Worried About Fugitive Methane Emissions from Fracking? Embrace Pure Cap-and-Dividend

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The current debate over “fugitive methane emissions” from natural gas systems – meaning emissions of unburned gas from the drilling site and from leakage in the natural gas transportation and distribution pipelines – illustrates the need for a broad-based climate policy.  Pure Cap-and-Dividend answers this need, covering as many anthropogenic (human-caused) sources of greenhouse gas emissions as practical so that we can address the climate crisis efficiently and aggressively.  Many other proposals to cap or tax greenhouse gases miss the mark on this front.  For example, Citizens Climate Lobby, a leading proponent of a carbon tax in the United States, advocates a tax based on the “amount of carbon emissions in fossil fuels” but ignores other sources of emissions.  Unfortunately, while limiting a policy’s scope makes it easier to explain, the simplicity comes with a cost – as the case of fugitive methane emissions illustrates.

In absolute terms, methane emissions are small relative to carbon dioxide emissions.  Similarly, the atmospheric concentration of methane is lower, around 1800 parts per billion compared to carbon dioxide at about 400 parts per million.  But methane is a potent greenhouse gas; one metric ton of methane has the same aggregate global warming effect over a 100-year timespan as about 28 metric tons of carbon dioxide, according to the IPCC’s newly released Fifth Assessment Report (AR5).  (Thus, methane is ascribed a “global warming potential,” or “GWP,” of 28.)  The number is even higher if you consider a shorter period.  (For an extended discussion of global warming potential of various greenhouse gases and the subjectivity inherent in determining it, see Section 8.7.1.2 of Chapter 8 of the AR5.)  The Environmental Protection Agency, following reporting guidance from the UNFCCC, uses a lower (outdated) GWP of 21 based, but even using this number, once converted to its “carbon dioxide equivalent,” methane accounts for about 8.7% of the United States’ greenhouse gas footprint according to EPA’s recently released draft Inventory Of U.S. Greenhouse Gas Emissions And Sinks: 1990-2012.  That’s far too much greenhouse gas to ignore.

The second largest source of anthropogenic methane emissions in the United States is fugitive emissions from natural gas systems (natural gas is primarily methane), according to EPA’s draft GHG inventory.  (“Enteric fermentation,” gas produced by livestock, tops the list.)  Moreover, there is a heated debate over the accuracy of EPA’s estimates with many researchers asserting EPA far underestimates fugitive emissions from fracking and from leaks in the gas transportation and distribution systems.  Settling the ongoing scientific debate on that topic is well beyond the scope of this discussion and we set that controversy aside (more or less) except to make three general observations.  First, for any emissions reduction program to be effective we need the best information possible.  Continued research on this front is critical.  Second, even using EPA’s figures, fugitive methane emissions from natural gas systems are significant.  EPA calculates these methane emissions at 127.1 Tg CO2 Eq (meaning 127.1 billion metric tons of carbon dioxide equivalent) annually.  By comparison, EPA calculates annual emissions from landfills in the US at 102.8 Tg CO2 Eq.  And third, further study will almost certainly result in more accurate estimates of emissions.

At heart, a well-designed cap-and-dividend program amounts to an orderly phase out of the vast majority of human-caused greenhouse gas emissions.  Excluding any major source of emissions, however, makes the program less effective.  Consider how a cap-and-dividend program would affect the relative use of natural gas and coal, the fossil fuels that currently dominate United States electricity production.  Natural gas emits about 55% of the carbon per unit of energy produced when burned compared to coal.  Therefore, if we require electricity generators to purchase emissions credits for each ton of carbon dioxide they emit when burning fossil fuels, those burning natural gas need purchase only about 55% of the amount those burning coal need for equivalent amounts of energy production.

But suppose that, for at least some of the gas burned, fugitive methane emissions from drilling and transporting the gas is so high that the impact of the methane released counters the benefits of burning gas compared to burning coal, as some studies suggest.  (Other studies suggest significant emissions but probably not to so much as to make coal preferable.)  If a cap-and-dividend program (or other emissions reduction program) does not take such these fugitive emissions into account, it could be favoring the wrong fuel.  Granted, the program would still favor renewable resources (which generally require no emissions permits to run) over both coal and natural gas, but don’t we also want to minimize emissions from fossil fuels even as we are phasing them out?

Moreover, an emissions cap (or other climate policy) that overlooks fugitive methane emissions may mean that we miss out on some relatively low-cost emissions reductions.  One of the benefits of a cap-and-dividend program is that instead of merely requiring emitters to meet minimum requirements, it incentivizes them to implement further reductions – and to innovate – in order to minimize the number of emissions permits they need to purchase.  Put another way, if the companies drilling, transporting, and burning natural gas must pay for the fugitive methane emissions coming from their operations, you can rest assured that they will work harder to find the best ways to reduce these fugitive emissions.

Achieving the massive reductions of greenhouse gas emissions necessary to combat climate change is a tall order.  A broad-based program, like Pure Cap-and-Dividend, allows us to achieve greater reductions at a lower cost because it addresses a wider variety of emissions than other proposals, including fugitive methane emissions from natural gas systems, and better incentivizes industry to reduce greenhouse gas emissions throughout the full energy supply chain.