New Analysis Quantifies Natural Gas Waste and Pollution in Louisiana

(BATON ROUGE, La.) A new Synapse Energy Economics analysis commissioned by Environmental Defense Fund and Taxpayers for Common Sense finds oil and gas companies across Louisiana wasted over $82 million worth of gas in 2019. That’s enough lost gas to meet more than 2/3 of residential natural gas demand in the state for a year.

This waste occurs when gas is either flared, vented or leaked from oil and gas infrastructure, and the analysis comes as the state’s Department of Natural Resources (LDNR) embarks on a proposed rulemaking to address waste from routine venting and flaring. Separately, the Environmental Protection Agency is expected to finalize its proposed rule to reduce methane emissions from oil and gas facilities nationwide later this year.

"Oil and gas producers in Louisiana needlessly waste tens of millions of dollars’ worth of natural gas every year,” said Elizabeth Lieberknecht, EDF Regulatory & Legislative Manager, Midcontinent. “Efforts by the state’s Department of Natural Resources to stop waste from venting and flaring will create jobs and increase revenue for state priorities like education, while curbing pollution and strengthening climate security.”

Methane is a potent greenhouse gas with 84 times the warming power of carbon dioxide over a 20-year timeframe and is often accompanied by other local air pollutants. Because methane is the main component of natural gas, it also represents a waste of an energy resource when it is released from the supply chain.

According to the analysis, the 27 billion cubic feet of oil and gas methane wasted from Louisiana’s 31,000 active onshore wells translated into nearly $2.5 million in lost tax and royalty revenue to the state of Louisiana in 2019 alone. That’s lost funding that would otherwise support priorities like the Teachers’ Retirement System of Louisiana and the Budget Stabilization Fund.

“We are losing a valuable energy resource day after day, month after month, year after year. This is true in Louisiana and across the country. Outdated policies keep billions of dollars’ worth of natural gas from getting to market at a time when budgets are tight and energy security is important as ever,” said Autumn Hanna, Vice President at Taxpayers for Common Sense.

This analysis also highlights that flaring is a leading cause of waste, responsible for roughly a fifth of all methane wasted in Louisiana. That directly translates into nearly $16 million worth of lost gas – enough to meet the needs of almost every household in New Orleans for a year – and underscores the importance of the standards proposed by the LDNR to keep this resource out of the atmosphere and in the pipeline.

Several states such as Colorado and New Mexico have already implemented strong rules to stop pollution and waste from routine flaring, creating an important foundation for the LDNR to lead in developing standards that serve the needs of Louisianans.

"Methane venting and flaring is bad for the environment, bad for the state economy, and bad for the state budget," said Jan Moller, Executive Director for Louisiana Budget Project. "When the industry is allowed to waste natural gas, it robs the state of important tax revenue, which then has to be made up through other taxes or else leave the state without the revenue it needs to fund critical programs. Cutting methane waste will also support Gov. John Bel Edwards' Climate Initiative to reach Net-Zero by 2050."

Reducing methane waste and pollution also creates jobs in the fast-growing methane mitigation industry. According to Datu Research, the sector already has 32 employee locations across Louisiana, manufacturing products and providing services to help operators address emissions. The methane mitigation industry provides family-sustaining jobs that typically pay 10% more than the federal average and can’t be offshored. Over 75% of methane mitigation companies say they would create more jobs with strengthened methane emission standards in place.

Additionally, reducing the needless waste of gas resources lost through methane waste is an important solution for addressing the joint energy and climate security challenges of the U.S. and its allies as we transition away from fossil fuels to a clean energy future. A recent EDF analysis revealed that reducing waste of natural gas from leaks and flaring in the U.S. could provide over half of the yearly supply of natural gas the country has pledged to European allies.