Oil and gas giants are selling off their most-polluting operations to small private companies. Most manage to escape public scrutiny.
By Hiroko Tabuchi, New York Times
As the world’s oil and gas giants face increasing pressure to reduce their fossil fuel emissions, small, privately held drilling companies are becoming the country’s biggest emitters of greenhouse gases, often by buying up the industry’s high-polluting assets.
According to a new analysis of the latest emissions data disclosed to the Environmental Protection Agency, five of the industry’s top ten emitters of methane, a particularly potent planet-warming gas, are little-known oil and gas producers, some backed by obscure investment firms, whose environmental footprints are wildly large relative to their production.
In some cases, the companies are buying up high-polluting assets directly from the largest oil and gas corporations, like ConocoPhillips and BP; in other cases, private equity firms acquire risky oil and gas properties, develop them, and sell them quickly for maximum profits.
The largest emitter, Hilcorp Energy, reported almost 50 percent more methane emissions from its operations than the nation’s largest fossil fuel producer, Exxon Mobil, despite pumping far less oil and gas. Four other relatively unknown companies — Terra Energy Partners, Flywheel Energy, Blackbeard Operating and Scout Energy — each reported emitting more of the gas than many industry heavyweights.
These companies have largely escaped public scrutiny, even as they have become major polluters.
“It’s amazing how the small operators manage to constitute a very large part of the problem,” said Andrew Logan, senior director of oil and gas at Ceres, a nonprofit investor network that commissioned the study together with the Clean Air Task Force, an environmental group. “There’s just no pressure on them to do things better. And being a clean operator, unfortunately, isn’t a priority in this business model.”
Nick Piatek, a spokesman for Hilcorp, said the company “spends substantial capital retrofitting and refurbishing aging equipment” at its newly-acquired sites and that its investments would eventually bring down emissions while extending the life of those assets. “We inherit those emissions,” he said.
A BP pipeline and workers in the Prudhoe Bay oil field in 2006. Last year, Hilcorp Energy bought BP’s oil and gas business in Alaska.Credit…Al Grillo/Associated Press
The analysis, carried out by the energy consultancy M.J. Bradley & Associates using data that companies are required to submit to the E.P.A. Greenhouse Gas Reporting Program, highlights the climate consequences of methane.
The main component of natural gas, methane can warm the planet more than 80 times as much as the same amount of carbon dioxide over a 20-year period if it escapes into the atmosphere before being burned. A recent United Nations report singled out the oil and gas industry as holding the greatest potential to cut its emissions from methane, and the Biden administration is in the process of reinstating methane regulations relaxed by President Donald J. Trump.
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