methods, such as Optical Gas Imaging (OGI) that uses infrared technology to quantify the actual gas that is been leaked and allowing leak repairment, obtaining economic benefits and combating methane emissions; and by (2) indirect methods or desktop studies, which use mathematical or engineering calculations, software and emission factors.
Indirect methods might be appealing as the cost of the estimation may seem cheaper than the cost of direct measurement. However, these indirect methods are typically designed for overestimation and are not a preferred approach as they leave too much room for error, whereas direct measurement methods allow for precise leak detection and repair which minimizes the environmental damage. On top, as the following study cases illustrate, direct measurement methods for detection and repair bring a higher return on investment (ROI) when considered through a cost-benefit perspective.
CASE STUDY (ALBERTA)
WIN-WIN WITH THE GREEN DEAL
The lack of certainty deteriorates the risk profile for oil and gas companies. Hence facing compliance without Official Third Parties requires higher standards of compliance than normal. When technical and economic characteristics of the projects allow, regulated companies shall perform direct measurement, bringing positive economic returns and, more importantly, a positive effect on environment.
After two years of Mexican regulation publication, Mexican government is still struggling in reviewing compliance due to the lack of Official Third Parties. The absence of Official Third Parties is not a reason for not complying as regulated companies can instead obtain a favorable technical opinion from a national or international expert (according to Mexican regulations). However, submitting technical documentation to the Agencia de Seguridad Industrial y Protección al Medio Ambiente del Sector Hidrocarburos (ASEA) without the favorable opinion of an Official Third Party increases the odds of authorizing activities without complying with the regulations and, eventually, receive requests for clarifications or negligence accusations, increasing the risk of noncompliance. In the meantime, it is strongly recommended that regulated parties document their methane emissions by using direct methods to avoid noncompliance risks, and for a better environmental protection.
Note: Also about Methane , please look our One-pager of July 2020.
CLIMATE & CLEAN AIR COALITION
Methane has been responsible for 40% of global warming since the industrial revolution.
CH4 has an effect to global warming of 84 times carbon dioxide over a 20-year period.
Fossil fuels represent 36% of methane emissions.
METHANE EMISSIONS IS THE LOW-HANGING FRUIT AGAINST GLOBAL WARMING, BECAUSE:
1. Methane is a short -life gas as it remains in the atmosphere for only 12 years. Therefore, reducing methane emissions can have an impact in a couple of decades. See EPA_GHG
2. Methane can be easily commercialized. According to IEA, 40% of the world methane fugitive emissions can be fixed with a positive Net Present Value. See IEA_Abatement Cost
Talanza is honored to announce its new partnership with Infratech Corporation, through a new brand. This synergy has broaden our international presence and experience (Canada, United States, Mexico, and Colombia) in regulatory matters, as well as in planning and operating programs for reducing fugitive emissions.
We proudly present Eminent, a firm that emerges to combat global warming and support the oil and gas industry to prevent, control, and reduce methane emissions, aiming at Net Zero goals for 2050.