With the new U.S administration reversing many of Joe Biden’s climate change measures, including a pause on the Inflation Reduction Act and removal of the USA from the Paris Climate Agreement, one could be forgiven for thinking the future of the cleantech sector is at risk. But is it? With oil, gas and chemical production set to increase after Donald Trump announced a national energy emergency, technologies that can detect, measure and monitor harmful emissions are likely to be in even greater demand.
By Peter Maas, CEO, Grandperspective GmbH
This is because, in theory at least, the more oil, gas and petrochemicals that are produced, the greater the number of Leak, Detection and Repair (LDAR) campaigns that will be needed to protect staff, contractors, suppliers, and most importantly, the communities located closest to drilling sites, plants and refineries. Will a reversal of climate regulation in the USA put these neighbourhoods and the environment at greater risk? From my perspective as CEO of a company providing emission monitoring services to several of the world’s largest international oil companies, I believe we should not rush to judgement.
Integrated oil and gas companies use our technology to detect, monitor and measure small-scale leaks, which fall outside the limits of conventional technologies, such as Optical Gas Imaging (OGI) cameras, fixed point sensors and satellite technology. They do so primarily to keep their staff, contractors and communities living beyond the fence line safe, but our technology is also used as a tool for environmental monitoring and for asset integrity. Tools such as our scanfeld® system, which uses hyperspectral imaging based on Fourier-Transform infrared (FTIR) remote sensing technology, are in demand because they accurately pinpoint leaks giving safety teams the ability to track them in real-time.
This enables safety teams to continuously quantify several hundred different gases at detection rates of 0.05 kg/hr across a radius of one square kilometre. The technology’s precise and immediate monitoring capability means that leaks can be quickly contained without the entire plant being shut down. Systems that aid environmental monitoring – particularly regarding methane detection and quantification – are also in great demand.
Even if the EPA’s strict methane reduction rules are diluted or revoked by the new administration – as some are forecasting – international oil companies (IOCs), whose actions are heavily scrutinised by boards, shareholders and investors, are unlikely to waver on their methane reduction responsibilities. Furthermore, IOCs do not just work in the United States. Regardless of U.S. climate legislation rollbacks, the UK, the EU, Scandinavia and the Asia-Pacific regions, are unlikely to follow America’s lead and water down emission regulation.
But to focus too heavily on legislation is perhaps to miss the point. In industry, innovation often moves faster than regulation. This means that the government authorities that enforce climate laws are often unable to put the correct solutions in place even if they wanted to. Take the EU methane regulation (EU/2024/1787), which was enacted in August last year, for instance. It compels companies to measure and quantify both their source and site-level emissions, but it does not specify which technologies should be used for MRV and LDAR. There is a realization within the industry that this is not possible with legacy sensors, however, while satellite only has the ability to accurately detect methane leak rates at 50 kilograms per hour.
But it is not just a case of innovation outpacing regulation. Invention also has a transformative effect – unlocking the door to exciting new possibilities. It often requires an IOC with a pioneering mindset and a willingness to field test and pilot technology over a long period of time, to reveal those use cases. For instance, in addition to using our system to detect small-scale leaks, one of our clients is also utilizing the technology to improve asset integrity throughout its operations. Previously, the client was spending thousands of hours each year sending teams to manually check every section of pipeline. However, with our sensors delivering asset-level detail to the control room, process safety teams can now not only identify the chemical, but also the volume of the cloud, the leak-rate and even where the cloud is heading. This unprecedented real-time visibility gives them the best opportunity to tackle the leak quickly, efficiently and effectively.
While the close collaboration between IOCs and start-ups often widens the gulf between innovation and regulation, there are nations where both work in harmony. Curiously, in the last four years no country has done more to foster innovation through regulation in the energy sector than the USA. The Inflation Reduction Act (IRA), which was introduced by the last administration to increase domestic clean energy production, has sparked over USD$133 billion of investment in projects, according to the Massachusetts Institute of Technology (MiT).
Solar power, wind power and energy storage projects may have drawn the lion’s share of funding, but the IRA, which was also put in place to combat climate change, has accelerated innovation in the sensor detection technology industry too. This is because the tax incentives that oil and gas companies receive from the IRA to reduce methane leaks has seen them invest in companies that can significantly enhance their MRV and LDAR capability. With the Republican administration issuing an Executive Order to revoke the IRA, at the time of writing, it is not clear how much of the act would be affected. But with all new funding halted, in theory at least, energy companies, especially those with a much smaller footprint, could lose out.
However, it is the Republicans themselves who could yet save it from being fully disbanded. According to the Brookings Institute, the state of Texas, a Republican stronghold and America’s largest oil and gas producing state, “received the most dollars” from the IRA. Nevada and Wyoming, which are also Republican states, also benefitted from the IRA, receiving the most federal investment per head of population. It is not a foregone conclusion that the IRA will be fully cancelled. Indeed, as the Brookings Institute noted in early January, it might be the case that “certain IRA incentives that benefit (Republican) constituents are retained”.
Whatever the outcome, and whatever direction of travel the US government decides to take, game-changing technology which provides world-class detection and monitoring will always be in demand – whether it be deployed in America’s oil and gas heartlands, or in fields and plants across the globe.
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ABOUT THE AUTHOR
Peter Maas, who is Chief Executive Officer, co-founded Grandperspective GmbH in November 2018. Grandpersptive GmbH, which is based in Berlin, provides state-of-the-art remote monitoring solutions for gas detection. Before co-founding Grandperspective GmbH, Peter worked for Bruker Optic for nearly six years, where he worked as an Application Manager specialising in remote sensing and gas analysis. Peter studied at the prestigious Hamburg University of Technology for seven years, where he completed a Masters degree in mechatronics, robotics and automation technology.