EPA issues plan to cut methane emissions from oil and natural gas

The Obama administration said Jan. 14 that it hopes to cut methane emissions from the oil and natural gas sector by 40%-to-45% below 2012 levels by 2025 through a plan using the Environmental Protection Agency (EPA) and other agencies.

EPA is already developing its Clean Power Plan to cut carbon dioxide (CO2) emissions by 30% by 2030. Methane, however, the primary component of natural gas, is a potent greenhouse gas, with 25 times the heat-trapping potential of CO2 over a 100-year period, EPA said.

Methane emissions accounted for nearly 10% of U.S. greenhouse gas emissions in 2012, of which nearly 30% came from the production transmission and distribution of oil and natural gas, EPA said.

Emissions from the oil and gas sector are down 16% since 1990 and current data show significant reductions from certain parts of the sector, notably well completions. But emissions from the oil and gas sector are projected to rise more than 25% by 2025 without additional steps being taken, EPA said.

In 2012, EPA laid a foundation for further action when it issued standards for volatile organic compounds (VOC) from the oil and gas industry. These standards, when fully implemented, are expected to reduce 190,000 to 290,000 tons of VOC and decrease methane emissions in an amount equivalent to 33 million tons of carbon pollution per year.

Building on five technical white papers issued last spring, the peer review and public input received on these documents, and the actions that a number of states are already taking, EPA will initiate a rulemaking effort to set standards for methane and VOC emissions from new and modified oil and gas production sources, and natural gas processing and transmission sources.

EPA will issue a proposed rule in the summer of 2015 and a final rule will follow in 2016.

EPA will develop new guidelines to assist states in reducing ozone-forming pollutants from existing oil and gas systems in areas that do not meet the ozone health standard and in states in the Ozone Transport Region.

EPA will continue to promote transparency for existing sources by strengthening its greenhouse gas reporting program to require reporting in all segments of the industry. In addition to finalizing the updates to the program EPA has already proposed by the end of 2015, EPA will explore potential regulatory opportunities for applying remote sensing technologies and other innovations in measurement and monitoring technology.

In addition, the Interior Department’s Bureau of Land Management (BLM) will update its decades-old standards to reduce wasteful venting, flaring, and leaks of natural gas.

The Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) will propose natural gas pipeline safety standards in 2015. While the standards will focus on safety, they are expected to lower methane emissions as well.

President Obama’s FY 16 budget proposal will also seek $15m in funding for the Department of Energy (DOE) to develop and demonstrate more cost-effective technologies to detect and reduce losses from natural gas transmission and distribution systems. This will include efforts to repair leaks and develop next generation compressors. The President’s budget will also propose $10m to launch a program at DOE to enhance the quantification of emissions from natural gas infrastructure for inclusion in the national Greenhouse Gas Inventory.

EPA will also be working the Federal Energy Regulatory Commission (FERC) and the National Association of Regulatory Utility Commissioners (NARUC) modernize natural gas infrastructure.

Some in industry favored more ‘cooperative’ approach

“We are disappointed the administration is choosing to take a regulatory approach that will take years to implement, rather than a cooperative approach with the industry that we believe will ultimately result in greater emissions reductions in a shorter timeframe,” America’s Natural Gas Alliance (ANGA) President and CEO Marty Durbin said in a statement.

 “The natural gas industry has demonstrated its ability to significantly reduce methane emissions and our commitment to making further reductions through innovation,” Durbin said.

Natural gas production is up 37% since 1990, yet across the entire natural gas sector methane emissions are down 17%.

“We agree with the White House that voluntary efforts to reduce emissions in a comprehensive and transparent manner hold the potential to realize significant, quick and cost effective emissions reductions, and we question why the administration would single out our sector for regulation, given our demonstrated reductions,” Durbin said. “Given that methane is also the product we sell and, therefore, want to capture, this was an opportunity to work with willing partners toward a shared goal.”

The American Gas Association (AGA) said that natural gas utilities are committed to systematically upgrading infrastructure driven by risk-based integrity management programs, and there is a growing effort to accelerate the replacement of pipelines no longer fit for service.

Nearly 90% of the emissions declines from distribution systems since 1990 are due to pipeline replacements, AGA said.

“Given the high-level nature of the administration’s methane blueprint, INGAA reserves judgment on the plan until it sees more details,” said Interstate Natural Gas Association of America (INGAA) President and CEO Don Santa.

“Still, many of the actions INGAA already has initiated seem consistent with the direction of the administration’s proposal,” Santa said.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.