Oil boom gives lift to methane mitigation industry

WASHINGTON — New and potential mandates forcing oil companies to clamp down on methane leaking from wells, valves and pipelines could be a money-maker for the growing industry built around finding and stopping that pollution, according to a report issued Thursday.

The analysis by Datu Research, conducted for the Environmental Defense Fund, suggests that the economic benefits of the domestic drilling boom extend to the companies profiting from its regulation.

Some 76 companies with more than 500 locations spread across 46 states sell services and equipment that can help pare methane emissions from oil and gas operations, according to the report.

They include:

  • Health Consultants Inc., a 1,200-employee firm based in Houston that designs, manufacturers and sells detectors that can pinpoint methane leaks up to 100 feet away, air sampling monitors and other devices.
  • John Crane, a nearly century-old company based in Chicago, with 43 locations in the United States, including facilities in New York and Texas. The firm manufacturers mechanical seals that help keep methane from escaping oil and gas infrastructure.

Most of the companies are concentrated in states with a great deal of oil and gas activity, led by Texas and followed by Oklahoma, Colorado, Pennsylvania, Louisiana and California. Houston alone is home to 16 of the company headquarters.

Mark Brownstein, EDF’s associate vice president and chief counsel, said the report shows “American workers are standing by, ready to build the equipment necessary to drive down methane emissions.”

The industry has already seen an uptick in interest for its products and services, driven in part by the installation of oil and gas transmission equipment as well as state regulations targeting methane, a short-lived but potent greenhouse gas believed to be 28 to 34 times more powerful than carbon dioxide at warming the atmosphere. Earlier this year, Colorado became the first state to impose methane mandates on the oil and gas industry, with requirements for them to routinely search out leaks and seal them promptly.

Related: Colorado methane compromise could be model for other states

But now, the Environmental Protection Agency is considering a mix of voluntary programs and new mandates to stem emissions from natural gas flaring at oil wells, leaking equipment and hydraulically fractured oil wells. The agency issued a series of white papers examining the potential emissions of methane and smog-forming volatile organic compounds from activities and equipment along the natural gas value chain earlier this year, and it is set to make a decision on the next steps — regulatory or otherwise — by Dec. 21.

The EPA just released its latest greenhouse gas inventory, noting that methane emissions from the oil and gas sector have fallen 12 percent since 2011. The agency attributed most of those reductions to gas wells that are hydraulically fractured to stimulate production, which have seen emissions plummet 73 percent over the same time frame.

Tom Scanlon, vice president of worldwide test equipment sales with Oregon-based FLIR, a supplier of infrared detectors and thermal imaging systems, said its business has seen “a transformation” from a decade ago, when more than half of its business was tied to military surveillance, battlefield use and other government contracts.

“Some of the key technologies we used to use in the most sensitive night vision applications for the Navy SEALS and special operations are perfect for optical gas imaging,” Scanlon said in a conference call with reporters Thursday.

“We’ve seen a fast emergence of commercial technologies,” he said, crediting the sales of optical gas imaging equipment, including small handheld devices, with helping the company grow 23 percent on average over each of the past four years.

Coming crackdown: EPA looking at new mandates on methane

Brownstein noted that the methane mitigation industry supports “good-paying U.S. jobs that largely can’t be outsourced.”

According to the Datu report, the median hourly wage for the industry is $30.88, compared to $19.60 for all U.S. jobs., and 59 percent of the companies working in this space qualify as small businesses.

Methane emissions can happen all along the natural gas supply chain, beginning during production and processing at wells, following during transmission and storage and later, when the fuel is distributed. The industry, EDF and the EPA are examining leaks from pneumatic devices, valves, compressors, storage tanks and vent lines.