April 27, 2023

Managing Methane: Don’t Let Money Just Leak Away

Modernizing a leak detection program is one of the fastest ways to improve your emissions and your bottom line.

Main Idea

A robust and ever-evolving leak detection and repair (LDAR) program is critical to timely remediation of methane emissions.

  • Leak detection technology has greatly improved in the past decade, allowing oil and gas operators, along with other stakeholders, to survey large areas of operations with much less capital - financial or human.
  • The technology now allows a multi-media record of leaks and methane emissions, making the days of recording leaks and repairs in a logbook inadequate.
  • Modernizing a leak detection program is one of the fastest ways to improve your emissions and your bottom line.
Iconic Air Leak Detection Platform

Why It Matters

  1. Lost Product = Lost Revenue: Even with the Henry Hub price of gas hovering around $2/mmbTU, losing product isn’t ideal. Wasted product can have a sizable impact on your balance sheet - in terms of both revenue and expenses. Just 1,000 metric tonnes of methane emitted could be over $120,000 of lost gas sales.
  2. Climate Impact of Methane: Methane is considered a potent greenhouse gas (GHG) that is a material contributor to future climate impacts. Estimates put methane at 20x to 100x more potent than CO2 when it comes to potential climate impact. Even using US EPA’s factors, one metric tonne of methane is like emitting 25 metric tonnes of CO2. Since the oil and gas industry one of the largest emitters of methane, it has a very real opportunity to reduce methane emissions globally.
  3. Carbon Costs Money: With ongoing changes to regulations and policies both domestically and globally, the cost of carbon is moving from a social cost to one that hits your financial ledger. The proposed methane fee associated with the US Inflation Reduction Act would penalize a company approximately $1,000 for each metric tonne of methane emitted beyond a threshold. That’s a $1,000 fee for 60 - 70 mmBTU of natural gas - over $10/mmBTU of gas
Methane mitigation is an economic and environmental win-win. As natural gas is composed mostly of methane, emissions of methane from the oil and gas value chain represent a wasted product that translates into roughly $34 billion of lost revenue per year, at average 2017 delivered prices. - (UNEP)

6 Actions You Can Take

Note that there are very specific regulations regarding LDAR programs, and complying with those regulations and permitted requirements, if any, are fundamental. This drives our recommendations for a strong leak detection and reporting program for your company.

  1. Know the requirements you have to comply with and create time-bound actions to stay in compliance. Stay up-to-date with federal and state regulations regarding leak and repair activities, documentation, and regulatory filings. State regulations can change faster than federal regulations and sometimes go beyond what is required by US EPA.
  2. Utilize digital for recordkeeping and reporting. Documentation and recordkeeping can trip up many well-meaning and well-operated companies. While one might be doing all the right things in the field, a lack of transparent and accessible documentation of all leak and repair activities can result in challenging audits, penalties, or increased compliance requirements. Digital tools that can help with scheduling surveys and leaks, along with documentation of observations and repairs information helps reduce the burden of recordkeeping and reporting.
  3. Leverage data visualization and analytics to become proactive. As companies pivot from passive compliance and reporting to proactively reducing or eliminating leaks, an analytics and visualization solution becomes incredibly useful. Using data to detect trends and patterns while also tracking leak survey findings allows operators to prioritize emission reduction activities along with investment around replacement and maintenance.
  4. Deploy and reconcile “boots-on-the-ground” surveys with other advanced methane detection technologies. As new methane detection technologies become routine, operators should being able to reconcile observations made on the ground with OGI and AVO surveys to those using unmanned technologies, providing increased accuracy on emissions as well as improved monitoring for unplanned events and shortened repair periods. Data and surveys from the variety of fragmented technologies will impede organizations from making more accurate emissions estimates and stifle repair and reporting activities.
  5. Communicate the impact of the LDAR program. Increasing scrutiny on methane in the oil and gas industry means stakeholder communication is paramount. This communication must be tailored to the usually non-technical audience. Use visuals to show trends, reductions, and forecasts of the methane emission reduction will articulate your program strongly to these stakeholders. Contrast this with communicating methane leak surveillance, repair, and preventative maintenance data to your operations and management teams.
  6. Recognize that there is not a “one-size-fits-all” solution. As methane detection technology evolves, not all can be successfully applied to your operations. You have to factor in climate, precipitation, equipment, oil and gas composition, neighboring operations, and costs. Given the variability in operations and geographies, oil and gas operators will manage a portfolio of leak detection methodologies. While the technology in the field might vary, the data and reporting should be managed and reported through a single, consistent digital solution.

How Can Iconic Air Help

With a web-based, multimedia application, Iconic Air provides oil and gas operators with a single, centralized solution that provides the features to capture “boots-on-the-ground” leak detection work such as use of OGI and conducting AVOs and pairs that with the ability to process and visualize data from methane detection taking place using drones, aerials and continuous monitoring. With a mobile app using a managed workflow and built-in GHG calculations, the Iconic Air app keeps operators in compliance with OOOOa and GHG MRR, along with positioning themselves for low-carbon certification and managing emission reduction projects.

Case Study

Schedule a Demo

We're excited to show you how Iconic Air can help your company mitigate climate risk and ensure access to capital.

Schedule a Demo