Cutting Methane from the Oil and Gas Sector by Improving Inspections and Compliance

The meteoric rise of shale oil and gas drilling in the United States poses significant challenges for reducing greenhouse gas emissions. It is estimated that about 2 percent (13 billion kilograms) of natural gas production is leaked from U.S. facilities each year, contributing aggressively to climate change. Yet regulators and many firms are unable to comprehensively monitor emissions – relying on infrequent on-site facility inspections to detect leaks. Without reliable estimates of methane emissions, regulators cannot efficiently target leaks, incentivize their prevention, and achieve climate benefits. Now, advances in remote sensing technology offer a low-cost alternative, enabling precise measurement of methane emissions at scale.

The epicenter for work on this challenge is largely the state of Colorado. Home to a sizeable and growing shale oil & gas industry, the state was also the first to pass regulations aimed at reducing methane emissions from oil and gas operations and remains on the forefront of methane regulation. Realizing the rare position of Colorado, UChicago scholars at the Energy & Environment Lab (E&E Lab) formed a unique partnership with the Colorado Department of Public Health and Environment to identify tools that can successfully address the gap in methane emissions monitoring and enforcement.

This groundbreaking project leverages predictive modelling, remote sensing technology, and field evaluations to improve inspection targeting, increase operator compliance, and, ultimately, to reduce methane emissions from oil and gas facilities. The E&E Lab has developed a machine learning model that leverages historical state inspection data to predict the location of methane leaks. The state is now incorporating the model’s predictions as part of its inspection targeting strategy for FY2022. The E&E Lab and state are also now launching a randomized control trial varying the information provided to firms about 1) leak risk, and 2) detected leaks, and then measuring changes in methane emissions from oil and gas facilities by applying a novel monitoring technology.

If scaled, our approach could fundamentally change emissions monitoring and enforcement, and serve as a proof-of-concept on how to decrease methane emissions from the oil and gas sector.

This study will inform the development of a cost-effective and scalable compliance framework for methane emissions in Colorado and would represent another breakthrough application of novel technology to increase regulator efficiency.