Recent Methane Success In California Offers Blueprint for Mexico’s Energy Boom

on April 11, 2017 at 11:01 AM


Following energy reform in 2013, oil and gas industry expansion in Mexico is moving full steam ahead. The first round of bidding for Mexico-owned deep-water oil leases wrapped last December, ushering in a slew of private companies like ExxonMobil and Chevron for the first time since the 1930s. Additional leases for land that will become hotbeds for oil and gas activity on and offshore are planned later this year.

All of this is happening while Mexico is demonstrating remarkable climate leadership, and while countries and energy companies around the world are beginning to act on controlling methane, a harmful pollutant that routinely escapes from the global oil and gas industry. In other words, the Mexico energy boom couldn’t come at more critical time. Mexico ranks as the world’s fifth largest oil and gas methane emitter. Absent strong rules for future development, these emissions could steadily rise as more oil and gas production comes on line as a result of the energy reform.

Conversely, getting the rules right in Mexico before the energy boom happens makes sense – it’s a lot smarter to require a clean industry from the start rather than trying to clean it up years after it arrives. Mexico taking the steps now to implement strong regulations that support responsible energy development would help ensure important protections for its citizens and growing economy.

The good news is that policies to reduce methane are incredibly cost-effective, and many jurisdictions have already begun to develop and implement regulations to address this powerful pollutant. Recent progress in California is an example of best-in-class oil and gas methane regulations and are an important reference as Mexico seeks to develop similar regulations of its own.

Prevention Underpins California’s Methane Rules

Last week, California finalized the strongest oil and gas regulations to rein in methane pollution anywhere in the U.S., joining other red and blue states that are continuing to act (see here, here and here). California’s new rules require oil and gas companies to curb emissions at both new and old facilities operated on and offshore, and will save millions worth of lost gas every year. This is the first major environmental regulation issued since the new U.S. Administration took office, and it sends a clear message that states are charting their own future as leaders in Washington dismantle vital energy and environmental policies that protect all Americans.

Central to California’s methane journey was Aliso Canyon, a mega gas-leak in Southern California that captured worldwide attention. Caused by a well blowout deep underground at a natural gas storage facility, the disaster became the poster child for how bad the oil and gas industry’s methane problem can get when requirements for routine leak inspections, equipment maintenance and operation is lacking.  Case in point: documents demonstrate the facility wasn’t required to inspect for well-casing thickness or for gas leaks at the surface even though it had experienced an increasing number of infrastructure integrity problems in recent years and was operated without secondary containment systems.

Aliso Canyon – and California’s lesson learned from it– stands as an example for Mexico. It is squarely in Mexico’s interest to ensure that all oil and gas companies operating within its borders meet the same environmental safety standards required elsewhere. Without consistent policies, companies can exploit differences in national and subnational safeguards and ultimately hurt Mexico’s economy and citizens.

Methane: An Urgent Climate Pollutant

To appreciate the significance of Mexico’s situation, you have to consider what’s happening around the world regarding climate science and policy. In March, the World Meteorological Organisation released its State of the Climate Report, and the news was alarming. Global temperature broke records again in 2016, while sea-level rise accelerates. WIRED Magazine concluded, “we have surpassed our understanding of our changing climate and have stepped into truly ‘uncharted territory’”.

There is also growing understanding of the powerful role methane plays in global warming. Methane is a potent greenhouse gas over 80 times more damaging than carbon dioxide over the first 20 years it sits in the atmosphere. Scientists say methane accounts for about 25 percent of current warming and that emission levels are spiking worldwide. Globally, the oil and gas industry is among the largest emitters of methane through accidental or intentional releases.

A climate scientist at Simon Frazer University put it simply: “We need to mitigate both [methane and carbon dioxide] as soon as possible. There are no trade-offs.”

This urgency has a silver lining. Because methane is so potent, reducing it will have quick and powerful climate impact. For example, cutting global oil and gas methane emissions 45 percent by 2025 would have the same short-term climate benefit as closing one-third of the world’s coal plants. In addition, analyses have shown that reducing methane emissions from the oil and gas sector can be achieved affordably with existing technology.

Mexico’s Energy Boom is Methane’s Next Big Venue

Mexico has been a reliable and visible climate leader – even before its methane pledge last year. And it has a long history of working with leaders in California on a variety of environmental and climate related initiatives.

Now, with new and strong methane model from California, Mexico has a great chance to leverage its pending energy boom to help, rather than hinder, its efforts to meet its international methane pledge. By establishing fair and sensible rules for its growing energy industry, it can not only bolster the boom’s economic impact, but further demonstrate the international climate bone fides it earned in recent years.

By Drew Nelson 

Originally Published on April 5, 2017

The Energy Exchange Blog is a forum where EDF‘s energy experts discuss how to accelerate the transition to a clean, low-carbon energy economy. Follow them on Twitter here: @EDFEnergyEX