Canadian Manufacturing

US energy companies tossing away $23M in natural gas escapes

Government says capture technology affordable, accessible



BILLINGS, MONTANA: Millions of dollars are being lost in natural releases in the US, according to a new report from the Government Accountability Office (GAO).

Energy companies are discharging about 50 billion cubic feet of natural gas each year, costing the US government $23 million annually in lost revenues.

Much more than royalties are at stake — the lost gas adds up to the annual greenhouse gas emissions of more than three million cars.

“You’d much rather capture gas and use it for productive purposes rather than releasing it into the atmosphere,’” said the GAO’s Frank Rusco. “They could do so either for environmental reasons or because they should be getting (royalties) from this gas.”

Rusco said companies have access to technology to capture escaping gas and that it’s affordable. He blamed the Interior Department for lax regulations and said the agency had greatly underestimated how much gas escapes from storage tanks and leaking equipment.

Interior spokeswoman Kendra Barkoff said the agency was reviewing the GAO report, which was released Nov. 29, 2010.

Most natural gas in the US comes from Louisiana, Texas, Oklahoma, New Mexico and Wyoming. But demand for the fuel is booming, in part because it offers an alternative to coal. Drilling has been expanding in Colorado, Montana, Utah and other western states in recent years.

Kathleen Sgamma, government affairs director for the Western Energy Alliance, said the industry is moving forward on its own to install equipment that captures escaping natural gas.

“Interior could much better spend its time pursuing actual job creation and significant economic development if it removes some of its barriers to onshore oil and gas development,” she said.

Sgamma added the GAO’s estimate of $23 million in lost royalties was “pretty minuscule” compared with $2.7 billion in onshore federal oil and gas revenues in the 2010 fiscal year. Also, because the GAO report was based in part on 2006 data, Sgamma said it failed to reflect the industry’s recent progress to curb emissions.

© The Canadian Press

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