Satellite imagery- how the eye in the sky can track methane leaks

A growing problem

What was a little-known accident at a fracking site in Ohio in 2018 turned out to be one of the largest methane leaks on US records, releasing more of the gas than the oil and gas industries of many countries do in a year. What made the discovery so important was the way in which it was found. The European Space Agency had just released a satellite on the Sentinel-5P mission which pinpointed the scale and showed how widespread the problem could be.

Ever since oil has been drilled (since the 1860s), there have been methane leaks but detection as to how much was being leaked has been unclear and frustrating. Measuring has been done using sensors on the ground but this has proven expensive, time-consuming and complicated, even with the use of airplanes.

Last year it emerged that methane was at its highest level on record, driven by animal farming and fossil fuels. This rise has been particularly sharp since 2007. The spike in levels is particularly concerning as the gas is better at trapping the sun’s heat. The biggest increases were in Asia, Africa and Oceania, which have been attributed to agriculture, while rises in the US are down to fracking and oil and gas drilling. Emissions are particularly high in coal mining and it is expected that they will grow in the coming years.

Governments are increasingly concerned about the effects of methane, amid concerns about meeting the goals of the 2015 Paris agreement to curb emissions, although regulations vary in severity around the world. 

The impact of new technology in the area is substantial. Expensive field studies can now be replaced with data from satellites. Amongst the recent concerning discoveries have been large releases from a pipeline in Turkmenistan, a natural gas field in Canada and coal mines in the US. There are some limits to what can be found as satellites cannot see below clouds and more work must be done on the data that takes into account existing levels of methane.

“The discovery and quantification of gas leaks from space is a game-changer in the interaction of atmospheric sciences and climate change mitigation,” Thomas Roeckmann, professor of atmospheric physics and chemistry at Utrecht University in the Netherlands, told the New York Times.

The companies embracing advancement

In 2002, satellites started to look at the emissions but the results did not have the resolution to pinpoint the necessary information. With development in technology has come vastly improved data and a number of companies and agencies which are working to return valuable information from space. 

• The Canadian company GHGSat has used satellites to find the smallest methane leak from space and sells information to companies trying to find leaks on the systems. It has produced a map which shows the varying concentrations of methane across areas and time. By releasing the details, the company says that it wants to start a conversation about the problem and prompt questions.
• New York City-based Bluefield Technologies is planning to launch of a group of satellites in 2023 using optical sensors in units about the size of a backpack.
• The European Space Agency’s Sentinel-5P mission observes sunlight which is sent back to space from the earth’s atmosphere and can see the unique fingerprints of gases. It can also detect nitrogen dioxide, ozone, formaldehyde, sulphur dioxide and carbon monoxide and has the potential to detect air pollution over individual cities. Kayrros, a data analytics uses this data to assess company methane emissions.
• The Environmental Defense Fund (EDF) is set to launch the ‘MethaneSAT’ satellite with the aim of scanning the globe for methane leaks and to make the information public. The satellite is said to be able to track emissions with unprecedented accuracy.

With new technology, new opportunities

The latest innovations in satellite technology could not have come at a better time for investors. Now more than ever before, they are turning their attention to sustainable investments which can improve the environment, achieve the goal of net zero and ultimately generate sustainable returns.

The companies that fail to reduce their emissions and allow methane to continue to leak into the environment will bear future repercussions from investors and likely see them themselves left behind.

At Lombard Odier, we believe that companies that are transitioning in order to meet the goals of the 2015 Paris Agreement will be the winners of the future. These firms are adapting their business models now in order to ensure returns in the future. These kinds of companies that are tracking methane emissions are also in pursuit of this goal. And this will help us all live in an environment with less loose methane and a cleaner atmosphere.

This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.

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