Why We Support Blocking the Waste Emissions Charge

Methane emissions remain one of the most potent drivers of climate change, and the challenge of accurately measuring and mitigating these emissions has grown more complex as regulators and industry actors search for more effective solutions. The Waste Emissions Charge (WEC), a controversial policy tool that was recently disapproved, was introduced in the 2022 Inflation Reduction Act to incentivize companies to monitor and reduce methane leaks by imposing a financial penalty on reported emissions.

At first blush, the WEC seemed like a sensible approach: create an annually rising cost for emissions and thus set a gradually rising cost of inaction. However, the unintended consequence was a shift toward cheaper, less reliable sensor platforms, undermining the goal of meaningful emissions reductions. It follows that canceling the WEC could, counterintuitively, accelerate real material progress in methane emissions abatement by driving the adoption of higher-quality, continuous monitoring solutions.

The Problem with the Waste Emissions Charge

The WEC was designed to compel oil and gas operators to monitor and reduce their methane emissions by attaching a financial cost to reported emissions. There were two ways to calculate a company’s WEC:

1. Use EPA-provided leak rate estimates

2. Use direct measurements for site-specific reporting

Let’s take a look at the incentive here: in an environment where reducing reported emissions (rather than actual emissions) determines financial penalties, any rational economic actor would shift focus from real mitigation to tactical reporting. In short, profit-driven entities were driven towards the least-cost path to regulatory compliance rather than meaningful emissions reduction.

This dynamic created an artificial market for low-cost, unreliable sensor platforms that provide just enough data to avoid penalties under the WEC but offer little actionable insight into actual leak reduction. Limitations of these platforms include:

• Discontinuous operation – Many sensors such as drones and satellites operate on a snapshot basis rather than continuously, meaning leaks could be underestimated or missed altogether in between measurements.

• Limited spatial resolution – Cheaper sensors such as metal oxide semiconductor (MOS) sensors struggle to localize leak sources, making leak quantification difficult - in turn making mitigation efforts more difficult.

• Missing smaller leaks altogether – MOS sensors, by relying on air sampling detection, often fail to detect small leaks as they rely on the wind to transport methane towards the sensors - but wind also mixes and dilutes the methane.

In summary, enforcing the WEC could result in a system where operators could game the Subpart W reporting metrics without genuinely addressing emissions. High-quality sensors with continuous monitoring capabilities were effectively penalized by the WEC since they produced more accurate (and often higher) emissions data, which in turn could increase WEC liability.

How Removing the WEC Could Improve Methane Monitoring

Avoiding the WEC would shift the priority away from tactical emissions reporting and toward comprehensive emissions reduction. Without an artificial incentive to under-report or game the system, operators would have greater motivation to:

1. Shift from Compliance to Performance
   Without the WEC, operators would no longer face a financial penalty for procuring sensors that deliver more accurate data. This promotes true meritocratic capitalism, resulting in the adoption of state-of-the-art technologies that improve detection and mitigation rather than just minimizing reported emissions - helping operators identify, characterize and mitigate costly leaks.
   
   

2. Encourage Continuous Monitoring
   Continuous monitoring technologies like optical path-integrated sensors are capable of reliably detecting even low-level emissions in real time across entire facilities. This attribute is especially important considering the relatively high intermittency of oil & gas methane emissions.
   
   

3. More Accurate Data = Better Mitigation Strategies
   Accurate, high-cadence emissions data allows operators to implement more effective leak detection and repair (LDAR) programs - and reliably evaluate their success. Operators need real-time data to respond to a leak within hours rather than waiting for quarterly or annual inspections, and need accurate data to evaluate the effectiveness of mitigation actions - and, in many cases, to assess the leak propensity of equipment used at one or more facilities.
   
   

4. Better Market Incentives for Monitoring Technology
   With a focus on actual emissions reduction instead of compliance, market forces should reward the methane monitoring technologies with the highest performance at the lowest cost (in the long term). Sensor manufacturers should have strong incentives to develop more sensitive, affordable, and easy-to-deploy systems - which is the only way to drive down costs for accurate continuous monitoring over time, expanding market access and accelerating global adoption.

The Future of Methane Monitoring Without the WEC

Disapproving the WEC creates a more rational market for methane monitoring technologies.

What do we expect to see more of in the coming years?

• Advanced optical and open-path sensors – Platforms like TrelliSense provide precise and continuous data across entire facilities, no matter how large.

• AI-enhanced monitoring platforms – Even basic machine learning algorithms like those used by TrelliSense enhance leak quantification and can help inform predictive maintenance.

• Integrated satellite and ground-based networks – Combining regular satellite imaging with continuous ground-based data such as TrelliSense’s can provide comprehensive emissions mapping at both the macro and micro levels.

A Market-Driven Path to Methane Reduction

Sustained, effective methane reduction ultimately depends on accurate measurement and rapid mitigation. The WEC could have distorted this equation by penalizing accuracy and encouraging under-reporting - and effectively canceling the WEC allows market forces to drive methane monitoring and reduction.

Of course, economics are important here, and worthy of their own blog post. At this point in time, we have plenty of reason to believe that the price of gas will rise in the coming years, especially in the US. Not only do we expect continuing unprecedented electric load growth for the first time in decades, the Trump administration has reinstated LNG export permitting (and is currently on an approval spree), expanding international market access for US gas. These trends, among others, will serve to make leaks more costly over time - and especially in today’s “energy emergency”, keeping methane in the pipe enjoys bipartisan support. The below graph from the IEA (source) demonstrates the relatively small cost of fixing leaks relative to the value lost.

By eliminating the incentive to deploy low-cost, unreliable sensors, regulators and industry leaders can create a system where high-quality, continuous monitoring becomes the norm - rewarding operational excellence and technological innovation, rather than punishing operators.

The methane monitoring market is still developing, but the pathway to progress is clear: by focusing on real emissions reduction rather than compliance metrics, we can create a more effective, market-driven approach to tackling one of the most potent drivers of climate change.

Methane Monitoring Is Just Getting Started

With the recent launch of MethaneSAT and the existing constellation of other satellites capable of detecting anomalous methane emissions from orbit, there may be a temptation to believe that we must now have all the methane monitoring technology needed to combat methane-induced climate change.

While satellites are, indeed, an important part of the arsenal of methane sensing technologies that will be needed, they are by no means sufficient. For instance, while satellites can cover large areas, they do so with relatively low revisit cadence (~ 1 week in the case of MethaneSAT) and during each revisit only take a single snapshot in time. In other words, satellite coverage is extremely temporally discontinuous. 

They also have limited spatial resolution and sensitivity: they typically can only identify very large leaks of >100 kg/hr (~20x the traditional lower limit of the super-emitter leak definition: 5% of sites with the highest emission rates are responsible for 60% of total methane emissions) and can only localize leak sources to the asset level (e.g. Carbon Mapper has a 30 meter x 30 meter resolution; MethaneSAT has a 100m  x 400m resolution). 

These capabilities are impressive and useful to find the biggest persistent leaks. However, they overlook more common leaks in the 5 – 100 kg/hr range that comprise a significant fraction of total leaked methane. Further, their spatial resolution is insufficient for exact source attribution: for example, a ground technician may need to scour an entire square kilometer with a handheld sensor to pinpoint the source of a leak detected by MethaneSAT.

In summary, it is very useful for the whole world to be monitored by satellites - but satellites are only a coarse filter, capable of indicating problems but with little information about leak rate, source, or duration.

Fortunately, other technologies are available to supplement satellite data. Overflights by fixed-wing or other aircraft using hyperspectral imaging or LiDAR can find smaller leaks and with sufficient spatial resolution to pinpoint leak sources. Bridger Photonics is one leading solution offering very useful data for many operators in oil & gas and other markets. Unfortunately, frequent campaigns can get very expensive and most operators are only willing to pay for this service a few times per year. 

Therefore, overflights tend to be even less frequent than satellite visits, so although the data are still very useful and can identify troublesome sources over a wide area, the measurement cadence is insufficient to provide anything other than a snapshot in time.

Ground-based sensors overcome many of the limitations of satellites and airborne technologies by providing continuous measurements at a particular site or in a particular area. They are typically the most sensitive methane detection technologies and can provide information on both the source locations and quantities of the methane leaked. However, most ground-based sensors measure at a single point in space like a “nose”, thus relying on the wind to blow methane towards the sensors and an internal pump to draw samples into the sensors. (And unfortunately these moving parts introduce multiple points of failure.)

Other newer ground-based sensors use optical, open-path geometry and often ingenious variations of tunable diode laser spectroscopy to provide path-integrated measurements over a series of fixed paths. The path-integrated nature of the measurements allows them to sample a much larger area effectively relative to point sensors; in other words, these function as “eyes” instead of “noses”. They tend to be the most sensitive of the technologies, capable of detecting small leaks < 0.5 kg/hr. Some variations can cover large areas (10s of km2) with a single system. However, these systems are generally very expensive, pricing them out of most site-level applications and limiting their use case to high-density O&G production assets.

This is the gap that TrelliSense’s sensors are filling today. Our sensors are:

• Continuous  ||  Averaging over 5- or 10-second frequencies

• Optical  ||  “Eyes” rather than “noses”

• Ground-based  ||  post- or wall-mounted and self-powered

• Long-range  ||  Multiple square kilometers of range

• Low-cost  ||  Roughly 10x cheaper than other continuous optical solutions

One sensor uses the sun as our spectroscopic light source; thus, the sensor’s line of sight is pulled by the sun through the sky above an asset, thus acting like a “methane radar”. The sweeping, dome-like line of sight is unique in the industry and allows identification, location, and quantification of leak sources with less recourse to model-based data analytics.

However, using the sun as a light source limits collection to daytime hours with partial sunlight (which is still more than 300 days per year in most locations). Therefore, we have developed a proprietary artificial broadband light source that mimics the sun’s spectral output (x100) in the near-infrared wavelengths. Our sensor can also use this light source to fix lines of sight and locate and quantify methane leaks on a 24/7 basis in a similar fashion to the open-path technologies mentioned above - but at a fraction of the cost. Our low cost enables applications in more cost-sensitive and isolated facilities such as upstream/abandoned wells, mid/downstream gas, landfills, cattle feedlots, coal mines, industrial facilities, and many more.

Over the long term, we both hope and expect that each of these types of monitoring technologies - satellites, aerial flyovers, OGI cameras, contact-based sensors, and path-integrated optical - gains widespread adoption for applications best suited to their strengths. There is no one silver bullet for all methane monitoring, and therefore they will all have their place. That said, we are on a mission to prove that TrelliSense will be a “prime mover” in the market, and will fill today’s significant gap in cost-effective, continuous and site-wide methane leak detection, localization and quantification.

Check out our home page to learn more about our technology and its applications, and feel free to email us at info@trellisense.com to schedule a conversation.