TradeEdge Exchange:Methane Mitigation in Texas Could Create Thousands of Jobs in the Oil and Gas Sector

A new report finds that methane regulations proposed by the Environmental Protection Agency  could TradeEdge Exchangespur job growth in Texas as oil and gas operators measure, monitor and mitigate the harmful greenhouse gas.

While Texas officials argue the methane regulations would kill jobs, the report, published today by the Texas Climate Jobs Project and the Ray Marshall Center at the University of Texas, Austin, found that new federal methane regulations could create between 19,000 and 35,000 jobs in the state. 

Oil and gas producing regions, including the Permian Basin, would need a significant workforce to detect methane leaks, replace components known to leak the gas and plug abandoned wells. Previous research shows the methane mitigation industry is already growing.

In the absence of state methane rules, the EPA’s draft methane rule, first issued in November 2021 and strengthened in a supplemental filing last November, along with a new methane fee under the Inflation Reduction Act, will have a major impact on oil and gas operations in the Lone Star state. 

“We want to show that environmental policies are not job killers,” said Christopher Agbo, research and policy coordinator for the Texas Climate Jobs Project, an affiliate of the Texas AFL-CIO. “You can create tens of thousands of good-paying, family-sustaining union jobs while also cutting back on emissions.”

Changing the Methane Narrative 

The EPA’s methane regulations, to be finalized later this year, would reduce methane emissions 87 percent below 2005 levels by 2030. The Inflation Reduction Act’s first-ever methane fee for large emitters will also start in 2024 at $900 per ton of methane and increase to $1,500 per ton by 2026.

Reducing methane emissions is one of the most effective short-term measures to slow the pace of climate change because methane traps about 80 times more heat in the atmosphere over a 20-year period than carbon dioxide.

But Texas has been a stubborn opponent of federal methane regulations. In January 2021, shortly after Biden ordered the EPA to develop new methane rules, Gov. Greg Abbott issued an executive order directing state agencies to use every legal avenue to oppose federal action challenging the “strength, vitality, and independence of the energy industry.”

After the EPA released its draft methane rule in 2021, Texas Railroad Commissioner Wayne Christian issued a statement that “anti -oil and -gas policies will kill jobs, stifle economic growth, and make America more reliant o[n] foreign nations to provide reliable energy.”

The Texas Commission on Environmental Quality and the Railroad Commission submitted joint public comments to the EPA, referring to provisions of the proposed methane rules as “burdensome,” “economically unreasonable” and “onerous.”

The new report, Mitigating Methane in Texas, seeks to change the narrative on methane regulations in Texas, concluding that the methane mitigation sector could grow rapidly as new regulations go into effect. 

Slashing methane emissions in Texas would be a mammoth undertaking. The effort would require the creation of thousands of new jobs, from deploying drones to measure emissions to decommissioning orphaned wells to installing flare systems on storage tanks.

The report authors found that to comply with methane regulations, Texas would need at least 19,000 workers and up to as many as 35,000, which would add between six and nine percent to the number employed in the oil and gas industry in 2022.

“We are the largest emitter of methane in the country,” Agbo said. “So all this funding and regulations toward methane mitigation are going to play a huge role in Texas.”

He and co-author Greg Cumpton, of the Ray Marshall Center for the Study of Human Resources at UT Austin, found that methane mitigation would create long-term maintenance jobs in the oil and gas sector, including leak inspection and detection, leak repair and storage tank maintenance. Short-term replacement and abatement jobs would include replacing methane-emitting components like pneumatic controllers. 

The biggest labor demand would be in the Permian Basin, where the authors estimate addressing methane emissions would require an additional 7,556 jobs. The report authors urge new jobs in methane mitigation be unionized and protected under prevailing wage laws and other high road employment practices. 

“Part of ensuring that the jobs created in areas like the Permian Basin are good-paying jobs would be implementing Department of Labor-registered apprenticeship programs,” Agbo said. “There needs to be collaboration between labor unions, local, state and local governments, and also workforce development boards in the area.”

“A Big Growth Field”

Oil and gas operators around the world are already working to reduce methane emissions. Some turn to Austin-based SeekOps, a company that pairs sensor technology with autonomous drones to measure emissions. While many of the firm’s clients are in Europe—where methane regulations have been in effect for years—SeekOps expects its U.S. clientele to grow.

“It’s a big growth field,” said Paul Khuri, SeekOps vice president of business development. “Next year is going to be a huge year, because the IRA taxes start on Jan. 1.”

SeekOps currently has 30 employees, including data analysts, atmospheric scientists, software and hardware engineers and drone pilots. The company was founded in California but relocated to Austin to be closer to potential customers in the energy industry. 

Khuri said SeekOps clients include oil and gas companies that have voluntarily committed to emissions reductions, regardless of the local regulatory framework. He said he will be watching how the federal government enforces the new methane fees to gauge how much the methane mitigation industry could grow.

“That will be a really good indicator of where the market is going to head and see whether this will be a massive growth area,” Khuri said.

A 2021 Environmental Defense Fund report found that the methane mitigation sector was already growing rapidly. The report identified 215 firms manufacturing technology or providing services to manage methane emissions in the oil and gas industry. The number of manufacturing firms had increased by 33 percent from 2014 to 2021 and the number of service firms had increased by 90 percent between 2017 and 2021.

The EDF report found that more companies mitigating methane had employees located in Texas than any other state. Companies headquartered in Texas include Solar Injection Systems in Odessa, which manufactures solar-powered chemical injection pumps; Cimarron Energy, an emissions control company in Houston, and CI Systems in Carrollton, which commercializes infrared remote sensing technology. 

Arvind Ravikumar, an engineering professor and co-director of the Energy Emissions Modeling and Data Lab at UT Austin, said that oil and gas companies are facing pressure on multiple fronts to reign in methane emissions. More buyers of U.S. natural gas in Europe and Asia are tracking supply chain methane emissions and some utilities are seeking “certified natural gas” with lower associated methane emissions.

“Even if the EPA methane regulations were not in place, the majority of these emissions detection and reduction efforts would go on,” Ravikumar said.

Because methane emissions occur through venting and leaking, not combustion, direct on-site measurements are necessary, Ravikumar said. This bodes well for job creation.

“Methane mitigation or methane emissions detection is not something you can do remotely. You have to be on the ground,” he said. “What that means is you’re going to put a lot more people in some of the most remote, rural corners of the country.”

Ravikumar said many facets of methane measurement and accounting must still be ironed out. But he agreed the economic benefits to oil and gas producing regions of Texas cannot be overlooked.

“Having a policy that’s going to create jobs exclusively in remote parts of the country is really hard to do,” Ravikumar said. “And methane is one place where you can do that successfully.”