Former Secretary of State George Shultz came to the third annual Vail Global Energy Forum in early March with a message. Global warming is a reality, he said, “so we need to take out an insurance policy.” He challenged individuals to under- take what they can “do and do now.”

That message was a rallying point at the forum, with speakers debating impacts of soaring domestic production; U.S. energy independence; the role of natural gas in world energy markets; China’s role in global climate change; renewables; and the public’s attitudes toward energy.

There was a celebratory mood during a panel about new air rules from the Colorado Air Quality Control Commission. They are a model for other states in reducing air pollution from oil and gas drilling, including methane emissions. Fred Krupp, the 20- year head of the Environmental Defense Fund (EDF), Colorado Governor John Hickenlooper, and oil and gas executives Chuck Davidson, chairman and chief executive of Noble Energy, Brad Holly, vice president of Rockies operations for Anadarko Corp., and Doug Suttles, president and chief executive of Encana Corp., talked about the collaborative process they took part in that led to the rules.

The rules require reductions in “fugitive” methane emissions. Operators have to per- form frequent checks for leaks using infrared cameras and other technologies and quickly repair them.

Methane has become a significant factor in the debate about natural gas’ role in energy supply. The EDF says that while natural gas produces half the carbon dioxide (CO2) of coal when combusted, this benefit can be undermined by methane leaks throughout the gas supply chain.

“Methane is at least 28 times more powerful than CO2 as a greenhouse gas over the longer term and at least 84 times more potent in the near term,” the EDF says. “Like- wise, oil and gas operations are the largest source of man-made volatile organic com- pound (VOC) emissions in Colorado, contributing to smog formation.”

Just a day after the forum concluded, an independent analysis by ICF International reported that the onshore U.S. oil and gas sector could significantly reduce emissions of methane using currently available technologies and at a low annualized cost. “By adopting proven emissions-control technologies, industry could cut methane emissions by 40% below projected 2018 levels at a cost of less than one cent per thousand cubic feet of produced natural gas,” the ICF said. The EDF commissioned the report.

The Colorado governor began laying the groundwork for collaboration a year and a half before the rulemaking. Encana’s Suttles recalled being “encouraged” by the governor’s proactive stance. “It was a real dialogue. The issues need a smart solution … otherwise, there was the risk of driving oil and gas out of Colorado.”

The coalition’s proposed rules were largely unchanged in the final form. They could remove about 90,000 tons of VOCs and 100,000 tons of methane overall from Colorado air annually, according to EDF estimates.

The EDF walked a tightrope between natural gas’ abundance and benefits as a bridge fuel to renewables and the environmental community’s increasingly negative view of its methane emissions. Krupp sought to pre- serve natural gas’ viability by gaining protections for citizens and the atmosphere. “By reducing methane leaks you make it a clear win for the atmosphere—otherwise, you undermine it,” he said.

As for cost, Davidson said there is a different standard for the environment and safety. “What would you pay to have people around operations feel their air is cleaner? You can’t calculate that—there’s no massive spread sheet with a rate of re- turn,” he said.

Encana brought to the table its experience in controlling emissions in Wyoming’s Pinedale-Jonah Field. Suttles admitted there was an “uncomfortable” aspect to “stepping away from the industry” in working on solutions with environmental and other groups. Having deployed technology to control emissions in Wyoming, he knew there was a price tag, but “we can make it work.

“The reality for Encana is that natural gas is a rough business right now,” he said. “We’re discussing reducing our workforce by about 20%.” The efficiency piece for natural gas companies like Encana is “crucial.”

As for challenges post-rulemaking, Holly said Anadarko “is filled with scientists and engineers” who thrive on developing solutions for downhole and surface issues.

The Vail forum is organized by the Stanford University-based Precourt Institute for Energy and by the Vail Valley Foundation.

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