(John Kemp is a Reuters market analyst. The views expressed are his own)
By John Kemp
LONDON, June 12 (Reuters) - Shale gas supporters say it can cut greenhouse emissions by replacing dirtier fuels such as coal, but critics warn it is worsening climate change due to methane leaks from shale wells.
Because methane is so much more potent than carbon dioxide as a greenhouse gas, even small emissions can have a huge impact. Depending on the time horizon, 1 tonne of methane has the same global warming potential as 25-72 tonnes of carbon dioxide, according to the Intergovernmental Panel on Climate Change.
As shale becomes progressively more important (it accounted for 40 percent of all U.S. natural gas production in 2012), accurate estimates of just how much methane is being lost into the atmosphere become essential, yet the data remain surprisingly sparse.
Shale critics have seized on a 2011 research paper by a team from Cornell University that estimated as much as 3.6-7.9 percent of the methane from shale production escapes into the atmosphere over the lifetime of a well.
These fugitive methane emissions make the global warming potential of shale gas greater than for conventional gas or oil and as bad or even worse than coal, according to the Cornell team.
“The large greenhouse gas footprint of shale gas undercuts the logic of its use as a bridging fuel,” the team concluded. “Shale gas isn’t clean and shouldn’t be used as a bridge fuel.”
In 2011, the U.S. Environmental Protection Agency (EPA) weighed in with its own revised estimates for emissions from gas wells, which showed that the problem was much worse than originally thought, and began pushing for stricter regulation under the Clean Air Act.
Now the industry is hitting back by accusing the EPA of “mismeasuring” methane leaks. “EPA’s methodology for estimating these emissions lacks rigour and should not be used as a basis for analysis and decision-making,” according to a report prepared by consultants IHS CERA.
“The assumptions underlying EPA’s methodology do not reflect current industry practices,” the report claimed. “As a result its estimates of methane emissions are dramatically overstated.”
For both conventional and shale gas, most of the life-cycle emissions come when it is burned, but production, processing, transportation and distribution also result in small but significant emissions of methane and carbon dioxide.
In 2011, methane and carbon dioxide emissions from production, processing, transmission and storage amounted to the equivalent of 177 million tonnes of carbon dioxide, about 2.6 percent of all U.S. emissions, according to the EPA’s “Inventory of greenhouse gas emissions and sinks”.
Gas wells, rather than leaks from processing plants and pipelines, are the largest source. Emissions from well sites accounted for about 36 percent of the total in 2011, according to the EPA, with smaller shares from processing plants (23 percent), transmission and storage (25 percent) and distribution (18 percent).
Conventional gas wells release methane during workovers and also when water and other liquids are periodically removed from the well to improve gas flow. The precise amount is disputed; EPA puts it more than 10 times higher than the industry’s estimate.
But the real controversy centres on how much methane is released when unconventional wells are drilled and fractured. “Methane emissions are at least 30 percent more and perhaps more than twice as great as those from conventional gas,” the Cornell team warned.
Once a well has been hydraulically fractured, it enters a flowback period, lasting three to 10 days, when natural pressure in the reservoir pushes the drilling and fracking fluids back to the surface before gas production begins.
Initially the flowback stream is mostly water, but over time the well produces an increasing proportion of gas, until the proportion eventually rises high enough and the well is finally connected up to the gas-gathering system.
The question is what happens to the methane that is produced during the flowback period.
Flowback fluids are diverted to an open pit or enclosed tank. In the past, methane was allowed to separate and escape into the atmosphere, a process known as cold venting. Most states now require the methane to be flared, which converts it to less harmful carbon dioxide, or captured and sent for processing.
“Cold venting is no longer industry standard practice ... although it was common as recently as a decade ago,” IHS CERA admits. “Awareness of the harmful effects of cold venting has caused the practice to fall out of favour.”
The EPA has been pushing the concept of reduced emissions completions (RECs), also known as green completions. “Portable equipment is brought on site to separate the gas ... produced during the high-rate flowback and produce gas that can be delivered into the sales pipeline,” according to the agency.
But IHS CERA says that “for the most part, the proposed regulations are already standard practice” and “the proposed standards have the potential to codify good operating practice” but they are unlikely to reduce emissions much further.
Estimates for methane emissions from shale wells vary so much because of different assumptions about exactly how much gas is vented, flared and captured.
“Significant opaqueness surrounds real world gas handling practices in the field, and what proportion of the gas produced during well completions is subject to which handling techniques,” according to researchers at the Massachusetts Institute of Technology (MIT) Joint Programme on the Science and Policy of Climate Change.
The Cornell team assumed all flowback methane was vented and estimated that methane emissions could be up to 3.2 percent of all gas produced from the well over its lifetime. EPA’s estimates assumed a proportion was flared and some was captured, but still underestimated the captured share, according to MIT.
The MIT researchers assumed that 70 percent of potential fugitive emissions are captured, 15 percent are vented and 15 percent are flared, which they claim reflects “current field practice”. If the MIT assumptions are correct, the figures for emissions from shale gas wells would be cut by between two-thirds and three-quarters.
There are strong safety and economic reasons to limit venting.
Gas is flammable and in some circumstances explosive. If all the gas being produced during flowback were vented, it would create a toxic and hazardous situation around the well site, and fires and explosions would be common. But the shale revolution has not been accompanied by a sudden upsurge in exploding wells, CERA notes, which calls into question whether the Cornell and EPA assumptions about widespread venting are correct.
Venting flowback gas would also make little sense financially. If up to 3.2 percent of all the methane eventually produced from shale wells were indeed vented during completion and flowback, as the Cornell team claims, that would amount to losses of almost 7 million cubic metres of methane per well, according to MIT.
At wellhead prices of $4 per million British thermal units, revenue losses would amount to $1.2 million per well, which exploration and production companies could ill afford. Industry-wide losses would run into hundreds of millions of dollars per year.
According to MIT, the costs for capturing potential fugitive methane are modest.
“For the vast majority of contemporary shale gas wells, the revenues gained from using reduced emissions completions to capture the gas produced during a typical flowback cover the cost of executing such completions,” MIT concluded. That would tend to support industry contentions that cold venting is no longer common.
Given estimates that the vast majority of completion emissions are already being captured, then “the production of shale gas ... (has) not materially altered the total greenhouse gas emissions from the natural gas sector”, the MIT study said.
The only way to settle the controversy is to compile more data on how flowback methane is handled.
EPA, the American Petroleum Institute (API) and America’s Natural Gas Alliance (ANGA) have all begun to collect more data, but it will be some time before robust and comprehensive emissions estimates are available. (editing by Jane Baird)