Why Methane Is the Hottest Thing in the Energy Industry Right Now

The gas is exponentially more potent than carbon dioxide. It's also easier to contain. That means big business for firms that mitigate it

Written by Michael McCullough

In Ottawa this past june, the leaders of Canada, the U.S. and Mexico pledged to work together to reduce methane emissions from the oil and gas industry between 40% and 45% by 2025. It’s doubtful president-elect Donald Trump will honour the commitment; on the campaign trail, he raised the possibility of dismantling America’s Environmental Protection Agency altogether. Regardless, the next 10 years look to be auspicious for companies operating in the methane-mitigation space.

Why? From a cost-benefit perspective, methane is the easiest target among the greenhouse gases (GHGs). And even in the absence of a continental regulatory imperative, properly disposing of waste gas is, increasingly, just good business.

In their capacity to trap heat in the atmosphere, not all GHGs are created equal. Methane—a compound made up of one carbon atom bonded to four of hydrogen—is, according to the Intergovernmental Panel on Climate Change, 25 times as potent as carbon dioxide. A growing chorus within the climate science community considers this an understatement, because it attempts to measure methane’s relative potency over 100 years. Methane, in fact, tends to break down in the atmosphere over 10 to 20 years, leaving CO‚‚ in its place. Within its short active lifetime, methane is actually 84 times as harmful as CO‚‚.

“That number continues to go up” the more scientists learn, says Audrey Mascarenhas, president and CEO of Calgary-based Questor Technology Inc. Helping industrial clients safely burn methane and other waste gases—the main byproducts being CO‚‚ and water—has been the focus of Questor’s business since 1994. The firm uses a patented process to combust 99.99% of methane from an oil or gas well, landfill or biodigester.

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Much of Questor’s business these days comes from Colorado, which has North America’s most stringent air quality rules for oil and gas producers. There, wells and communities are often in close proximity, and pushback from locals has all but banned the practices of flaring (burning atop a standing pipe) and venting waste gas straight into the atmosphere.

“If you look at the money spent engaging the public and landowners, this is an easy tool to create win-wins,” Mascarenhas says of Questor’s incinerators. Having an effective waste-gas disposal system makes it faster and easier for a producer to get approval to drill its next well. “All of a sudden, it’s not just a cost,” she says.

The methane opportunity is attracting companies from other sectors, too. Berg Chilling Systems is a Toronto manufacturer of thermal control structures. In 2012, it was introduced to GTUIT, a Montana company developing its own waste gas technology, which strips out heavy hydrocarbons like butane and propane, and leaves a dry residue gas. This gas, composed mostly of methane, can be used as a fuel for power generation (replacing diesel generators), compressed or sold into the natural gas grid. The challenge GTUIT was having, says Berg president and owner Don Berggren, was that the gas flow out of the wells was wildly inconsistent. “We figured out a way to have the refrigeration equipment absorb the ebbs and flows,” Berggren says. The two companies now have a joint marketing agreement and 30 units operating in the Bakken oilfield of North Dakota and Montana. In addition to well sites, Berggren says, “we’re seeing more and more midstream applications”—for example, conditioning the fuel for use in a power plant or local gas distribution networks.

The collapse of oil prices interrupted the growth of this part of Berg’s business, but “it’s coming back,” Berggren says. By replacing diesel for on-site power generation and enabling secondary revenue streams, he says, “we can provide a working solution that will improve operating efficiency.”

Should a three-nation flaring-reduction standard come to pass, it would just make what is already cost-effective a must-have for the entire industry. Mascarenhas estimates that applying her company’s technology to the methane that’s currently vented or flared could reduce Alberta’s GHG emissions by 60 megatonnes—35% of Canada’s 2020 reduction goal—at a cost of less than $1.70 per tonne. Trump may pass on that opportunity, but others will not.


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