Can a methane-tracking satellite help reduce emissions?

Good morning and welcome back to Energy Source, coming to you from New York this week.

The renewable energy industry is up in arms about tough new capital rules designed to make the banking system safer and guard against financial crisis risks.

The so-called Basel III endgame proposal, being drawn up by the Federal Reserve and other banking regulators, seeks to increase the amount of capital banks must hold on their balance sheets.

The biggest US banks including JPMorgan Chase and Bank of America have criticised the measure, arguing that higher capital requirements would increase borrowing costs and push lending outside of the regulated banking sector. My FT colleague Amanda Chu has a story this morning detailing warnings from the renewable energy industry that it could be a disaster for the sector.

Our main item today reports on the successful launch of a new satellite yesterday that promises to keep the oil and gas sector honest with regard to its methane emissions. But is it revolutionary or evolutionary? Read on to find out. Thanks, Jamie

Can a methane-tracking satellite make a difference?

When scientists at the non-profit Environmental Defense Fund began researching methane emissions from US oil and gas facilities just over a decade ago they made a shocking discovery: the problem was much worse than anyone realised.

The industry was emitting 60 per cent more of the planet-warming gas than the US Environmental Protection Agency had estimated, mainly because of leaks in piping and other infrastructure and the venting of methane into the atmosphere.

Companies and regulators didn’t have the right tools to detect, measure and prevent these emissions from global operations, according to Steve Hamburg, the non-profit group’s chief scientist, who teamed up with Harvard University’s Steven Wofsy, to figure out ways to solve the problem.

On Monday this collaboration delivered a powerful new tool to battle emissions with the launch of MethaneSAT, a methane-tracking satellite which blasted into orbit aboard a SpaceX rocket.

“The key here is that for the very first time we will have empirical data for effectively the entire oil and gas production ecosystem,” Hamburg told journalists at a pre-launch event.

“We can really reduce those emissions and we can do it rapidly and see the benefits.”

Slashing methane emissions is one of the fastest ways to fight global warming. Experts estimate it is responsible for almost a third of global emissions-induced increases in global temperatures since the start of the industrial era. The invisible gas is more than 80 times more potent than carbon dioxide at trapping heat in the atmosphere over a 20-year timescale.

MethaneSAT is not the first satellite capable of detecting methane but it has powerful technology that is exciting researchers. Its precision instruments can detect small leaks of methane as low as three parts per billion in the earth’s atmosphere. But it also has a high spatial resolution over a wide field of view, which should enable it to identify so-called “super-emitter” events that typically occur over short-term periods.

Obtaining the satellite imagery and emissions data is just one piece of the puzzle. The defence fund has partnered with Google to access its cloud, mapping and artificial intelligence capabilities to crunch the vast amount of data produced by the MethaneSAT, which will circle the globe 15 times a day.

This data will be provided to regulators, companies and individual researchers to enable rapid response to methane leaks and enforcement of tough new regulations aimed at reducing emissions. MethaneSAT should make it possible to compare emission loss rates across major oil and gas regions worldwide and their performance over time with more accuracy.

“This is a tool for accountability,” said Mark Brownstein, the environmental group’s senior vice-president of energy transition.

“This is a tool that could be used to name and shame companies who are poor emissions’ performers and that’s true. But I like to think of it as . . . a tool that can help document progress that the leading companies are making and reducing their emissions.”

Most experts interviewed by Energy Source predict MethaneSAT will make a difference in the fight against methane leaks, although it is unlikely to be the “revolutionary” tool initially envisaged by the non-profit group.

Antoine Halff, co-founder and chief analyst of Kayrros, a company that develops technology used to analyse satellite images, said other satellites had launched in recent years that provided data that could be used to detect methane emissions. He said the “absolutely transformative” element in recent years is the massive advances in computing power.

Halff said: “We could not do what we do without machine learning and AI. We process tens of terabytes of data every day so this could not be done by hand.”

Research by Kayrros was instrumental in detecting one of the worst methane leaks ever recorded: a blowout and fire at a remote oil well in Kazakhstan last year that leaked 127,000 tonnes of gas (an environmental impact comparable to driving 717,000 petrol cars for a year).

The company that owns the well, Buzachi Neft, denied that a substantial amount of methane leaked into the atmosphere but was later fined by local regulators.

Plans by the US and EU to introduce penalties linked to methane emissions — and greater understanding of the problem within the industry — is driving change.

At the COP28 climate conference in December, companies representing about a third of global oil and gas production including ExxonMobil, TotalEnergies, BP and Shell pledged to stop routine flaring of excess methane and to eliminate nearly all leaks of the gas by the end of the decade.

Energy Source recently visited Exxon’s Houston headquarters to tour its non-stop operation aimed at detecting and responding to methane leaks at its operations in the Permian Basin. The company is using ground-based sensors and aircraft flyovers to monitor methane and is exploring satellite monitoring with a technology company, Scepter.

“We’ve seen satellites as part of the solution for a long time,” said Matt Kolesar, Exxon’s chief environmental scientist. “If you get a big enough network or constellation [of satellites], you can have high-frequency monitoring. You could get to places you couldn’t otherwise with other technologies.”

He said there are limitations in using satellites over water and in areas with a lot of cloud cover or mountains but noted the technology is evolving rapidly. Exxon will soon conduct an experiment with methane sensors installed on a hot-air balloon as it seeks to hone its use of detection technologies. It aims to slash methane intensity at its operations by 70-80 per cent compared to 2016 levels by 2030.

With a growing number of satellites keeping watch over the world’s oil and gas facilities, there should be growing momentum behind the drive to cut methane emissions.

Power Points

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Energy Source is written and edited by Jamie Smyth, Myles McCormick, Amanda Chu and Tom Wilson, with support from the FT’s global team of reporters. Reach us at energy.source@ft.com and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.