Petroleum and Natural Gas Fugitiveand Vented GHG Emissions ReportingProposed Rulemaking(Subpart W)Gas STAR Production Technology Transfer WorkshopMay 11, 2010Farmington, NM2•Majority of oil and gas fugitive and ventedemissions are methane (CH4) emissions thatcome from:―Natural gas production, processing,transmission, and distribution―Oil production•CH4emissions can be intentional (processventing) or unintentional (fugitive leaks,system malfunctions)•Carbon dioxide (CO2) emissions by the oil andgas industry are primarily combustion relatedfor compressor and equipment operation;fugitive and vented CO2is a relatively smallsource (e.g., acid gas removal duringprocessing)•EPA knowledge of industry through NaturalGas STAR Program experience (since 1993)Background: Emissions from Petroleumand Natural Gas Operations3Background: Petroleum and Natural GasIndustry EmissionsRankSubpartCodeName of SectorCovered Emissions(mil. tonnes ofCO2e/yr)1 MM Suppliers of Petroleum Products 2,8412 D Electricity Generation 2,2623 NN Suppliers of Natural Gas and Natural Gas Liquids 7834 OO Suppliers of Industrial GHGs 6435 W Petroleum and Natural Gas Systems 2726 C General Stationary Fuel Combustion 220Oil and Gas Systems are 5thlargest source in MRR*Oil and Natural Gas Systems emissions total includes fugitiveand vented emissions from newsectors, onshore production and distribution, which were notin the initial proposal.4Emissions Covered by Petroleum andNatural Gas Reporting RuleBreakdown of Oil and Gas Process (Fugitive and Vented) GHGEmissions by Sector•Total oil and gasprocess emissions~ 272 million tonnesCO2e/year•An estimated ~ 79million tonnesadditional CO2combustion emissionscovered (reportedunder Subpart C)•Proposal covers 88.6% of total oil and gas industry emissions (process plusincremental combustion emissions)Grey shading indicatesemissions from facilitiesincluded in initialproposal, blue indicatesnew sectorsUnderground Storage,2.4%LNG Storage, 0.6%Onshore Petroleum andGas Production 57.2%Offshore Petroleum andGas Production, 1.6%Natural Gas Processing,10.8%Natural Gas TransmissionCompression, 18.9%LNG Import/Export, 0.1%Natural Gas Distribution8.3%5Background: Initial Oil and GasSystems Proposal•Proposed oil and gas reporting included in proposed MandatoryReporting Rule (MRR), published in the FR4/10/09•Required reporting fugitive and vented CO2and CH4emissions for 24individual sources (e.g. compressorseals, pneumatic devices, storagetanks) from the following facilities:- Offshore petroleum and natural gas production facilities- Onshore natural gas processing facilities, including gathering/boostingstations- 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 methaneemissions source) and natural gas distribution (fourth largest):– More time was needed to address complexity in defining a facility and diffuse,complex sources– Specifically sought comments on options for including these sectors•Data collection methodologies required comprehensive use of directmeasurement including:– Equipment-based leak detection and measurement of all fugitive emissions at allfacilities– Engineering estimates in combinationwith direct measurement for ventedemissions.DRAFT - DELIBERATIVE - DO NOT CITE OR QUOTE6DRAFT - DELIBERATIVE - DO NOT CITE OR QUOTEObjectives of Re-Proposal• Respond and address comments onsources coveredunder the initial proposal• Revise data collection methodologies to increase data qualityand reduce burden• Include the production and distribution sectors as theycontribute a significant portion of emissions• Focus efforts on most significant sources within each category7DRAFT - DELIBERATIVE - DO NOT CITE OR QUOTEKey Provisions of New ProposedPetroleum and Natural Gas ReportingRule• Reporters and facility definition:– Onshore petroleum and gas production(including EOR CO2 surface emissions),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 Distributioncompanies (LDCs)• Proposing a 25,000 metric ton threshold for all facilities• Data collection methods revised from initial proposal to collect robust datawhile better managing burden• Data collection to begin in 2011;reports due to EPA March 2012*Blue notes new facilities, not includedin initial oil and gas systems proposal8DRAFT - DELIBERATIVE - DO NOT CITE OR QUOTESummary of Revised Data CollectionApproach– Emissions CoverageNew CalculationMethodologySources CoveredEmissions CoverageEngineering EstimateMonitored process operatingparameters and either simulationmodels or emission factorsMajor Vented SourcesPneumatic device and pump vents,well venting for liquids unloading andcompletions and workovers, storagetanks, dehydrators64%Direct MeasurementMeters depending on source e.g.,flowmeter for once per yearmeasurementMajor Vented SourcesCompressor wet seal and rod packingvents, transmission condensate tanks,install meter for well venting optional6%Leak Detection and “Leaking”FactorLeak detection and apply a leakingfactor to estimate actual emissionsCompressor and SignificantNon-Compressor FugitivesCompressor fugitives and noncompressor plant/station fugitives23%Equipment Count andPopulation FactorGRI emission factors to estimatepotential emissions; GOADS forOffshoreMinor Fugitive Sources &OffshoreProduction surface equipmentfugitives, LDC mains, service lines,vaults, and other inaccessible sources7%9Petroleum and Natural Gas SystemsReporting Rule: Summary of Coverage andReporters• Total process (vented and fugitive) GHG emissions coverageis 272 million tonnes CO2e/year (88.6% of total oil and gas processemissions)• Leads to an additional 79 million tonnes combustion emissions (will be reportedunder General Stationary Fuel Combustion, subpart C)―Once petroleum and natural gas subpartis final, the MRR will cover over 85%of total oil and gas industry emissions (CO2, CH4, and N2O fugitive/ventedand combustion emissions)•Total number of facilities reporting is approximately 3,037 facilities─1,832 of those facilities are estimatedto be new reporters, 1,205 are alreadyreporting under another subpart of the Final MRR10Oil and Gas Systems Reporting Rule:Summary of Costs*Revised proposal includes initialproposed facilities and new sectors, onshore oil and gas productionand gas distribution. Year one costs are higher dueto the initial cost to install monitoring equipmentfor compressors and other sources. Subsequent costs are year 2, 3, 4 average.Source CoveredProcessEmissions(million metrictons CO2e/year)Total Cost(millions)Average Cost Effectiveness($ Per metric ton CO2e)Initial Proposal85$32.5 (Year 1)$28.1 (Subsequent)$0.38 (Year 1)$0.33 (Subsequent)*Revised Proposal272 $56 (Year 1)$21.4 (Subsequent)$0.21 (Year 1)$0.08 (Subsequent)• Total cost burden for reporting process emissions is$56 million in the first year,$21.4 in subsequent years―$3.9 million first and subsequent year costs for reporting additional combustionemissions• Despite inclusion of two new sectors (187 million metric tonsCO2e of emissions),revised proposal reporting burden (cost per metric ton)decreased by 45% ($0.38to $0.21) for first year costs and by75% ($0.33 to $0.08) for subsequentyearsQuestions / Comments• Welcome to meet with EPA• Must submit comments to docket in order for them to beconsidered• For more information, please go to:epa.gov/climatechangeRoger Fernandezfernandez.roger@epa.gov202-343-9386