White House orders steps to curb oil and gas methane emissions

The Obama administration set a new goal to cut methane emissions from the oil and gas sector from 2012 levels by 40–45% by 2025, and a set of actions to put the US on a path to achieve this goal. Trade associations across the industry reiterated earlier statements that regulations would try to solve problems which already are being addressed.

The Obama administration set a new goal to cut methane emissions from the oil and gas sector from 2012 levels by 40–45% by 2025, and a set of actions to put the US on a path to achieve this goal. Trade associations across the industry reiterated earlier statements that regulations would try to solve problems which already are being addressed.

Methane—natural gas’ primary component—is a potent greenhouse gas, with 25 times the heat-trapping potential of carbon dioxide over 100 years, the White House said in a fact sheet. Methane emissions accounted for nearly 10% of US GHG emissions in 2012, with nearly 30% of that amount coming from oil and gas production, transportation, and distribution, it indicated.

Emissions from US oil and gas operations are 16% lower than in 1990, White Advisor John D. Podesta conceded. “However, without additional action, emissions from this sector are projected to rise more than 25 percent by 2025,” he said in a Jan. 14 blog.

Achieving this goal would save as much as 180 bcf of wasted gas in 2025, enough to heat more than 2 million homes for a year, he maintained.

The administration announced a coordinated, multiagency effort that it said would consider the important role of the US Federal Energy Regulatory Commission, state utility commissions, environmental agencies, and the oil and gas industry.

EPA rulemaking

It said EPA will initiate a rulemaking effort to establish limits for emissions of volatile organic compounds (VOCs), as well as methane, from new and modified oil and gas production sources, and from gas processing and transmission sources. Proposed requirements would be issued this summer, and regulations would become final in 2016.

“In developing these standards, EPA will work with industry, states, tribes, and other stakeholders to consider a range of commonsense approaches that can reduce emissions from the sources discussed in the agency’s oil and gas white papers, including oil well completions, pneumatic pumps, and leaks from well sites, gathering and boosting stations, and compressor stations,” the fact sheet said.

“As it did in the 2012 [VOCs] standards, the agency, in developing the proposal and final standards, will focus on in-use technologies, current industry practices, emerging innovations and streamlined and flexible regulatory approaches to ensure that emissions reductions can be achieved as oil and gas production and operations continue to grow,” it continued.

EPA also 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, according to the White House. These guidelines will also reduce methane emissions in these areas, it said.

The agency also will expand GHG reporting requirements to all oil and gas industry segments, and explore potential regulatory opportunities for applying remote sensing technologies and other measurement and monitoring innovations to further improve the identification and quantification of emissions and improve the reported data’s overall accuracy and transparency in a cost-effective manner, according to the White House.

BLM to update rules

It said the US Bureau of Land Management will proposed new requirements this spring to update decades-old requirements to reduce gas venting, flaring, and leaks on new and existing oil and gas wells on lands it administers. BLM will work closely with EPA to ensure an integrated approach, it added.

The US Pipeline and Hazardous Materials Safety Administration’s new pipeline safety proposals in 2015 also are expected to reduce methane administrations, the fact sheet said.

It said that when the White House issues its proposed fiscal 2016 budget in another few weeks, it will include $15 million in funding for the US Department of Energy to develop and demonstrate more cost-effective technologies to detect and reduce losses from gas transmission and distribution systems. This will include efforts to repair leaks and develop next generation compressors, it said.

The president also will ask Congress to authorize a $10 million outlay to launch a program at DOE to enhance the quantification of emissions from gas infrastructure for inclusion in the national Greenhouse Gas Inventory in coordination with EPA, the fact sheet said.

It said DOE will continue to take steps to encourage emissions reductions particularly from gas transmission and distribution operations, including issuing energy efficiency standards for gas and air compressors; advancing research and development to bring down the cost of detecting leaks; working with FERC to modernize gas infrastructure; and partnering with the National Association of Regulatory Utility Commissioners and local distribution companies to accelerate pipeline repair and replacement.

‘Power players’

“Oil and gas companies can also choose to become power players in reducing harmful, wasteful methane emissions from existing sources,” Podesta said in his blog. “Voluntary efforts to reduce emissions by the oil and gas industry could realize significant reductions in a quick, flexible, cost-effective way.”

He said, “The Obama administration stands ready to work with companies, individually and through broader initiatives such as the One Future Initiative and the Downstream Initiative, to develop and verify robust commitments to reduce methane emissions throughout the oil and gas system.”

Oil and gas industry association leaders quickly responded. Methane emissions from production operations are falling, and new regulations on methane proposed by the Obama administration could disrupt America’s energy renaissance, American Petroleum Institute Pres. Jack N. Gerard warned.

“As oil and gas production has risen dramatically, methane emissions have fallen thanks to industry leadership and investment in new technologies,” Gerard said. “And even with that knowledge, the White House has singled out oil and gas for regulation, where methane emissions represent only 2% of total GHG emissions.”

Independent Petroleum Association of America Executive Vice-Pres. Lee O. Fuller said, “The administration’s own research shows that while US oil and gas production has grown 400%, methane emissions have declined to about 1.3% of total GHG emissions. Existing regulations on new natural wells will further reduce these emissions.”

No price tag

Fuller said the administration needs to recognize that broad new regulatory actions are not necessary and focus its attention on cooperative measures to cost-effectively develop further reductions in this small component of the total GHG emissions inventory. “Consequently, the fact that there is no price tag associated with the administration’s proposal is cause for serious concerns, at a time where America’s oil and natural gas production industry is experiencing significant uncertainty,” he noted.

Natural Gas Supply Association Pres. Dena E. Wiggins also called new methane reduction regulations unnecessary and counterproductive, while failing to recognize the strong economic incentive to capture and use methane.

“The natural gas industry is committed to responsible production and that commitment is reinforced through market mechanisms that encourage methane to be captured and used,” she said. “In fact, increased use of natural gas in recent years helped reduce US carbon dioxide emissions to their lowest levels in decades. Well-functioning gas markets can help continue that trend going forward.”

But Interstate Natural Gas Association of American Pres. Donald F. Santa said the association representing interstate gas pipelines will reserve judgment on the plan “given the high-level nature of the administration’s methane blueprint” until it sees more details.

“Still, many of the actions INGAA already has initiated seem consistent with the direction of the administration’s proposal,” he continued. “For example, INGAA members last year committed to develop industry guidelines for directed inspection and maintenance (DI&M) of gas pipeline facilities. DI&M is a well-established and EPA-recognized tool for detecting and mitigating leaks in a cost-effective manner. While most INGAA member pipeline companies use DI&M, the guidelines will improve consistency and uniformity, which should result in further emissions reductions.”

New red tape

Kathleen Sgamma, vice-president of government and public affairs at the Western Energy Alliance in Denver, said the White House’s plan is another case of the administration adding new red tape to make mandatory what oil and gas producers have been doing voluntarily for years. “By imposing costly regulations on a small source of emissions, [it] is losing sight of a real climate change solution while continuing to choke out a source of economic growth,” she observed.

“Further, proposed BLM rules on flaring and venting are a convoluted way to tackle an issue, but then, this administration’s first reaction is always to pile on more red tape,” Sgamma continued. “Rates of flaring on public lands exceed those on private lands because it takes BLM so long to approve the rights of way necessary before gas gathering lines can be installed. By simply processing ROWs in a timely manner, BLM could reduce flaring in the very near term, rather than going through a long, drawn out rulemaking process.”

The American Gas Association, meanwhile, said in a statement, “Safety is the core value and top priority for natural gas utilities, and due to continuing efforts to modernize infrastructure and enhance pipeline safety, emissions are on a declining trend. 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.”

Contact Nick Snow at nicks@pennwell.com.

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