For a world that was serious about cutting the quarter of the world’s emissions that come from methane, you would be expecting a boom in electric valve actuators.
If your response is, “a what?” you are not alone. But this humdrum piece of equipment is one of the lowest-hanging fruit if we want to rein in leaks of methane, which warms the atmosphere 72 times as rapidly as carbon dioxide.
At the 2021 Glasgow climate conference, global leaders unveiled the Global Methane Pledge, a promise to cut emissions of the gas 30 percent by 2030. Nearly four years on, progress is not just falling short — it is non-existent. Our failure to replace millions of devices that routinely vent CH4 into the atmosphere is a sign of how lackluster efforts have been.
Actuators are ubiquitous throughout the oil and gas industry, which uses them as automated taps to control pressure and flow in the millions of kilometers of piping connecting petroleum fields to refineries and processing plants. Traditionally they are powered not by electricity, but by the pressure of the gas itself. The side effect of that method is that they are constantly leaking small amounts into the atmosphere.
Across more than 6 million such devices in the US alone, this pollution adds up: More than half of methane leaks result from such pressure-powered controllers. A single one can seep 260 million cubic feet (7.36 million cubic meters) of gas a year, equivalent in emissions terms to burning 33 barrels of oil.
There is a better way of doing things. Electric actuators cost US$3,500 and, hooked up to a solar panel, could be set up anywhere. They avoid the routine venting caused by traditional controllers, while also sending useful data back to operators. The initial cost is higher, but they pay for themselves in a few years, thanks to lower maintenance costs and revenues from all the gas that stays in the pipe.
How is that business doing? Not so great. Rotork OLC, a British manufacturer with about half the North American market for wellhead electric actuators, is currently trading around its lowest valuations in nearly a decade. The odds of a quick retrofit at the millions of operating sites seem remote. Despite the US Environmental Protection Agency in May last year finally mandating low-emission controllers on new wells after three years of wrangling, Rotork is not expecting more than 40 percent to go electric until 2040.
The idea behind the Global Methane Pledge was that fossil-fuel producers were leaving money on the table by wasting gas in leaks and oilfield flares. With US gas priced at US$5.54 per million British thermal units at the time and global consumption forecast to increase 21 percent by 2040, the economics of installing new equipment to turn the waste into revenue seemed compelling.
Things look different now. Gas prices are one-third lower, while demand is not expected to ever increase more than about 5 percent from current levels. Optimists about voluntary promises have had a brutal lesson in the efficient markets hypothesis. If there was really a financial advantage in replacing gas-leaking actuators with less polluting ones, the industry would have done it already.
That is a small but telling symptom of a wider failure.
Look at the latest estimates of methane emissions by the International Energy Agency (IEA), and you would see no sign of change. About halfway to the pledge’s target date, pollution by the fossil-fuel sector is still running at roughly the level it was at the start of the decade. If the US under former president Joe Biden was unable to get the petroleum industry to make the most basic of plumbing upgrades to cut its carbon footprint, what hope is there that the likes of Russia and Iran would do the same?
To the extent we have made any progress on methane in recent years, it has come not from the earnest do-gooders in Glasgow, but the worst actors on the global stage. Russian President Vladimir Putin’s 2022 invasion of Ukraine was intended to make the world even more dependent on the biggest gas exporter, Russia. Instead, it caused consumers to switch from cheap piped methane to costlier, but more energy-secure, shipped liquefied natural gas.
That has driven up average long-term prices, and weakened the prospects for demand growth. The IEA has cut its estimates for gas consumption in 2030 by about 250 million tonnes relative to where they were at the time of the Glasgow conference. In 2050, it reckons we would be 735 million tonnes shorter. In climate terms, that reduction in demand makes about as much difference as all our efforts to clean up the industry’s waste.
The Global Methane Pledge might have failed, but our efforts to rein in emissions have not. The best prospect was always to count not on the fossil-fuel industry’s altruism or self-interest, but its ability to sabotage itself.
David Fickling is a Bloomberg Opinion columnist covering climate change and energy. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times. This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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