Methane’s Sputnik moment? The 7 Hottest meth techs to watch, as US methane regulation steps up

August 19, 2015 | Jim Lane

Are these 7 companies the big winners from the EPA’s proposed rules for oil & gas well methane emissions?

In Washington, the Environmental Protection Agency proposed a set of new regulations for the oil & gas industry that the Obama Administration said would cut ultimately methane emissions by 40-45 percent from current levels. The proposal impacts new operations and does not affect existing wells.

It looks just a little like Sputnik, the pioneering Soviet satellite, if you squint just a little — methane, that is. A big carbon atom with four little hydrogen atoms trailing behind. Like the launch of Sputnik, the Obama Administration’s move on methane could spark a wave of useful technologies.

A little on methane

methane-molecule In the US and elsewhere, methane is sometimes captured, sometimes flared, often vented into the atmosphere. Large fields produce methane for the commercial natural gas business. But lots of smaller wells simply leak or otherwise vent methane.

The Obama Administration is primarily interested in attacking climate change. So, it may seem counter-intuitive that they are putting a collar around CO2 emissions at power plants under the Clean Power Plan, while encouraging oil & gas producers (in this new regulatory thrust) to convert methane to CO2 via flaring, and venting the CO2.

According to the EPA’s communiqué this week, methane is 25X as potent in its greenhouse effect than CO2 over a 100-year period. (The Intergovernmental Panel on Climate Change disagrees, citing 34X as the correct factor over 100 years, and 86X over 20 years).

Either way, the Obama Administration is “stepping the emissions down” by targeting the flaring of methane into the less-potent CO2.

(Note: methane is unstable in the atmosphere, lasting roughly 12.4 years, but the knock-on effects as it degrades to CO2 cause the huge greenhouse gas effect.)

But the new rules also will allow for capture of the methane, prior to flaring — and if industry can make the economic, social or environmental case to use these molecules for green chemistry and fuels, rather than converting to CO2 and venting — why, there’s an opportunity there.

Is this a biofuel or a renewable chemical?

No. Even if biotechnology is used, if a fossil hydrocarbon is used, it’s not renewable, end of story. But that doesn’t mean, as the Obama Administration has observed, that “cleaner than venting” is not an appropriate strategy. Cleaner is better, and reducing emissions and building new industries is a multi-year, multi-technology effort. Better to use methane than vent it, or flare it.

How much methane, and how?

In essence, what the EPA is proposing is that new oil & gas operations in the US use a process known as a “green completion” or REC (Reduced Emissions Completion), combined with onsite gas combustion device (“flaring”).

In REC, the EPA says that “Portable equipment is brought on site to separate the gas from the solids and liquids produced during the high-rate flowback, and produce gas that can be delivered into the sales pipeline.”

With this proposal, the US is proposing to divert ultimately up to 65 million tons (of CO2 equivalent emissions) from fossil methane, as new wells replace old ones. Given that methane is 25X as potent a greenhouse gas than CO2, that’s around 2.5 million tons of actual methane. In the process, the agency predicts that In the process, the agency conceded that “an increase in flaring of methane in response to this rule will produce a variety of emissions, including 610,000 tons of CO2 in 2020 and 750,000 tons of CO2 in 2025.”

We’re forced to guess how much extra methane will be available, sequestered instead of flared — our best projection is roughly 2.2 million metric tons, once we’ve allowed for the carbon that is flared off as CO2.

So, where’s the opportunity?

As Calysta’s Josh Silverman writes:

Methane’s gaseous nature and volatility make transportation and direct usage as a vehicle fuel problematic. For this reason, there is a strong incentive to convert the gas to a liquid form to allow for easy transport to the point of use….The Fischer Tropsch process is currently the most prevalent approach…[and] yields petroleum products consistent with today’s fuel supply, but suffers from a number of drawbacks, including low yields, poor selectivity (making downstream utilization complex), and requires significant capital expenditure and scale to achieve economical production.

So, who’s in the field and who’s making what?

#1 Newlight Technologies

Newlight, founded in 2003, is harnessing methane-based carbon emissions as a resource to replace oil and reduce the cost of plastics production–fundamentally changing both the economics and environmental impact of the plastics industry.

The AirCarbon production process begins with concentrated methane-based carbon emissions that would otherwise become a part of the air, rather than fossil fuels that would otherwise remain underground, including air-bound methane emissions generated from farms, water treatment plants, landfills, and energy facilities.

Due to the high heat-trapping potential and superior thermodynamics of methane compared to carbon dioxide, the company’s primary focus is on sequestering methane-based greenhouse gases, which have over 20 times the heat-trapping impact of carbon dioxide (20 carbon dioxide capture plants would be needed to match the impact of 1 methane capture plant). Newlight is now using the company’s patented, award-winning greenhouse gas-to-plastic bioconversion technology to produce plastics from air and methane-containing greenhouse gas emissions generated at a farm.

Here’s our 5-Minute Guide to the company and it’s technology.

#2 Siluria

Siluria’s oxidative coupling of methane (OCM) technology, catalytically converts methane (and can co-feed ethane) into ethylene and water. Ethylene is the world’s largest petrochemical building block used in the production of a wide range of plastics, coatings, adhesives, engine coolants, detergents and other everyday products. The ethylene from the OCM reaction can be purified using conventional separations technologies, resulting in petrochemical grade ethylene ready for use in downstream chemical production or transport in an ethylene pipeline.

The OCM ethylene can be converted using a different catalyst into liquid hydrocarbon fuels or blend stocks, in a process referred to as Ethylene to Liquids. The composition of the liquids products can be tailored to a preferred composition and specification. Examples of ETL products include gasoline, condensates, aromatics, heavy oil diluents and distillates (diesel and jet fuel).

Here’s our 5-Minute Guide to the company and it’s technology.

#3 Calysta

Calysta is using biotechnology to create innovative products from sustainable sources. Calysta Nutrition develops and produces FeedKind protein feed for commercial aquaculture and livestock feed. Calysta Energy is developing high value materials for use in industrial and consumer products with cost and performance advantages over current processes. Calysta proprietary technology uses methane as an energy source – one of the world’s most abundant, economical forms of carbon.

Here’s our 5-Minute Guide to the company and it’s technology.

#4 Oberon Fuels

Oberon Fuels is launching DME (dimethyl ether) in North America as a clean-burning, alternative to diesel. Using various, domestic feedstocks such as food and green waste and natural gas, Oberon has developed a modular, small-scale process that cost-effectively converts a variety of methane

Oberon has developed proprietary skid-mounted, small-scale production units that convert methane and carbon dioxide to DME from various feedstocks, such as biogas and natural gas. Oberon units have the capacity to produce 3,000–10,000 gallons of DME per day to service regional fuel markets and are therefore ideal for the owner of a fleet of heavy-duty vehicles making closed-loop hauls.

The Oberon units cost-effectively convert inexpensive natural gas, which is abundant in North America, to DME, a higher-valued transportation fuel. The units’ modular design makes it easy to deploy to remote stranded-gas locations that are otherwise costly to access, and also to industrial operations where waste CO2 streams can be captured to increase output.

Here’s our 5-Minute Guide to the company and it’s technology.

#5 Kiverdi

Kiverdi makes high-value oils and chemicals for a variety of product applications such as detergents, biomaterials and fuel additives. Kiverdi’s chemicals are sustainably produced from waste carbon and decoupled from the price fluctuations, supply chain disruptions, and geopolitics associated with commodities.

Kiverdi is in the class of gas fermentation companies – like, say, Coskata, INEOS Bio or LanzaTech, and a modular bolt-on to syngas production processes, such as commercially available gasification or steam reforming technologies. Their differentiating point? The ability to produce a wide range of commercially useful mid- and long-chain carbon molecules using proprietary microbes, co-designed bioreactors, and integrated operations.

The result? In prospect, a high margin, low Capex waste-conversion technology that can use agricultural carbon-based wastes, natural gas (particularly stranded natural gas), biogas, LPG, or petcoke, to manufacture petrochemical replacements and drop-in fuels.

Here’s our 5-Minute Guide to the company and it’s technology.

#6 Mango Materials

Mango Materials utilizes a patent-protected process to manufacture bioplastic from inexpensive sources of methane gas. The San Francisco Bay Area-based company has proven the ability to produce the bioplastic poly-hydroxyalkanoate (PHA), which can be economically and functionally competitive with oil-based plastics.

CEO Molly Morse notes, “For the next 12-months Mango Materials is focused on producing larger volumes of commercial samples. Since our materials will biodegrade in marine environments, we are currently very excited about the potential to produce biodegradable plastics for use as microparticles. “

Here’s our 4-Minutes With Mango Materials CEO Molly Morse.

#7 Industrial Microbes

Industrial Microbes is inventing new ways of turning natural gas and waste carbon into hundreds of products for some of the largest markets on earth. The first target is malic acid, a food additive that supplies the tart taste of apples.

“Sugar is often the raw material, but it’s not a good raw material,” CEO Derek Greenfield told TechCrunch. “Natural gases are 75 percent cheaper than sugar. They’re cheaper than oil and there’s tons of it. It’s our big natural advantage that we have natural gas in the U.S. It’s super energy dense and there’s already infrastructure to pipe it around.”

You can view I-Microbes CSO Noah Helman, via the Digest’s one-to-one interview program Faces, here.

Late-breaking news

After press time for this story, Intrexon and Dominion announced a major partnership to explore converting natgas to isobutanol, with a focus on projects in the Eastern US, including the Marcellus and Utica shale basins. All about that here.