The IRA’s methane policies could push more oil and gas companies to deploy the latest monitoring tech

Methane leaks are about to become a lot more expensive.

The Inflation Reduction Act signed into law in August includes a methane-emissions fee that would charge oil and gas companies that emit more than 25,000+ tons of CO2 equivalent per year at least $900 per additional ton of methane released into the atmosphere—the first-ever fee on a greenhouse gas in the US.

“We’ve known about carbon for a long time, because we, as consumers, produce carbon emissions. Methane is worse, in that it’s a more noxious greenhouse gas. But it’s not generally produced by things that normal people do,” Zach Supalla, founder and CEO of the IoT platform Particle, which works with companies monitoring methane leaks, told Emerging Tech Brew.

Methane is responsible for about half of current global warming so far. Some of the main sources of human-induced methane emissions are landfill sites, agriculture (you’ve probably heard about the cow farts), and oil and gas extraction.

The hydrocarbon (CH4) is more than 25x more potent than CO2 when it comes to trapping heat in the atmosphere.The effects of the climate crisis are also causing methane emissions to accelerate and the process of removing methane from the atmosphere to slow, researchers have found.

Quickly identifying leaks at oil and gas sites will be essential in enforcing this new rule and reducing methane emissions, ~30% of which come from fossil-fuel production and use, according to scientists. Pressure from investors and regulators is driving a shift in industry sentiment and growing the customer base for companies providing methane-detection equipment, experts told us.

The IRA also provides more than $1.5 billion in grants for oil and gas companies taking steps to reduce their methane emissions, and luckily, the tech used for monitoring has come a long way in the past decade.

How to measure

Detecting methane leaks used to be handled mostly via plane. By flying sensitive measurement equipment over a site, the instruments could measure the hydrocarbons in the atmosphere and calculate how much methane was being emitted.

The problem with this “episodic monitoring” is that the measurement doesn’t happen often enough, Saurabh Nitin, SVP of emissions technologies at chemical solutions and energy company ChampionX, told Emerging Tech Brew.

The industry has traditionally used handheld sensor devices that can be walked around a site as well, but this solution is still the most expensive and requires getting very close to the oil and gas equipment, Dan Zimmerle, director of the methane emissions program at the Colorado State University Energy Institute, told us.

In just the last two years, innovation in methane monitoring has made significant strides, Nitin said. Drones and satellites are providing less costly and more automated measurements from the air, and on-the-ground solutions are increasingly being adopted at oil and gas sites, according to industry insiders.

Companies from corporate giants like Honeywell, Baker Hughes, and ABB to startups like Aeris Technologies, Luxmux Technology, and NevadaNano offer tools for more continuous emissions monitoring.

“We now have relatively lower-cost sensors that you could put at some distance from the leaks and those can pick up trace gas concentrations at these downwind locations,” Zimmerle said.

This tech is known as a continuous emissions monitoring system (CEMS) or a point sensor, which is essentially a box with a solar panel attached to a post that contains a methane sensor that “sniffs” for methane 24/7.

In July 2021, ChampionX acquired Scientific Aviation, which began as a provider of plane-based measurements of air pollutants and greenhouse gasses in 2010, introduced a drone-based methane-emissions detection system in 2018, and launched its Systematic Observations of Facility Intermittent Emissions (SOOFIE) technology in 2020. The SOOFIE monitor takes five measurements per second.

Optical gas imaging systems, which use cameras and lasers, can still cost hundreds of thousands of dollars to purchase and install at a site, according to Nitin, but deploying sensor technology comes with a smaller price tag.

The cost of these systems has dropped from as high as $200,000 to less than $10,000, making continuous monitoring more affordable and enabling the data collected to be integrated into operations and decision-making, Nitin said.

“The moment that methane is detected, they will immediately trigger an action—somebody to go take a look, figure out what’s coming from it and fix that thing,” Supalla said. “So you get faster response time, which means, at the end of the day, less methane is emitted between the time that the problem starts and when it’s actually addressed.”

Particle works with methane-detection tech providers, including ChampionX, to process and relay the data collected by sensors.

While it’s still too early to determine if the IRA’s methane fee has had an impact on investment in this technology, Supalla expects industry interest to grow, as it did after regulations were put in place in Europe.

Looking ahead: The methane monitoring tech is only going to get better from here and it’s maturing very quickly, Zimmerle said.

“If we tested stuff last year, and we tested it this year, we would see significant improvements. And I imagine that's going to keep going for a couple of years,” he said.

The big question now is how the methane fee will be enforced.

“You have to assume everybody who’s going to be charged a fee is going to try to avoid that fee, unless the rules are written in a way that they can’t,” Supalla said. “And that’s going to come down to EPA action, which is still ahead of us, not behind us."