EPA proposes methane emissions requirements for oil, gas industry

The US Environmental Protection Agency has proposed requirements aimed at reducing emissions of methane and volatile organic compounds (VOC) from all US oil and gas industry segments. Officials from several oil and gas associations immediately criticized the Aug. 18 action. Environmental organizations welcomed it.

Methane, the key constituent of natural gas, is a potent greenhouse gas (GHG) with a global warming potential more than 25 times greater than that of carbon dioxide, EPA said in its announcement. It is the second most prevalent GHG coming from human activity in the US, with nearly 30% of its total emissions from oil and gas operations, the agency noted.

EPA officials acknowledged that the latest proposals are part of the Obama administration’s broader climate strategy, which includes its Clean Power Plan (CPP) that anticipates broader use of gas to replace coal-fired power plants.

“Cleaner-burning energy sources like natural gas are key compliance options for our [CPP] and we are committed to ensuring safe and responsible production that supports a robust clean energy economy,” EPA Administrator Gina McCarthy said.

The proposals specifically would update New Source Performance Standards for additional oil and gas industry segments. “The updates build on the 2012 rules by extending coverage to hydraulically fractured oil wells and further downstream,” Janet McCabe, acting assistant administrator for EPA’s Office of Air and Radiation, said in a teleconference with reporters. “They also extend methane standards that already are recovered by [VOC] requirements.”

Proposals’ focus

EPA said the proposals would require operators find and repair methane and VOC leaks; capture associated gas from fraced oil wells; limit emissions from new and modified pneumatic pumps; and limit emissions from compressors, pneumatic pumps, and other equipment at gas transmission stations. They would produce estimated net climate benefits in 2025 totaling $120-150 million, and cut methane emissions from new and modified sources by 340,000-400,000 short tons, the agency said.

McCabe emphasized that the rules would allow operators to take a variety of approaches, including reductions under the voluntary methane reduction challenge EPA announced earlier this summer (OGJ Online, July 24, 2015). She also said the agency wants to work closely with states to effectively reduce methane and VOC emissions.

“EPA is not the only agency looking at these activities,” McCabe said. “We will continue to work with folks across the administration to identify what steps we should take.” Comments on the proposals will be accepted for 60 days following their publication in the Federal Register. EPA also plans to hold public hearings.

Some trade association leaders were critical. American Petroleum Institute Pres. Jack N. Gerard said the oil and gas industry already has reduced methane emissions from its operations significantly. “Even as production has surged, methane emissions from hydraulically fractured gas wells have fallen nearly 79% since 2005, and carbon dioxide emissions are down to 27-year lows,” he said.

Kathleen Sgamma, vice-president of government and public affairs at the Western Energy Alliance in Denver, said, “The problem with EPA making mandatory what industry is already doing is that it simply adds bureaucratic layers that remove flexibility and innovation while discouraging the development of the single most significant source of US GHG reductions. Rather than chasing a small amount of emissions at production sites, EPA’s time is better spent on issues that will deliver real environmental benefit.”

‘Costly and complicated’

Independent Petroleum Association of America Pres. Barry Russell said, “The administration is proposing a costly and complicated regulatory program for few environmental benefits. The resulting unnecessary costs and added uncertainty could inflict more pain on the men and women who work in the oil and gas industry—at a time when market forces are already creating economic challenges.”

Natural Gas Supply Association Pres. Dena E. Wiggins also noted that producers already have reduced their methane emissions through voluntary standards and best practices. “Well-functioning natural gas markets can help continue that trend going forward,” she said. “Implementing new regulations on methane emissions fails to recognize the existing strong economic incentive to capture and utilize [it].”

Interstate Natural Gas Association of America Pres. Donald F. Santa said that while the organization has not fully reviewed EPA’s proposal, INGAA is concerned that some aspects of it “would be impossible to implement cost-effectively, and that the regulations, if implemented, could adversely affect the reliability of interstate natural gas pipelines.”

America’s Natural Gas Alliance Pres. Martin J. Durbin predicted: “Gas producers will continue reducing methane emissions regardless of this proposal. Not only do we have an incentive to capture methane—it is the product we sell—but our track record of efficiency improvement and innovation are what drives the environmental, economic, and energy security benefits of gas.”

Contact Nick Snow at nicks@pennwell.com.

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