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Emerging Jobs, Suppressing Leaks

Vignesh Gowrishankar, Staff Scientist (Sustainable Energy), New York

Finding and fixing natural gas leaks from the oil and gas sector now constitutes an emerging industry, with the potential to create a large number and variety of well-paying jobs, according to a new report released by Datu Research (prepared for Environmental Defense Fund). The industry currently encompasses 76 firms that manufacture equipment or offer services to control natural gas leaks, in over 530 locations across 46 states. The industry’s employees represent more than 30 different job types, and are paid a median hourly wage of $30.88 (compared to $19.60 for all U.S. jobs).

 US map of leak mitigation.png

U.S. map of employee locations in the methane mitigation industry
Source: Datu Research, The Emerging U.S. Methane Mitigation Industry

Natural gas leakage from the oil and gas sector is a significant problem. Natural gas is mostly methane, which when released unburned into the atmosphere has more than 80 times the climate warming potential of carbon dioxide, over a 20-year timeframe. Natural gas leakage also contains other smog-forming and toxic pollutants. So, reducing the leakage has critical climate change benefits, as well as local air quality and health benefits. What’s more – capturing this leaking gas can save the sector an estimated $1.8 billion.

NRDC’s 2012 report Leaking Profits and ICF’s recent report from earlier this year have confirmed the environmental and economic benefits of reducing natural gas leakage. While the best thing we can do to combat climate change is to move away from fossil fuels to cleaner, renewable sources of energy, we also have to do everything we can to plug climate change pollution from fossil fuels that are still being developed and burned. Therefore it’s crucial that all of this needless methane leakage is plugged.

However, the oil and gas industry as a whole is not doing enough to plug these leaks. According to EPA’s estimates, the industry continues to leak 7.7 million tons of methane annually. Recognizing the availability of cost-effective, and oftentimes profitable, leakage mitigation measures, EPA released standards in 2012 to limit natural gas leakage from certain new sources. But they aren’t enough by a long shot—and states like Colorado are already doing much more than EPA’s 2012 standards. Fortunately, EPA is now contemplating whether to implement enhanced standards that will address part of the remaining emissions. We think that up to half of the remaining emissions may be curbed cost-effectively with available technologies and practices, via enhanced standards that apply to existing equipment, leaks at various facilities, and oil and gas well operations.

In this context, this latest report from Datu makes impressive and encouraging findings. It analyzed the current market landscape of companies providing equipment and services solutions to the methane leakage problem. Of the 76 companies more than half were small business employing less than 500 people, but some of these companies employed thousands. Making some assumptions, a simple summation suggests that these 76 firms involved in leakage mitigation employ in the vicinity of 200,000 people. Of course, not all of them may be working on leakage mitigation, but it would be safe to say that the industry employs tens of thousands of Americans who build, sell and service controls for the oil and gas sector. These companies had more than 530 locations spread out over 46 states, but the ten states with the highest concentration of facilities were Texas, Oklahoma, Colorado, Pennsylvania, Louisiana, California, Wyoming, Illinois, Ohio and New Mexico. The best part is that these are local, well-paying jobs, with the highest wages well above $40 per hour.

Reducing natural gas leakage looks even more like a no-brainer now. From an environmental perspective – it would reduce environmental impacts, and improve local air quality conditions. From a business perspective, it would increase oil and gas sector revenue. And from an economic perspective, it would create high-quality, local jobs. What’s not to like?

Yet, I recall in 2012, before the finalization of the EPA leak mitigation standards, the oil and gas sector was up in arms about its inability to respond to them in a timely manner. Well, two years hence, it certainly looks like that the leak mitigation industry has responded, blossomed, and is poised to grow. All we need now are the right policies in place to steer the industry into implementing these vital measures at an accelerated pace. EPA and the states must charge ahead to issue enhanced standards to reduce natural gas leakage across the industry.

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