08 September 2022 |

Mad about methane


Another deal that caught my eye last week was Bridger Photonics$55M raise from a syndicate of three different investors based in the Montana region (like Bridger Photonics). Bridger Photonics makes LiDAR-based tech that helps oil & gas companies analyze methane leaks. 

To catch up quickly:

  • Methane has 30x the global warming potential of CO2 over one hundred years
  • As a result, even though less of it enters the atmosphere, methane contributes to ~25% of observable global warming
  • Burning methane produces less global warming potential than simply letting it leak into the atmosphere. That’s why oil and gas companies ‘flare’ off methane that gets stuck in their wells and pipes rather than just releasing it. 
  • Reducing methane leaks in supply chains is an important priority for oil & gas companies.
  • It’s also worth noting that natural gas is 70-90% methane. As many geographies transition from coal to natural gas, preventing leaks along the gas supply chain is essential to preserve the emissions reduction benefits of said switch.

Bridger Photonics’ tech can spot methane emissions plumes from the area, identifying where leaks exist in machinery, pipelines, or wells for oil & gas companies. They mount laser sensors on small aircraft to get a bird’s eye view, and their ethane leak identification comes with imaging data, GPS coordinates, and quantification. 

What mapping methane leaks looks like (from Bridger Photonics) 

Along with improving flaring efficiency (or diverting gas from flares altogether), fixing leaks is a tangible way for oil & gas companies to at least ameliorate some of their environmental impacts. It’s also a messaging win; i.e., they get to point to emissions reductions, even if the baseline they’re working from is, in some cases, atrocious. 

To illustrate how problematic methane leaks can be, this week, there’s news out of Mexico that a specific oilfield in the Gulf has leaked ungodly amounts of methane in recent months. The volume in question here can hardly be called a leak: in August, the Ku-Maloob-Zaap oilfield emitted 44,000+ tons of methane. Over a hundred-year time span, that methane has the global warming potential of about 1,000,000 tonnes of CO2, equivalent to the annual emissions of 200,000 gas-powered vehicles. The main problem at the oil field is that its operator stopped flaring entirely – they’re simply venting the gas into the sky. 

Elsewhere, to drive home the fact that methane emission quantification is a ‘hot’ investment and innovation area, it’s also worth noting that QLM raised a $12M Series A that also uses LiDAR to quantify emissions. They also inked a partnership with Schlumberger, one of the biggest O&G companies in the world, to trial the tech.

Zooming out

Methane leaks are a challenge that stretches far beyond oil & gas companies. Some of the biggest methane plumes in the world come from natural sources, like wetlands and tropical areas that release methane as the climate warms. Similarly, as permafrost thaws in arctic regions, new ‘thermokarst‘ lakes are becoming significant sources of methane emissions, as they’re a great habitat for methane-producing microbes. 

Agriculture and waste are larger contributors to global methane emissions than the fossil fuel industry is. Landfills are significant sources of methane emissions. Nor are methane emissions from cows a joke, either. 

All that is to say, the addressable market for Bridger Photonics isn’t confined to oil & gas.

Further, beyond methane leak identification, other companies are tackling methane destruction: 

  • Frost Methane identifies and flares methane from “active and abandoned coal mines, Arctic permafrost, and other geologic sources worldwide.” I hope to interview them soon.
  • Crusoe Energy diverts methane from flares and burns it to produce energy. There’s emissions arbitrage in that the global warming potential of avoided methane leaks exceeds that of the CO2 emissions from burning the gas (flaring isn’t perfect). 
  • Vespene Energy captures methane emissions from landfills to burn it 

The net-net

If I were to start a climate tech company tomorrow, I’d look for a way to destroy and / or capture methane from some more ‘esoteric’ source, like landfills or thawing permafrost. Why?

  1. It’d be pretty badass. 
  2. With a growing market for carbon credits and a conversion factor of roughly ~25 to 1 (reducing one tonne of methane = 25 carbon credits), it could be pretty lucrative. 
  3. As I’ve said before, it’s probably the best way to slow near-term global warming and prevent harmful, reinforcing feedback loops from accelerating it.