Nick Snow
Washington Editor
If upstream and midstream businesses ever wondered how comprehensive the US Environmental Protection Agency's proposed greenhouse gas regulations would be, EPA supplied a Beatles-like answer on Nov. 30: The rules will be here, there, and everywhere.
A 58-page announcement in that day's Federal Register did not attempt to limit GHGs from oil and gas operations; that will begin in early 2011. EPA basically set initial GHG monitoring and reporting requirements for the industry in this final rule. (The previous sentence originally used the word "simply" instead of "basically." But an examination of the rule, which takes effect on Dec. 30, showed that it was anything but simple.)
It specified which segments will need to start collecting the information, and which parts of those segments won't. In offshore production, for example, the requirement applies to "any platform structure, affixed temporarily or permanently to offshore submerged lands, that houses equipment to extract hydrocarbons from the ocean or lake floor, and that processes and/or transfers such hydrocarbons to storage, transport vessels, or onshore."
EPA said the rule also covers secondary structures connected to the platform via walkways, associated storage tanks, and floating production, storage, and offloading equipment. It excludes offshore drilling and exploration not occurring on producing platforms.
The agency listed similar reporting specifications and exceptions for facilities involved in onshore production; gas processing, transmission, and storage; LNG importing, exporting, and storage; and gas distribution.
Allows some choices
"Within those segments, there are different types of emissions sources, some of which appear in multiple segments" such as pneumatic devices and blowdown vents, the rule stated. It noted that while the rule, which provides emissions calculation methods for each source, allows some choices, "reporters must keep records in their monitoring plans as outlined."
It also noted that operations covered by the rule could use best available monitoring methods for certain emissions sources instead of the regulation's outlined methods during 2011. "This is intended to give reporters flexibility as they revise procedures and contractual arrangements," it said.
Of the eight affected segments, EPA estimated that onshore producers would pay the most ($26.58 million) in the first year, followed by pipelines, $16.87 million; gas processors, $8.13 million; offshore producers, $3.33 million; LDCs, $3.31 million; and gas storage operators, $2.73 million.
Total estimated reporting costs could fall from $61.78 million in 2011 to $19.01 million in subsequent years, EPA said. The requirements will provide better information on GHG emissions, including reductions from actions operators already take.
More Oil & Gas Journal Current Issue Articles
More Oil & Gas Journal Archives Issue Articles
View Oil and Gas Articles on PennEnergy.com
