Advances in satellite-based monitoring of methane emissions will mean far more scrutiny of the oil and gas industry by policymakers and investors, according to a new study out of Columbia University's Center on Global Energy Policy.

Methane, the main component of natural gas, is a potent greenhouse gas and the second-biggest contributor to climate change behind carbon dioxide. But the difficulty of accurately detecting the oil and gas sector's methane emissions has been a critical challenge for the industry and regulators.

A series of satellite projects expected to deploy in the coming years stands to change that by radically improving the quality of methane emissions data and expanding its availability, the Columbia researchers found in the study, published Oct. 14.

"The emergence of new generations of space-based methane emissions detection and quantification systems can and should drive change in the treatment of methane in the oil and gas industry, the financial community, and the public policy arena," the researchers said. "Companies that fail to act now and reduce emissions will suffer the consequences at the hands of investors, governmental decision-makers, and the general public. There will be nowhere to hide methane emissions."

Satellite projects include the Environmental Defense Fund's MethaneSAT, scheduled to launch in 2022 and focus on detecting methane emissions worldwide. A few other satellites are planned to launch the same year, some homing in on emissions at the national or basinwide level.

Some existing satellites already monitor greenhouse gases. A pair of satellites belonging to Canadian company GHGSat Inc. and the European Space Agency discovered a major pipeline leak in Turkmenistan in 2019. A December 2019 study relied on data from the European Space Agency's satellite, known as TROPOMI, to show that a February 2018 explosion at an XTO Energy Inc..-owed well spewed significantly more methane than the company initially estimated.

The new satellite systems are expected to increase the accuracy, scope and timeliness of emissions detection.

Data from the new projects should become available by 2023, making it wise for oil and gas companies to start addressing methane emissions now, according to Erin Blanton, a senior research scholar focused on natural gas at the Columbia University center and one of the authors of the study.

Better data should help satisfy the demands of investors increasingly focused on environmental, social and governance risks in the oil and gas sector, where there is a lack of standardized and impartial environmental data that can be used to inform investment decisions, Blanton said.

"Rather than saying that there isn't investibility in the energy sector at all, the investment community seems to say, 'We want to be able to pick — we want to be able to say what are the companies that are addressing emissions, that are forward-thinking and that are preparing themselves for a lower-carbon future and an energy transition,'" Blanton said. "And this will make it easier to verify what companies are saying they are doing that and what companies are actually saying and doing that."

Companies typically self-report methane emissions, and many participate in voluntary emissions-reductions programs. Detection efforts often rely on aerial measurements and ground-based monitors, providing more localized results, the study said.

This results in official inventories of emissions that often rely on engineering estimates instead of precise estimates. But multiple studies have shown the official figures routinely under-report emissions levels.

The International Energy Agency flagged methane emissions in its recently released World Energy Outlook 2020 as a "crucial uncertainty" for the natural gas industry but said it expected better data, including from satellites, to soon improve the situation.

"Greater transparency on methane emissions seems to be on the way, with implications for the environmental credentials of different sources of gas," the Paris-based agency said.

The European Union on Oct. 14 released a methane strategy that included the possibility of binding minimum standards for fossil gas used in the bloc.

Moody's has warned that concern about methane emissions at energy companies has contributed to a growing anti-gas sentiment that is raising credit risks for gas infrastructure. But the firm also expected continued investment in the gas sector and pointed to incentives that reduce methane emissions, such as pipeline replacement projects by gas utilities.

Many companies and industry groups have responded to the increasing pressure to curb methane emissions with a series of commitments and mitigation efforts. Among them is Project Astra, where the University of Texas at Austin is working with Exxon Mobil Corp.., Pioneer Natural Resources Co. and environmental groups to test methane emissions sensors to more effectively limit leaks.

"There isn't a huge amount of time to start really addressing what are relatively addressable leaks and sources of methane emissions," Blanton said. "In a way, the production declines we've seen this year almost offer an opportunity to say: If U.S. production is going to pick up again, how can it be done in a way where they are starting to really address flaring and venting and these cited problems that are leading to significant methane emissions."