DEC-iding to stay the course

Further thoughts on the rebuttal letter & is 23% the 2023 number?

Thanks to Bloomberg for today’s photo showing a Diversified tank leaking in 2021

Dear reader

I felt it necessary to write another article following DEC of Top Trumps covering DEC’s response to Honorable Pallone.

In let’s probe deeper still we saw how there was a large disparity between DEC’s audited methane emission and those of in the NGSI. 0.21% vs 0.71% for 2022. Drawing your attention to Page 4 of the Clean Air report:

Assumptions.

Assume makes what out of u and me?

Now let me quote Rusty:

“Because of our heritage of being publicly traded on the London Stock Exchange since 2017, we have utilized the Intergovernmental Panel on Climate Change (“IPCC”) reporting format for emissions reported in our Sustainability Report. This approach differs slightly from EPA reporting, which prescribes specific emissions factors regardless of engineering estimates or direct measurement factors. In our 2019 inaugural Sustainability Report, we explained that the EPA established these prescribed emission factors in the 1990s to represent potential average emission rates for equipment such as pneumatic controllers, pneumatic pumps, and equipment leaks. The EPA has not adjusted these prescribed factors in nearly 30 years.”

Reader, this is why the EPA report shows 0.71%. It uses estimates. Not direct measurements. Isn’t it more than a little ironic that the whole premise of Bloomberg Green’s article was based on direct measurements 3 years ago! The EPA are expected to update their methodology in 2024.

We further know that 0.28% was reduced to 0.21% in 2022 through these measures set out in the letter. That’s a 25% reduction. What percentage do we think for 2023? Read on reader! Read on!

Pneumatics

We can calculate using the 1H23 report and the letter that 56 well pads (111-(95-40)) were converted in 2023 reducing 28,500 MT Co2e. Knowing that in 2022 there were 686k MT Co2e that’s a 4.2% reduction of methane in 2023 just from the pneumatics and before any improvements to tanks, pipeline and compressors.

Inspections

We further know about 3,400 wells were not inspected in 2022.

We know that about 54 wells were not inspected in 2023. So let’s assume they are all leaking - because we don’t know they’re not. Not been inspected, see? Assuming 1Kg an hour, 24 hours a day, 365 days a year adds up to 473mT of methane. Ouch! Pessimistic? Probably, but lets see what happens to the 2023 numbers.

Industry Firsts

Dec have achieved Industry Firsts

A non-technical assumption would be that it is sheer laziness or greed why continuous monitoring is not rolled out. Clearly the answer is more nuanced.

…Which is why DEC takes further measures using BEST-IN-CLASS LiDAR.

Leaks

Bloomberg’s “unscientific research” (their words reader not OB’s) found 26 wells out of 44. Were these cherry picked in order to provide the basis for the article? (Because doing that would be a good reason for their use of the words “wasn’t scientific”, don’t you think?)

59% of 44 wells is 26 wells out of 44; using 5000 PPM equipment. Source: Bloomberg

Diversified, whose equipment is 5000x better than Bloomberg’s noting their equipment dectected 5000 PPM vs 1 PPM as below, found 2.25% were below 1 part per million in 2023. (We don’t know how much of the remaining 2.25% were above 500 PPM which is the EPA’s definition of a leak, just that they weren’t zero)

DEC equipment capable of detecting 1 part per million (PPM) - Source: The letter

2.25% is 1530 out of 68000 wells - Source: The letter

Let’s say 10% of those were above 500ppm. (I know I know, now OB is assuming, but when you’re doing 246,000 surverys in a year, you’re not going to go from zero to >500 unless there’s a massive rupture - think of a dripping tap). Even 10% may be too high.

1Kg/hour is the upper limit but let’s go with that number to be pessimistic. Source: The letter

So 153 wells out of 68000 dispensing 1Kg of methane/hour for say 14 days, gets to 54Mt of Methane.

Conclusion

Adding in the earlier 473Mt arrives at 527Mt. So compared to 686Mt in 2022 that’s a further 23% reduction in 2023. An OB estimated NGSI reduced from 0.21% to potentially 0.12% for 2023 (the 23% reduction as a ratio to higher natural gas volumes in 2023 vs 2022 based on the acquisitions). One must, of course, consider pipeline leaks, tanks and compressor as other sources of emission - of course - but one can guesstimate the 2023 data being substantially better than 2022’s 686Mt of Methane (beyond the 4.2% reduction we know about).

Can’t you, reader?

A final thought: In the future will DEC listen?

Rusty and team will have, no doubt, have recently read about this emerging technology for leak detection.

Hear the leak. Hear it squeak. Fix it quieek.

Have a good weekend and this is, guess what, not advice.

Oak