Petroleum and Natural Gas Fugi

and Vented GHG Emissions Repo

Proposed Rulemaking

(Subpart W)

Gas STAR Production Technology Transfer Worksh

May 11, 2010

Farmington, NM
• Majority of oil and gas fugitive and vented 

emissions are methane (CH4) emissions that 

come from:

― Natural gas production, processing, 

transmission, and distribution

― Oil production

• CH4 emissions can be intentional (process 

venting) or unintentional (fugitive leaks, system malfunctions)

• Carbon dioxide (CO2) emissions by the oil and 

gas industry are primarily combustion related for compressor and equipment operation; fugitive and vented CO2 is a relatively small 

source (e.g., acid gas removal during processing)

• EPA knowledge of industry through Natural 

Gas STAR Program experience (since 1993)

Background: Emissions from Petroleum and Natural Gas Operations
Background: Petroleum and Natural Gas Industry Emissions

Rank Subpart Code Name of Sector Cov

(

1 MM Suppliers of Petroleum Products 

2 D Electricity Generation 

3 NN Suppliers of Natural Gas and Natural Gas Liquids 

4 OO Suppliers of Industrial GHGs 

5 W Petroleum and Natural Gas Systems 

6 C General Stationary Fuel Combustion 

Oil and Gas Systems are 5th largest source in M

*Oil and Natural Gas Systems emissions total includes fugitive and vented emissions fro

sectors, onshore production and distribution, which were not in the initial proposal. 
Emissions Covered by Petroleum and Natural Gas Reporting Rule

Breakdown of Oil and Gas Process (Fugitive and Vented) GHG 

Emissions by Sector

•Total oil and gas 

process emissions

~ 272 million tonnes 

CO

2e/year

• An estimated ~ 79 

million tonnes additional CO

2

combustion emissions covered (reported under Subpart C)

• Proposal covers 88.6% of total oil and gas industry emissions (proce

incremental combustion emissions)

G

e

p

Undergrou

2.

LNG Storag

Onshore Petroleum and 

Gas Production 57.2%

Offshore Petroleum and 

Gas Production, 1.6%

Natural Gas Processing, 

10.8%

Natural Gas 

Compress

LNG Import

Natural Gas Dis

8.3%
Background: Initial Oil and Gas Systems Proposal 

• Proposed oil and gas reporting included in proposed Mandatory Reporting Rule (MRR), published in the FR 4/10/09

• Required reporting fugitive and vented CO

2 and CH

4 emissions fo

individual sources (e.g. compressor seals, pneumatic devices, stotanks) from the following facilities: - Offshore petroleum and natural gas production facilities - Onshore natural gas processing facilities, including gathering/boo

stations

- Onshore natural gas transmission compression facilities - Underground natural gas storage facilities - Liquefied natural gas (LNG) storage facilities - LNG import and export facilities.

• Did not include onshore oil and gas production (the largest meth

emissions source) and natural gas distribution (fourth largest): – More time was needed to address complexity in defining a facility and d

complex sources – Specifically sought comments on options for including these sectors

• Data collection methodologies required comprehensive use of dir

measurement including: – Equipment-based leak detection and measurement of all fugitive emiss

facilities

– Engineering estimates in combination with direct measurement for ven

emissions.

DRAFT - DELIBERATIVE - DO NOT CITE OR QUOTE
DRAFT - DELIBERATIVE - DO NOT CITE OR QUOTE

Objectives of Re-Proposal

• Respond and address comments on sources covered 

under the initial proposal 

• Revise data collection methodologies to increase data q

and reduce burden 

• Include the production and distribution sectors as they 

contribute a significant portion of emissions

• Focus efforts on most significant sources within each c
DRAFT - DELIBERATIVE - DO NOT CITE OR QUOTE

Key Provisions of New Proposed Petroleum and Natural Gas Reporting Rule

• Reporters and facility definition:

– Onshore petroleum and gas production (including EOR CO2 surface e

basin level reporting

– Offshore petroleum and gas production platforms– Natural gas processing plants– Natural gas transmission compression facilities – Underground natural gas storage facilities – Liquefied natural gas (LNG) storage facilities – LNG import and export facilities– Natural gas distribution facilities, owned or operated by Local Distribu

companies (LDCs)

• Proposing a 25,000 metric ton threshold for all facilities • Data collection methods revised from initial proposal to collect robu

while better managing burden

• Data collection to begin in 2011; reports due to EPA March 2012

*Blue notes new facilities, not included in initial oil and gas systems proposal
DRAFT - DELIBERATIVE - DO NOT CITE OR QUOTE

Summary of Revised Data Collection Approach– Emissions Coverage

New Calculation 

Methodology

Sources Covered Emissio

Engineering Estimate Monitored process operating parameters and either simulation models or emission factors

Major Vented SourcesPneumatic device and pump vents, well venting for liquids unloading and completions and workovers, storage tanks, dehydrators

64%

Direct MeasurementMeters depending on source e.g., flowmeter for once per year measurement

Major Vented SourcesCompressor wet seal and rod packing vents, transmission condensate tanks, install meter for well venting optional

6%

Leak Detection and “Leaking”FactorLeak detection and apply a leaking factor to estimate actual emissions

Compressor and Significant Non-Compressor Fugitives Compressor fugitives and noncompressor plant/station fugitives

23%

Equipment Count and Population FactorGRI emission factors to estimate potential emissions; GOADS for Offshore

Minor Fugitive Sources & Offshore Production surface equipment fugitives, LDC mains, service lines, vaults, and other inaccessible sources 

7%
Petroleum and Natural Gas Systems Reporting Rule: Summary of Coverage and Reporters

• Total process (vented and fugitive) GHG emissions coverage 

is 272 million tonnes CO

2e/year (88.6% of total oil and gas pr

emissions) 

• Leads to an additional 79 million tonnes combustion emissions (will 

under General Stationary Fuel Combustion, subpart C)― Once petroleum and natural gas subpart is final, the MRR will cov

of total oil and gas industry emissions (CO

2, CH

4, and N

2O fugitive

and combustion emissions)

• Total number of facilities reporting is approximately 3,037 fa

─ 1,832 of those facilities are estimated to be new reporters, 1,205 ar

reporting under another subpart of the Final MRR
Oil and Gas Systems Reporting Rule: Summary of Costs

*Revised proposal includes initial proposed facilities and new sectors, onshore oil and ga

and gas distribution. Year one costs are higher due to the initial cost to install monitorifor compressors and other sources. Subsequent costs are year 2, 3, 4 average.

Source Covered

Process 

Emissions

(million metric 

tons CO

2e/year)

Total Cost 

(millions)

Average Cost 

($ Per metr

Initial Proposal 85 $32.5 (Year 1) $28.1 (Subsequent) $0.38 (

$0.33 (Su

*Revised Proposal 272 $56 (Year 1) $21.4 (Subsequent) $0.21 (

$0.08 (Su

• Total cost burden for reporting process emissions is $56 million in the firs

$21.4 in subsequent years 

― $3.9 million first and subsequent year costs for reporting additional comb

emissions 

• Despite inclusion of two new sectors (187 million metric tonsCO

2e of emission

revised proposal reporting burden (cost per metric ton) decreased by 45% 

to $0.21) for first year costs and by 75% ($0.33 to $0.08) for subseqyears
Questions / Comments 

• Welcome to meet with EPA• Must submit comments to docket in order for them 

considered

• For more information, please go to:

epa.gov/climatechangeRoger Fernandezfernandez.roger@epa.gov202-343-9386