Good news for the environment! A transformative solution gets a boost.

If you were eating a sandwich in your living room, would you drop the wrapper in the middle of the room?

Probably not.

How about if you were walking on a street or in a secluded area? 

Reasonable people might not, but many do.

An individual wrapper might not be noticeable, but over time, it piles up and becomes ugly and a hazard.

 Gas leaks are like your wrapper. You certainly don’t want one in your living room.

You might not notice them in secluded spots.

But unaddressed, they pile up to become real problems for our environment.

If there was an easy way to cut harmful gas leaks sharply, wouldn’t you rush to implement it?

There is, and we have been telling everyone we know about it for years.

Regulators are finally doing something about it.

The good news for the environment

The US administration and environmental regulators finally embraced Pareto principles. They support a simple transformative gas leak detection method.

This month, the EPA and the Department of Energy announced $350 million in funding for 14 states. It will help states cut methane emissions from low-producing oil and gas wells. [1]

More importantly, the EPA gave the green light for aerial leak screening, which opens the door to drone-enabled leak detection. This method helps operators find and fix leaks more quickly. EPA’s final rule also includes a Super Emitter Program to detect large leaks, known as super emitters.

EPA expects its final rule, taken as a whole, to cut methane from the oil and gas sources it covers by nearly 80 percent below what they would emit without the rule.

If adopted worldwide, the total cut could be far larger. In our experience, gas leak detection in many other countries lags the USA. 

This approach is a solution we have been advocating for years. It is simple to put in place.

That sounds interesting, but why is it such a big deal for the environment, and why is it transformative?

Gas leaks in the Oil and Gas Sector

Gas leaks are a significant problem for the oil and gas sector.

No oil and gas operation we have seen is entirely leak-free. 

And even if one were, leaks occur naturally in the environment.

They represent a safety risk. 

They reduce profitability by losing valuable products.

And they do significant harm to the environment.

The Methane Focus

Methane is a harmful gas. The White House, citing the UN’s Intergovernmental Panel on Climate Change (IPCC), says a ton of methane has about 80 times the warming impact of a ton of CO2. Methane does not last as long in the environment but traps more heat. [1][2]

Methane is one of the gases that leak in oil and gas operations. In the United States, the oil and gas industry accounts for about 30 percent of methane emissions. [1]

Methane has an outsized impact. The oil and gas industry has the potential for rapid reduction. Thus, the regulators want to focus on methane in the oil and gas industry.

How regulations put the US Oil Industry in the lead…

In our view, the US EPA has been ahead of most of the world in addressing gas leaks in the oil and gas sector.

They developed Method 21, the primary method for finding leaking components in EPA’s Leak Detection and Repair (LDAR) programs. They introduced regulations to tackle the problem.

Many other oil-producing nations we know of have yet to embrace these approaches.

We believe these methods helped the USA outperform its peers from an environmental standpoint. However, there was still massive room for improvement.

But ultimately got in the way

The problem was that the recommended practices were old and cumbersome. 

Our understanding of the problem improved, as well as the technology that we can deploy.

We needed new and updated rules.

The EPA has studied sources of leaks. Statistically, they identified where leaks were occurring frequently. 

They measured the probability of leaks occurring in various equipment. They could tell you how often to expect leaks in pumps, valves, and other devices at refineries and chemical plants. Based on this information, the EPA recommended a statistics-based inspection process. They wrapped it into a comprehensive LDAR approach. At the heart of the inspection process is using Method 21 to identify leaks.

To comply, Method 21 requires an operator to test each component with a portable gas analyzer, such as a flame ionization detector (FID). A company with an LDAR program would create inspection schedules for operators. With the handheld analyzer, operators test every potential leak point. At a large facility, those can number in the thousands.

The result?

The system found more leaks than without LDAR. But it was expensive and cumbersome, and operators surveyed devices infrequently.

Some companies introduced technological innovations to make the process more effective.

Operators could use a handheld optical gas imaging (OGI) camera. Like a camcorder, it helped them see leaks quicker and more safely. But, these were more expensive, and the operator still had to visit each device.

In our experience, many compliant operators tested each device only once or twice a year. A leak could occur the day after an inspector checked a device. That leak could go undiscovered for months, until the operator returned.

That was the regulation. It was better than the rest. It worked.

But we saw tremendous room for improvement.

The administration burden

Over the years, we found that administrations approached the problem with different lenses. Political thinking and priorities often lead to unnecessary delays.

The Obama administration’s climate change agenda included a strategy to cut methane. Methane traps far more heat than CO2, ton for ton. They wanted rule changes.

A regulatory change requires significant scientific and financial evidence of the impact. It takes a long time. Regulators must invite industry participants and the public to comment on new rules. The EPA must then carefully evaluate those comments.

The Obama EPA regulators spent years driving regulations explicitly targeting methane. 

This retargeting delayed the adoption of our approach.

The change made no difference to the method itself. We could identify methane and a host of other gases. To us, all hazardous gas leaks represent a threat. Every large leak should be identified and repaired.

Operationally, our method would remain the same. We would look for large leaks independent of the gas. We could detect all the major gases, including methane.

In our view, the debate and rule change slowed the transformation of gas leak detection.

Next, the Trump Administration took over and promptly froze pending regulations for review. Without clear direction, there was little incentive to adopt new ideas. 

Then came the pandemic, which, in our corner of the industry, dramatically reduced investment, innovation, and adoption.

Many of our friends closed their businesses. We stayed resolute. Here is a piece I wrote back then: 9/11 Terror Killed My Startup Dream. Coronavirus will not

On its first day, the new Biden Administration revoked a series of Trump executive orders on energy and the environment. Sadly, they also seemed hostile to the oil and gas industry. Some of the rhetoric from Washington sounded to us like the fossil fuel industry would have to die.

Despite the bumpy start and ugly hyperbole, good sense did eventually prevail.

We kept telling the transformative story during the regulatory detours.

The Pareto Opportunity

Gas leaks are unpredictable. 

That’s why there have to be inspections.

No one can predict exactly when and where they will occur or how big they will be.

But, we have worked in transformation, strategy, operations, and quality improvements. We know about the Pareto principle.

The idea comes from the Italian economist Vilfredo Pareto. The quality pioneer Joseph Juran turned it into a general rule and gave it Pareto’s name. It is often called the 80/20 rule: roughly 80 percent of the results come from 20 percent of the causes.

In the oil and gas sectors, we expected the Pareto rule. We hypothesized that most gas leaked (by volume) would come from a few significant leaks. These are known as super emitters.

Our proposed solution leverages Pareto in gas leak detection

Our solution? Equip a drone with a gas leak detection sensor. Survey oil and gas operations more frequently, looking for large leaks.

Drones provide an overview of an operation from a vantage point a human cannot match.

We had tested drones equipped with OGI and could find leaks. But, we could only find small leaks if we got close and flew so slowly that the drone advantage went away.

The drone solution cannot replace the component-by-component survey. It does not address the regulation that operators test all devices.

However, our drone solution is excellent at taking advantage of the Pareto principle.

We could fly a drone over an operation and look for more significant leaks, which are easily detected. 

This process is much faster, less expensive, and safer. Operators can add weekly or monthly flyovers between their scheduled walk-arounds.

Large leaks found faster means dramatically lower total gas leaked.

Our friends in the industry used the solution to supplement their practices. They got the expected results. They saved more products. Total gas leaked came down. There were fewer safety concerns.

It’s better, what is the problem?

The new approach is better. 

At finding large leaks, the new approach trounces the traditional method.

So why has adoption been so slow?

The oil and gas industry is incredibly safety-oriented. It takes time to adopt new solutions. 

The EPA regulations required operators of new and modified well sites and compressor stations to survey every component with an OGI camera or Method 21. Few organizations would argue with the regulators.

Further, have you ever tried to sell new technology to a sector in an existential fight?

Many oil and gas executives we spoke with believed the administration threatened their very survival. 

Peter Drucker wrote in 1963, “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

Would you invest in new technology if your business was going away?

Good sense prevails

Earlier this month, the administration saw the light.

After we spent years pushing for new solutions, they embraced the Pareto principle. They recognized the importance of focusing on super emitters.

The administration’s final rule encourages advanced detection from the air, which includes drones. 

This month, they also announced the funding described above to help measure and cut methane. 

These changes are good news for everyone:

• For regulators, it means better data and easier monitoring and compliance.
• The oil and gas industry can comply at a lower total cost. Safety and profitability should increase.
• Drone producers and service companies can pursue a well-funded and valued opportunity.

The best news for all of us? Finding and fixing the big leaks faster is part of how the new rule aims to cut methane from covered oil and gas sources by nearly 80 percent.

For more details on these announcements, see our article here: Good Sense Prevails: Administration Unleashes Drones to Fight Methane Leaks in Oil and Gas Operations

How did I get into this?

More than a decade ago, I ran several businesses in the Middle East. These included building mission-critical information solutions and fusing information from various sources. I became interested in the disruptive value of data acquired from drone platforms.

With my long-time friend Tom McKeefery, we explored disruptive solutions. 

Early on, we identified an opportunity for drones in agriculture in Southeast Asia. We supported a drone business there led by another friend, Bryce Mitchell. Bryce was using drones to disrupt agriculture. They would spray banana plantations using drones. Airplane spraying was suitable for large fields. But, it was not cost-effective for smaller fields. It was terrible for hilly locations. The manual approach was unsafe, expensive, and unreliable. The company saved small farmers a lot of money. The more uniform application of the drone approach increased crop yield. The better crops qualified for export standards and a significant price increase. Worker safety increased. 

We learned a lot about drones’ disruptive power and scaling challenges.

It was time to move on and return to the United States. Tom and I decided to look for other disruptive opportunities. Agriculture in the United States was in a different state of evolution. We did not see a similar disruptive opportunity there.

We were lucky to connect with two innovative entrepreneurs with some exciting ideas. Andy Beck and Rich Shannon had a successful partnership. They had decades of experience advocating for the adoption of thermal imaging. Their Viper Imaging business designs and installs solutions for industrial customers. They successfully paired a drone with a high-end Optical Gas Imaging sensor. They tested it for gas leak detection, and it worked. They sold a few to customers. 

Andy and Rich are not drone-focused and quickly decided they needed a partner. These early models were cumbersome and extremely difficult to fly. But we saw the potential in the solution. Our top-down Pareto hypothesis suggested a transformative opportunity.

We knew we could make the technology more reliable. 

Our dear friend Asif Rahman, who is a technology marketing and product management Jedi, crafted up a brilliant road map. He started us down a path of looking at smart integration partnerships. He showed us how valuable the solution would be to international markets, which were still in their infancy in this solution space.

Our friends Rick Krebs and Brad Nichols knew how to build and deploy technology. They were exceptionally talented with mission-critical technology. They quickly re-engineered an integrated solution. Our friend Eric Olsen wrote a new interface between the drone and the sensor.

In August 2019, we launched our enterprise-level drone-enabled leak detection solution. We called it the Viper Vantage. We had been selling unbranded integrated solutions since before the EPA’s 2016 methane rule. We documented our ideas about the new approach:

Original Blog:  LEAK DETECTION – WHY EVERY ENERGY EXECUTIVE SHOULD KNOW THIS

Follow Up: WHY GAS LEAK DETECTION (LDAR) MUST CONTINUE TO BE A PRIORITY

We published a free eBook encouraging rethinking LDAR:

We sold several installations to early-adopting industry pioneers. They quickly showed the benefit of the new approach.

But adoption was slow. The solution was not the problem. We advocated for an approach outside the then-existing regulatory framework.

We needed to become evangelists of the new approach and solution. But, as long as we were peddling our solution, our audience was skeptical. Maybe our rationale for the new Pareto-based approach was self-interested.

As a team, we decided to stop selling our proprietary solution. Our focus shifted to evangelism. We worked on convincing everyone we could talk to about the benefit of shifting the approach.

Today, that is still our focus.

What next?

We want to see the broad adoption of drone-enabled gas leak detection worldwide.

We will speak to anyone, share our data, and connect with anyone interested in moving forward.

Our friend Billy Nichols is a compliance expert. He pores over every significant regulation. He understands their impact and what is needed to comply. He has done much LDAR work, so he understands the issues practically. He spends his days developing processes for clients looking to become compliant quickly.

Bill Dohse, another friend, spends his time doing search and rescue drone services. During our slow period, Bill began inspecting solar operations. He saw the importance of securely handling massive amounts of data. He is working on technology that improves the management and analysis of field data. Some solutions applied to search and rescue or solar farms also work for gas detection.

Our industry expert friend David Cobb has been in oil and gas field development since he graduated as a petroleum engineer from Imperial College. He is spending a lot of his time educating folks in the industry on the challenges and opportunities of adopting new solutions.

Eric Olsen has partnered with several drone suppliers. He is helping them integrate gas leak detection sensors. The result is a broader selection of drone-enabled gas leak detection solutions.

Brad, Rick, Tom, and I still talk to everyone we meet. We see the incredible transformative value of adopting this disruptive approach. 

We are happy to see the EPA and administration doing the right thing. It is great to see everyone getting behind this incredible solution.

Now, we highly recommend you get some funding and adopt!

Happy Holidays and good cheer!

Sources:

1. https://www.epa.gov/newsreleases/biden-harris-administration-announces-350-million-14-states-reduce-methane-emissions
2. https://climate.mit.edu/ask-mit/why-do-we-compare-methane-carbon-dioxide-over-100-year-timeframe-are-we-underrating
3. https://bidenwhitehouse.archives.gov/wp-content/uploads/2023/12/Methane-Action-Plan-2023-Topper.pdf