United States Office of Air EPA 430-R-99-013

Environmental Protection and Radiation September 1999

Agency (6202J)

U.S. Methane Emissions 1990 – 2020:

Inventories, Projections, and

Opportunities for Reductions

1990 2000 2010 2020

Methane

Emissions Forecast

Natural Gas Systems

C

H H

H

H

Landfills

Livestock Manure

Management

Enteric

Fermentation

Quantity Abated

$/TCE

Marginal

Abatement Curves

Greenhouse

Gas Emissions

Coal Mining
How to Obtain Copies

You may electronically download this document from the U.S. EPA’s web page on Climate

Change – Methane and Other Greenhouse Gases at http://www.epa.gov/ghginfo. To obtain

additional copies of the report, call +1(888)STAR-YES (1(888) 7827-937).

For Further Information

The results presented in this report are available to analysts in an electronic format. For

additional information, contact Mr. Francisco de la Chesnaye, Office of Air and Radiation,

Office of Atmospheric Programs, Climate Protection Division, Methane Energy Branch, Tel

+1(202) 564 – 0172, Fax +1(202) 565 – 2077, or e-mail delachesnaye.francisco@epa.gov.
U.S. Methane Emissions 1990-2020:

Inventories, Projections, and

Opportunities for Reductions

September 1999

U.S. Environmental Protection Agency

Office of Air and Radiation

401 M St., SW

Washington, DC 20460

U.S.A.
 Blank page
i

Abbreviations, Acronyms, and Units

AF Activity factor

ASAE American Society of Agricultural

Engineers

Bcf Billion cubic feet

BMP Best management practice

CAA Clean Air Act

CCAP Climate Change Action Plan

C&D Construction and demolition

CFC Chlorofluorocarbon

CH4 Methane

CMOP Coalbed Methane Outreach Program

CO2 Carbon dioxide

DI&M Directed inspection and maintenance

DOE Department of Energy

EF Emission factor

EIA Energy Information Administration

EPA Environmental Protection Agency

E-PLUS Energy Project Landfill Gas Utilization

Software

GAA Government Advisory Associates

GHG Greenhouse gas

GSAM Gas Systems Analysis Model

GWP Global warming potential

IC Internal combustion

IPCC Intergovernmental Panel on Climate

Change

kW kilowatt

kWh kilowatt-hour

LMOP Landfill Methane Outreach Program

MAC Marginal abatement curve

Mcf Thousand cubic feet

MMBtu Million British thermal units

MMcf/d Million cubic feet per day

MMTCE Million (metric) tons of carbon equivalent

MMT Million (metric) tons

MSHA Mine Safety and Health Administration

MSW Municipal solid waste

MW Megawatt

NMOC Non-methane organic compound

NPV Net present value

O&M Operation and maintenance

PRO Partner-reported opportunity

RLEP Ruminant Livestock Efficiency Program

Tcf Trillion cubic feet

Tg Teragram

TCE Metric ton of carbon equivalent

UNFCCC United Nations Framework Convention on

Climate Change

USDA United States Department of Agriculture

VOC Volatile organic compound

WIP Waste-in-place

Conversions

1 Mcf Methane = 1 MMBtu

1 Bcf = 1,000 MMcf

1 Tg = 1 x 1012 g

1 Tg CH4 = 1 MMT CH4

1 MMT CH4 = 5.73 MMTCE

GWP of CO2 = 1

GWP of CH4 = 21
ii

Acknowledgements

This report was produced by the U.S. EPA’s Methane Energy Branch in the Office of Air and Radiation,

Office of Atmospheric Programs, Climate Protection Division. The report would not have been complete

without the efforts and contributions of many individuals and organizations. The following individuals

reviewed a preliminary version of this report and provided useful comments, many of which were

addressed for this final version. The reviewers included: Peter Carothers (Alternative Energy

Development), Tom Conrad (SCS Engineers), Kimberly Denbow (American Gas Association), Lorna

Greening (Hagler Bailly Services, Inc.), Matthew R. Harrison (Radian International), William Jewell

(Cornell University), Barry L. Kintzer (USDA), Eugene Lee (USEPA), Bob Lott (Gas Research Institute),

Richard Mattocks (Environomics), John Reilly (Massachusetts Institute of Technology), Glenda E. Smith

(American Petroleum Institute), Pramod C. Thakur (Consol Inc.), Lori Traweek (American Gas

Association), Greg Vogt (SCS Engineers), Ann C. Wilkie (University of Florida), and Peter Wright

(Cornell University). Although these individuals participated in the review of this analysis, their efforts

do not necessarily constitute an endorsement of the report’s results or of any U.S. EPA policies and

programs.

In particular, the Methane Energy Branch staff contributed significantly to the report. They are: Ed Coe,

Shelley Cohen, and Brian Guzzone on Landfills; Paul Gunning and Carolyn Henderson on Natural Gas

Systems; Karl Schultz and Roger Fernandez on Coal Mining; Kurt Roos on Livestock Manure; Mark

Orlic and Tom Wirth on Enteric Fermentation; Bill Irving on Inventories; and Michele Dastin-van Rijn on

the preliminary version of the report. Francisco de la Chesnaye directed the final analysis and completion

of the report with support from Reid Harvey and oversight from Dina Kruger.

The staff of the Global Environmental Issues Group at ICF Consulting deserves special recognition for its

expertise, efforts in preparing many of the individual analyses, and for synthesizing this report.
U.S. Environmental Protection Agency – September 1999 Table of Contents iii

Table Of Contents

Abbreviations, Acronyms, Units, and Conversions.........................................................................................i

Acknowledgements........................................................................................................................................ii

Table of Contents.......................................................................................................................................... iii

EXECUTIVE SUMMARY........................................................................................................................ ES-1

1.0 INTRODUCTION AND AGGREGATE RESULTS .......................................................................... 1-1

1.0 Overview of Methane Emissions ............................................................................................. 1-1

2.0 Sources of Methane Emissions ............................................................................................... 1-2

2.1 Natural Methane Emissions............................................................................................. 1-2

2.2 Anthropogenic Methane Emissions ................................................................................. 1-4

3.0 Options for Reducing Methane Emissions............................................................................... 1-6

4.0 Economic Analysis of Reducing U.S. Methane Emissions...................................................... 1-7

5.0 Achievable Emission Reductions and Composite Marginal Abatement Curve ....................... 1-8

6.0 Significance of This Analysis ................................................................................................. 1-11

7.0 Background to This Report .................................................................................................... 1-11

8.0 References............................................................................................................................. 1-13

9.0 Explanatory Notes.................................................................................................................. 1-15

2.0 LANDFILLS ..................................................................................................................................... 2-1

1.0 Methane Emissions from Landfills ........................................................................................... 2-2

1.1 Emission Characteristics ................................................................................................. 2-2

1.2 Emission Estimation Method ........................................................................................... 2-2

1.3 Emission Estimates ......................................................................................................... 2-3

1.3.1 Current Emissions and Trends .............................................................................. 2-4

1.3.2 Future Emissions and Trends................................................................................ 2-4

1.4 Emission Estimate Uncertainties ..................................................................................... 2-5

2.0 Emission Reductions ............................................................................................................... 2-5

2.1 Technologies for Reducing Methane Emissions ............................................................. 2-6

2.2 Cost Analysis of Emission Reductions ............................................................................ 2-6

2.2.1 Electricity Generation............................................................................................. 2-7

2.2.2 Direct Gas Use....................................................................................................... 2-8

2.3 Achievable Emission Reductions and Marginal Abatement Curve ................................. 2-9

2.4 Reduction Estimate Uncertainties and Limitations ........................................................ 2-11
iv U.S. Methane Emissions 1990 – 2020: Inventories, Projections, and Opportunities for Reductions

3.0 References............................................................................................................................. 2-13

4.0 Explanatory Notes.................................................................................................................. 2-15

3.0 NATURAL GAS SYSTEMS............................................................................................................. 3-1

1.0 Methane Emissions from Gas and Oil Systems ...................................................................... 3-2

1.1 Emission Characteristics ................................................................................................. 3-2

1.2 Emission Estimation Method ........................................................................................... 3-3

1.2.1 Natural Gas System Emissions ............................................................................. 3-3

1.2.2 Oil Industry Emissions ........................................................................................... 3-3

1.3 Emission Estimates ......................................................................................................... 3-4

1.3.1 Current Emissions and Trends .............................................................................. 3-5

1.3.2 Future Emissions and Trends................................................................................ 3-5

1.4 Emission Estimate Uncertainties ..................................................................................... 3-6

2.0 Emission Reductions ............................................................................................................... 3-7

2.1 Technologies for Reducing Methane Emissions ............................................................. 3-7

2.2 Cost Analysis of Emission Reductions ............................................................................ 3-7

2.3 Achievable Emission Reductions and Marginal Abatement Curve ................................. 3-9

2.4 Reduction Estimate Uncertainties and Limitations ........................................................ 3-11

3.0 References............................................................................................................................. 3-12

4.0 Explanatory Notes.................................................................................................................. 3-14

4.0 COAL MINING ............................................................................................................................... 4-1

1.0 Methane Emissions from Coal Mining ..................................................................................... 4-2

1.1 Emission Characteristics ................................................................................................. 4-2

1.2 Emission Estimation Method ........................................................................................... 4-3

1.2.1 Underground Mines ............................................................................................... 4-3

1.2.2 Surface Mines ........................................................................................................ 4-5

1.2.3 Post-Mining ............................................................................................................ 4-5

1.2.4 Methodology for Estimating Future Methane Liberated......................................... 4-5

1.3 Emission Estimates ......................................................................................................... 4-5

1.3.1 Current Emissions and Trends .............................................................................. 4-5

1.3.2 Future Emissions and Trends................................................................................ 4-6

1.4 Emission Estimate Uncertainties ..................................................................................... 4-6

2.0 Emission Reductions ............................................................................................................... 4-7

2.1 Technologies for Reducing Methane Emissions ............................................................. 4-7

2.1.1 Methane Recovery ................................................................................................ 4-7

2.1.2 Methane Use.......................................................................................................... 4-7

2.2 Cost Analysis of Emission Reductions ............................................................................ 4-8

2.3 Achievable Emission Reductions and Marginal Abatement Curve ............................... 4-10
U.S. Environmental Protection Agency – September 1999 Table of Contents v

2.4 Reduction Estimate Uncertainties and Limitations ........................................................ 4-11

3.0 References............................................................................................................................. 4-13

4.0 Explanatory Notes.................................................................................................................. 4-14

5.0 LIVESTOCK MANURE MANAGEMENT ........................................................................................ 5-1

1.0 Methane Emissions from Manure Management...................................................................... 5-2

1.1 Emission Characteristics ................................................................................................. 5-2

1.2 Emission Estimation Method ........................................................................................... 5-3

1.3 Emission Estimates ......................................................................................................... 5-4

1.3.1 Current Emissions and Trends .............................................................................. 5-4

1.3.2 Future Emissions and Trends................................................................................ 5-4

1.4 Emission Estimate Uncertainties ..................................................................................... 5-5

1.4.1 Current Emissions.................................................................................................. 5-5

1.4.2 Future Emissions ................................................................................................... 5-6

2.0 Emission Reductions ............................................................................................................... 5-6

2.1 Technologies for Reducing Methane Emissions ............................................................. 5-6

2.1.1 Switch to Dry Manure Management ...................................................................... 5-7

2.1.2 Recover and Use Methane to Produce Energy ..................................................... 5-7

2.2 Cost Analysis of Emission Reductions ............................................................................ 5-8

2.2.1 Costs...................................................................................................................... 5-9

2.2.2 Cost Analysis Methodology.................................................................................... 5-9

2.3 Achievable Emission Reductions and Marginal Abatement Curve ............................... 5-11

2.4 Reduction Estimate Uncertainties and Limitations ........................................................ 5-15

3.0 References............................................................................................................................. 5-16

4.0 Explanatory Notes.................................................................................................................. 5-17

6.0 ENTERIC FERMENTATION............................................................................................................ 6-1

1.0 Methane Emissions from Enteric Fermentation....................................................................... 6-2

1.1 Emission Characteristics ................................................................................................. 6-2

1.2 Emission Estimation Method ........................................................................................... 6-2

1.2.1 Factors Affecting Methane Emissions from Enteric Fermentation......................... 6-2

1.2.2 Method for Estimating Current Methane Emissions .............................................. 6-3

1.2.3 Method for Estimating Future Methane Emissions................................................ 6-3

1.3 Emission Estimates ......................................................................................................... 6-4

1.3.1 Current Emissions and Trends .............................................................................. 6-4

1.3.2 Future Emissions and Trends................................................................................ 6-4

1.4 Emission Estimate Uncertainty........................................................................................ 6-5

2.0 Emission Reductions ............................................................................................................... 6-6

2.1 Technologies for Reducing Methane Emissions ............................................................. 6-6
vi U.S. Methane Emissions 1990 – 2020: Inventories, Projections, and Opportunities for Reductions

2.2 Achievable Emission Reductions..................................................................................... 6-8

2.3 Reduction Estimate Uncertainties and Limitations ........................................................ 6-10

3.0 References............................................................................................................................. 6-11

Appendix I: Supporting Material for Composite Marginal Abatement Curve............................................. I-1

Appendix II: Supporting Material for the Analysis of Landfills .................................................................. II-1

Appendix III: Supporting Material for the Analysis of Natural Gas Systems ........................................... III-1

Appendix IV: Supporting Material for the Analysis of Coal Mining ..........................................................IV-1

Appendix V: Supporting Material for the Analysis of Livestock Manure Management.............................V-1

Appendix VI: Supporting Material for the Analysis of Enteric Fermentation............................................VI-1
U.S. Environmental Protection Agency – September 1999 Executive Summary ES- 1

Executive Summary

Methane gas is a valuable energy resource and the leading anthropogenic contributor to global warming after carbon dioxide. Atmospheric methane concentrations have doubled over the last 200 years and continue to rise, although the rate of increase is slowing (Dlugokencky, et al., 1998). By mass, methane has 21 times the global

warming potential of carbon dioxide over a 100-year time frame. Methane accounts for 10 percent of U.S. greenhouse gas emissions (excluding sinks) and reducing these emissions is a key goal of the U.S. Climate Change Action Plan (EPA, 1999).

The major sources of anthropogenic methane emissions in the U.S. are landfills, agriculture (livestock enteric fermentation and manure management), natural gas and oil systems, and coal mines. Smaller sources in the U.S. include rice cultivation, wastewater treatment, and others. Unlike other greenhouse gases, methane can be used to

produce energy since it is the major component (95 percent) of natural gas. Consequently, for many methane

sources, opportunities exist to reduce emissions cost-effectively or at low cost by capturing the methane and using

it as fuel.

This report has two objectives. First, it presents the U.S. Environmental Protection Agency’s (EPA’s) baseline

forecast of methane emissions from the major anthropogenic sources in the U.S., and EPA’s cost estimates of reducing these emissions. Emission estimates are given for 1990 through 1997 with projections for 2000 to 2020.

The cost analysis is for 2000, 2010, and 2020. Second, this report provides a transparent methodology for the calculation of emission estimates and reduction costs, thereby enabling analysts to replicate these results or use the

approaches described herein to conduct similar analyses for other countries.

Baseline Methane Emission Estimates

EPA estimates annual emissions for 1990 to 1997 and forecasts emissions for 2000, 2010, and 2020. In 1990, the

U.S. emitted 169.9 million metric tons of carbon equivalent (MMTCE) or 29.7 Teragrams (Tg) of methane. By

1997, estimated methane emissions were slightly higher at 179.6 MMTCE (31.4 Tg) (EPA, 1999). The baseline

U.S. methane emission forecast for 2010 is 186.0 MMTCE (32.5 Tg) which is almost a ten percent increase over

the 1990 levels. However, this forecast excludes the expected reductions associated with U.S. voluntary programs.

When these programs are taken into account, methane emissions are expected to remain at or below 1990 levels

through 2020. Exhibit ES-1 shows current methane emissions and projections by industry.

Exhibit ES-1: U.S. Methane Emissions (MMTCE)

Landfills 37%

Natural Gas and Oil 20% Other 4%

Coal 10%

Manure 10%

Enteric

Fermentation 19%

Source Breakdown of 1997 U.S. Methane Emissions

Total = 179.6 MMTCE

Source: EPA, 1999.

Year

Source Breakdown of Baseline Forecast Emissions

Tg

CH4

MMTCE @

21 GWP

115 20

10

 5

86 15

57

29

0

143 25

172 30

2000 2010 2020

Enteric Fermentation

Livestock Manure

Coal Mining

Landfills

1990

Other

Natural Gas and Oil

200 35
ES-2 U.S. Methane Emissions 1990-2020: Inventories, Projections, and Opportunities for Reductions

To estimate historic and future emissions, EPA characterizes the source industries in detail and identifies

the specific processes within those industries that produce emissions. Forecasts are based on a consistent

set of industry factors, e.g., consumption, prices, technological change, and infrastructure makeup. The

major emission sources are outlined below.

3⁄4 Landfills. The largest source (accounting for 37

percent) of U.S. anthropogenic methane emissions, landfills generate methane during anaerobic

decomposition of organic waste. In 1990, landfills

generated 56.2 MMTCE (9.8 Tg) of methane,

which increased to 66.7 MMTCE (11.6 Tg) by

1997 (EPA, 1999). Baseline emissions are expected to decrease to 52.0 MMTCE (9.1 Tg) in

2010, due to the Clean Air Act New Source Performance Standards and Emissions Guidelines

(Landfill Rule). The Landfill Rule requires the

nation’s largest landfills to reduce emissions of

non-methane organic compounds and results in a

simultaneous reduction in methane emissions.

The principal technologies for reducing emissions

from landfills involve collecting methane and using it as fuel for electric power generation or for

sale to nearby industrial users.

3⁄4 Natural Gas Systems. Emissions of methane

occur throughout the natural gas system from

leaks and venting of gas during normal operations,

maintenance, and system upsets. In 1990, methane emissions from the U.S. natural gas system

totaled about 32.9 MMTCE (5.7 Tg), and by 1997

methane emissions were estimated at 33.5

MMTCE (5.8 Tg) (EPA, 1999). EPA expects

emissions to increase as natural gas consumption

increases, although at a lower rate than gas consumption growth. Baseline emissions reach 37.9

MMTCE (6.6 Tg) in 2010. Improved management practices and technologies can reduce leaks

or avoid venting of methane from all parts of the

natural gas system.

3⁄4 Coal Mining. Methane and coal are formed together by geological forces during coalification.

As coal is mined, the methane is released. Because methane is hazardous to miners, underground mines use ventilation systems to dilute it

and additional techniques to recover it during or in

advance of mining. In 1990, coal mine methane

emissions were estimated at 24.0 MMTCE (4.2

Tg). By 1997, emissions fell to 18.8 MMTCE

(3.3 Tg) mainly due to reduced coal production at

“gassy” mines and increased methane recovery

(EPA, 1999). Baseline methane emissions reach

28.0 MMTCE (4.9 Tg) by 2010 due to growth in

coal mining from deep mines. The major technologies for reducing emissions include recovery

and sale to pipelines, use for power generation, or

on-site use. Catalytic oxidation of methane in

ventilation air may also be undertaken to reduce

emissions.

3⁄4 Livestock Manure Management. Methane is

produced during the anaerobic decomposition of

livestock manure. The major sources of U.S. livestock manure methane include large dairy and

cattle operations and hog farms that use liquid

manure management systems. In 1990, livestock

manure emitted about 14.9 MMTCE (2.6 Tg) of

methane. Emissions from this source increased to

17.0 MMTCE (3.0 Tg) by 1997 (EPA, 1999).

Baseline emissions reach 22.3 MMTCE (3.9 Tg)

in 2010 due to animal population growth driven

by increases in total meat and dairy product consumption and increasing use of liquid waste management systems that produce methane. Existing

cost-effective technologies can be used to recover

this methane to produce energy.

3⁄4 Enteric Fermentation. Methane emissions from

livestock enteric fermentation were 32.7 MMTCE

(5.7 Tg) in 1990 and 34.1 MMTCE (6.0 Tg) in

1997 (EPA, 1999). Baseline methane emissions

reach 37.7 MMTCE (6.6 Tg) by 2020 due to increased domestic and international demand for

U.S. livestock products. Emissions can be reduced through the application of improved management practices. The cost-effectiveness of these

practices has not been quantified as part of this

analysis, however.
U.S. Environmental Protection Agency – September 1999 Executive Summary ES- 3

Costs of Reducing Emissions

This report presents the results of extensive benefitcost analyses conducted on the opportunities (technologies and management practices) to reduce methane emissions from four of the five major U.S.

sources: landfills, natural gas systems, coal mining,

and livestock manure. To date, most economic analyses of U.S. greenhouse gas (GHG) emission reductions

have focused on energy-related carbon emissions since

carbon dioxide (CO2) currently accounts for about 82

percent of the total U.S. GHG emissions (weighted by

100-year global warming potentials) (EPA, 1999). The

cost estimates for reducing methane emissions presented in this report can be integrated into economic

analyses to produce more comprehensive assessments

of total GHG reductions. By including methane emission reductions, the overall cost of reducing GHG

emissions in the U.S. is reduced. At increasing values

for emission reductions, in terms of dollars per metric

ton of carbon equivalent ($/TCE), more costly CO2

reductions can be substituted by lower cost methane

reductions, when available, thereby lowering the marginal cost and the total cost of a particular GHG emission reduction level.

The cost analysis is conducted for the years 2000,

2010, and 2020. All values are in 1996 constant dollars. Results for the source-specific analyses are summarized below.

3⁄4 Landfills. The cost analysis focuses on technologies for recovering and using landfill methane for

energy. Two options are evaluated: use of landfill

methane for electricity generation and as a fuel for

direct use by a nearby end-user. After accounting

for emission reductions due to the Landfill Rule,

at $0/TCE, about 21 percent of baseline emissions

from landfills could be captured and used costeffectively in 2000. Cost-effective reductions decrease slightly to 20 percent, at $0/TCE, in 2010,

in part reflecting greater coverage of total emissions by the Landfill Rule. At $30/TCE, emissions could be reduced by 38 percent from the

baseline in 2000, and by 41 percent in 2010.

Emission reductions approach their maximum at

$100/TCE in 2000, and $40/TCE in 2010. EPA

projects the incremental benefits of higher values

for carbon equivalent to be slightly smaller in

2020 due to the Landfill Rule.

3⁄4 Natural Gas Systems. Cost curves for reducing

methane emissions from natural gas systems are

based on technologies and practices for reducing

leaks and venting of natural gas in the natural gas

system. EPA evaluates 118 technologies and

practices that have been identified by the gas industry in conjunction with EPA’s Natural Gas

STAR Program. EPA’s analysis assesses the costeffectiveness of each technology and practice

based on the value of methane as natural gas. In

2000, 2010, and 2020, about 30 percent of the

projected emissions from natural gas systems can

be avoided cost-effectively, based on the value of

the saved methane. When a value of $30/TCE for

avoided emissions is added to the market price for

gas, about 35 percent of the emissions can be reduced. At $100/TCE, about 49 percent of emissions can be reduced. Additional technologies

could likely emerge in this sector to reduce emissions at high values for carbon equivalent, however, EPA only examines current technologies in

this analysis.

3⁄4 Coal Mining. EPA’s analysis for reducing coal

mine methane emissions focuses on recovering

methane from underground mining, which comprises 65 percent of the emissions from this

source. Two emission reduction strategies are

analyzed: recovering methane from mines for sale

as natural gas and using new catalytic oxidation

technologies. The results suggest that in 2010, 37

percent of emissions from coal mines can be costeffectively reduced at energy market prices, or

$0/TCE. Up to 71 percent of emissions can be reduced at $30/TCE, which represents essentially all

of the technically recoverable methane from this

source. In 2020, the same pattern exists with 41

percent recoverable at $0/TCE and 71 percent recoverable at $30/TCE.

3⁄4 Livestock Manure Management. Cost curves

for reducing methane emissions from livestock

manure are based on recovering and utilizing
ES-4 U.S. Methane Emissions 1990-2020: Inventories, Projections, and Opportunities for Reductions

methane produced at dairies and swine farms.

EPA’s analysis focuses on anaerobic digestion

technologies (including covered and complete mix

digesters) that capture methane for use on-site to

generate electricity. At current energy prices,

emissions from livestock manure could be reduced by 14 percent in 2000 and 2010. Emission

reductions increase slightly to 15 percent in 2020.

With an additional $30/TCE, emission reductions

reach 30 percent in 2000, 31 percent in 2010, and

32 percent in 2020. At $100/TCE, emissions can

be reduced by about 63 percent in 2000, 65 percent in 2010, and 67 percent in 2020.

3⁄4 Enteric Fermentation. Emissions from livestock

enteric fermentation can be reduced through enhanced feeding and animal management techniques. The costs and cost-effectiveness of these

reductions have not been quantified for this report.

The aggregate results of the analysis are presented in

two ways. Exhibit ES-2 summarizes potential reductions across all sources at various carbon equivalent

values. These reductions are the summation of sourcespecific results where different discount rates are applied to each source: 8 percent for landfills, 20 percent

for natural gas systems, 15 percent for coal mining,

and 10 percent for livestock manure management. For

2010, EPA estimates that up to 34.8 MMTCE (6.1 Tg)

of reductions are possible at energy market prices or

$0/TCE. Consequently, methane emissions could be

reduced below 1990 emissions of 169.9 MMTCE

(29.7 Tg) if many of the identified opportunities are

thoroughly implemented. At higher emission reduction values, more methane reductions could be

achieved. For example, EPA’s analysis indicates that

with a value of $20/TCE for abated methane added to

the energy market price, U.S. reductions could reach

50.3 MMTCE (8.8 Tg) in 2010.

EPA also constructs marginal abatement curves

(MACs) for each of the four sources along with an

aggregate curve for 2010 which is shown in Exhibit

ES-3. In order to properly construct the MAC for

2010, a discount rate of eight percent is equally applied

to all sources.1

 MACs are derived by rank-ordering

individual opportunities by cost per emission reduction

amount. Methane values and marginal costs are denominated in both energy values (natural gas and electricity prices) and emission reduction values in terms

of $/TCE. On the MACs, energy market prices are

aligned to $0/TCE, where no additional price signals

from emission reduction values exist to motivate reductions. At and below $0/TCE, all emission reductions are due to increased efficiencies, conservation of

methane, or both. As a value is placed on methane

emission reductions in terms of $/TCE, these values

are added to the energy market prices and allow for

additional reductions to clear the market. Any “belowthe-line” reduction amounts, with respect to $0/TCE,

illustrate this dual price-signal market, i.e., energy

prices and emission reduction values.

The aggregate U.S. MAC for 2010 in Exhibit ES-3

illustrates the following key findings. First, substantial

emission reductions, 36.8 MMTCE (6.4 Tg), can be

achieved at energy market prices with no additional

emission reduction values ($0/TCE). Second, at

2000 2010 2020

Baseline Emissions 173.9 186.0 183.7

Cumulative Reductions

at $0/TCE 30.8 34.8 35.0

at $10/TCE 36.4 42.3 40.9

at $20/TCE 41.7 50.3 47.4

at $30/TCE 54.6 61.7 58.7

at $40/TCE 56.2 63.5 61.0

at $50/TCE 59.5 66.9 64.8

at $75/TCE 64.3 71.9 70.7

at $100/TCE 67.2 74.9 74.0

at $125/TCE 68.4 76.2 75.5

at $150/TCE 68.7 76.5 75.9

at $175/TCE 69.0 76.8 76.2

at $200/TCE 69.2 77.0 76.5

Remaining Emissions 104.7 108.9 107.2

Exhibit ES-2: U.S. Baseline Emissions and Potential Reductions (source-specific discount rates) (MMTCE)

Year

MMTCE

@ 21 GWP

Tg

CH4

115 20

10

5

86 15

57

29

0

143 25

172 30

2000 2010

Remaining Emissions

Cost-Effective Reductions

Baseline Emissions

2020

Emission Levels at

Different $/TCE

$0

$20

$100

$50

$200

1990

200 35
U.S. Environmental Protection Agency – September 1999 Executive Summary ES- 5

$20/TCE and $50/TCE total estimated reductions are

52.6 MMTCE (9.2 Tg) and 70.0 MMTCE (12.2 Tg),

respectively. Third, at $100/TCE, total achievable

reductions are estimated at 75.5 MMTCE (13.2 Tg).

Finally, above $100/TCE, the MAC becomes inelastic,

that is, non-responsive to increasing methane values.

This inelasticity indicates the limits of the options considered. The magnitude of the cost-effective and

low-cost reductions reflects methane’s value as an

energy source and emphasizes that many proven

technologies can be used to recover it. For several

sources, the inelastic section of the curve at the

higher end of the cost range indicates a limitation

of the analysis, namely that only available technologies are assessed. Additional technologies

may become available to reduce methane emissions at these prices; however, EPA has not yet

assessed this possibility.

EPA has developed a number of voluntary programs as part of the Climate Change Action Plan

(CCAP) to overcome market barriers and encourage cost-effective methane recovery projects. In

this report, the emission reductions associated

with these CCAP programs have not been subtracted from the baseline emission projections.

However, EPA expects that approximately 50 percent of the reductions available in 2010 at $0/TCE

will be captured by these programs. These programs have reduced emissions by 8 MMTCE in

1998 and are expected to reduce emissions by 12

MMTCE in 2000, and 20 MMTCE in 2010.

Exhibit ES-3: Marginal Abatement Curve for U.S. Methane Emissions in 2010 (at an 8 percent discount rate)

($50)

$0

$50

$100

$150

$200

$250

0 10 20 30 40 50 60 70 80

A b ate d M e th an e (M M T C E)

V alu e o f C ar b o n Eq u ivale n t (1996 $/T C E)

In cr e as in g En e r g y Pr ice s 

($/M M Btu or $/k Wh)

Observed Data

Market Price

30 60 102

45

= − −MMTCE $/ TCE e
ES-6 U.S. Methane Emissions 1990-2020: Inventories, Projections, and Opportunities for Reductions

References

Dlugokencky, E.J., K.A. Masarie, P.M. Lang, and P.P. Tans. 1998. “Continuing Decline in the Growth Rate of the

Atmospheric Methane Burden,” Nature, v. 393, 4 June 1998.

EPA. 1999. Inventory of Greenhouse Gas Emissions and Sinks 1990-1997. Office of Policy, Planning, and

Evaluation, U.S. Environmental Protection Agency, Washington, DC. (Available on the Internet at

http://www.epa.gov/globalwarming/inventory/index.html.)
U.S. Environmental Protection Agency – September 1999 Executive Summary ES- 7

Endnotes

 1

 In the construction of a national or aggregate marginal abatement curve, a single discount rate is applied to all

sources in order to equally evaluate various options. Given a particular value for abated methane, all options up to

and including that value can be cost-effectively implemented. An eight percent discount rate, the lowest in the

range of the source-specific rates (8 to 20 percent), is used since it is closer to social discount rates employed in national level analyses. The results from the single, eight percent discount rate analysis are slightly higher than the

results where source-specific discount rates are used because a lower discount rate reduces project costs enabling

additional reductions.

U.S. Environmental Protection Agency – September 1999 Introduction 1-1

1. Introduction and Aggregate Results

Introduction

This report has two objectives. First, it presents the U.S. Environmental Protection Agency’s (EPA’s) baseline

forecast of methane emissions from the major anthropogenic sources in the U.S., and EPA’s cost estimates of reducing these emissions. Emission estimates are given for 1990 through 1997 with projections for 2000 to 2020.

The cost analysis is for 2000, 2010, and 2020. Second, this report provides a transparent methodology for the calculation of emission estimates and reduction costs, thereby enabling analysts to replicate these results or use the

approaches described herein to conduct similar analyses for other countries.

The information presented in this report can be used in several ways. The emission estimates and forecasts represent the most up-to-date estimates of methane emissions in the U.S.; thus, this report replaces and expands upon

EPA’s Anthropogenic Methane Emissions in the United States, Estimates for 1990, Report to Congress (1993a).

As such, this report can be used where estimates of future emissions are required. The report also summarizes the

state of knowledge on methane emissions from the major anthropogenic sources.

While the emission estimations are refinements of earlier approaches, the cost analyses presented in this report

represent a major contribution to the literature on mitigating emissions. To date, most economic analyses of

greenhouse gas (GHG) emission reductions have focused on the energy-related carbon emissions since carbon

dioxide (CO2) currently accounts for about 82 percent of the total U.S. emissions (weighted by 100-year global

warming potentials) (EPA, 1999). The cost-estimates for reducing methane emissions presented in this report can

be integrated into economic analyses to produce more comprehensive assessments of total GHG reductions. By

including methane emission reductions, the overall cost of reducing GHG emissions in the U.S. is reduced. At

increasing values for emission reductions, more costly CO2 reductions can be substituted by lower cost methane

reductions, when available, thereby lowering the marginal cost and the total cost of a particular GHG emission

reduction level.

The marginal abatement curves (MACs) developed in this report can be used to estimate possible emission reductions at various prices for carbon equivalent emissions or conversely, the costs of achieving certain amounts of

reductions. EPA recognizes that the cost analyses will change with the introduction of new technologies and additional research into methane emission abatement technologies. Other countries, nevertheless, can use the cost

analyses presented in this report as the basis for estimating emission reduction costs.

1.0 Overview of Methane

Emissions

Next to carbon dioxide, methane is the second largest

contributor to global warming among anthropogenic

greenhouse gases. Methane’s overall contribution to

global warming is significant because, over a 100-year

time frame, it is estimated to be 21 times more effective at trapping heat in the atmosphere than carbon

dioxide. As illustrated in Exhibit 1-1, methane accounts for 17 percent of the enhanced greenhouse effect (IPCC, 1996a).1

Over the last two centuries, methane’s concentration in

the atmosphere has more than doubled from about 700

parts per billion by volume (ppbv) in pre-industrial

times to 1,730 ppbv in 1997 (IPCC, 1996a). Exhibit

1-1 illustrates this trend. Scientists believe these atmospheric increases are largely due to increasing
1-2 U.S. Methane Emissions 1990-2020: Inventories, Projections, and Opportunities for Reductions

emissions from anthropogenic sources. Although atmospheric methane concentrations continue to rise, the

rate of increase appears to have slowed since the

1980s. If present trends continue, however, atmospheric methane concentrations will reach 1,800 ppbv

by 2020 (Dlugokencky, et al., 1998).

Atmospheric methane is reduced naturally by sinks.

Natural sinks are removal mechanisms and the greatest

sink for atmospheric methane (CH4) is through a reaction with naturally-occurring tropospheric hydroxyl

(OH).2

 Methane combines with OH to form water

vapor (H2O) and carbon monoxide (CO), which in turn

is converted into carbon dioxide (CO2). Atmospheric

methane, nevertheless, has a clearly defined chemical

feedback that decreases the effectiveness of the hydroxyl sink. As methane concentrations rise, less hydroxyl is available to break down methane, producing

longer atmospheric methane lifetimes and higher

methane concentrations (IPCC, 1996a).

On average, the atmospheric lifetime for a methane

molecule is 12.2 years (± 3 years) before a natural sink

consumes it (IPCC, 1996a). This relatively short lifetime makes methane an excellent candidate for mitigating the impacts of global warming because emission reductions could lead to stabilization or reduction

in methane concentrations within 10 to 20 years.

2.0 Sources of Methane

Emissions

Methane is emitted into the atmosphere from both

natural and anthropogenic sources. Natural sources

include wetlands, tundra, bogs, swamps, termites,

wildfires, methane hydrates, and oceans and freshwaters. Anthropogenic sources include landfills, natural gas and oil production and processing, coal mining,

agriculture (livestock enteric fermentation and livestock manure management, and rice cultivation), and

various other sources. By 1990, anthropogenic

sources accounted for 70 percent of total global methane emissions (EPA, 1993a; IPCC, 1996a). This section summarizes the natural and anthropogenic sources

of methane.

2.1 Natural Methane Emissions

In 1990, worldwide natural sources emitted 916 million metric tons of carbon equivalent (MMTCE) or

160 Teragrams (Tg) of methane into the atmosphere,

or about 30 percent of the total methane emissions

(IPCC, 1996a). The leading natural methane sources

are described below in descending order of their contribution to emissions (see Exhibit 1-2).

Wetlands. Methane is generated by anaerobic (oxygen poor) bacterial decomposition of plant material in

wetlands. Natural wetlands emit about 659 MMTCE

Exhibit 1-1: Global Enhanced Greenhouse Effect and Methane Concentrations

Historical Global Atmospheric Methane Concentrations

1,000

750

500

250

0

1,250

1,500

Year

1,750

Methane Concentration (ppbv)

2,000

1800 1850 1900 1950 2000

Source: Boden, et al., 1994; Dlugokencky, et al., 1998.

Contribution of Anthropogenic Gases to Enhanced

Greenhouse Effect Since Pre-Industrial Times

(measured in Watts/m2)

Methane 17%

Tropospheric O3 14%

N2O 5%

Carbon

Dioxide 55%

Source: IPCC, 1996a.

CFCs, HFCs 9%

Total = 2.85 Watts/m2

PFCs, SF6 <1%
U.S. Environmental Protection Agency – September 1999 Introduction 1-3

(115 Tg) of methane per year, which is 72 percent of

natural emissions and 20 percent of total global methane emissions (IPCC, 1995). Methane emissions from

wetlands will probably increase with global warming

as a result of accelerated anaerobic microbial activity.

In addition, climate change models predict increased

precipitation as global temperatures rise, which could

create more wetlands (EPA, 1993b). Tropical wetlands (between 20° N and 30° S) represent 17 percent

of total wetland area and 60 percent of emissions from

wetlands. These relatively high emissions are due to

higher temperatures, more precipitation and more intense solar radiation, which encourage higher plant

growth and decomposition rates (EPA, 1993b).

Northern Wetlands (those above 45° N) are usually

underlain with near-surface permafrost that prevents

soil drainage and creates wetland conditions. Northern

wetlands represent nearly 80 percent of the wetland

area and 35 percent of methane emissions from wetlands (EPA, 1993b).

Termites. Microbes within the digestive systems of

termites break down cellulose, and this process produces methane. Emissions from this source depend on

termite population, amounts of organic material consumed, species, and the activity of methane-oxidizing

bacteria. While more research is needed, some experts

believe that future trends in termite emissions are more

influenced by anthropogenic changes in land use, i.e.,

deforestation for agriculture, than by climate change.

Termites emit an estimated 115 MMTCE (20 Tg) of

methane each year (IPCC, 1995).

Oceans and Freshwaters. The surface waters of the

world’s oceans and freshwaters are slightly supersaturated with methane relative to the atmosphere and

therefore emit an estimated 57 MMTCE (10 Tg) of

methane each year (IPCC, 1995). The origin of the

dissolved methane is not known. In coastal regions it

may come from sediments and drainage. It also has

been suggested that methane is generated in the anaerobic gastrointestinal tracts of marine zooplankton

and fish (EPA, 1993b). Methane in freshwaters can

result from the decomposition of wetland plants. (In

this report, methane emissions from freshwaters are

included in the estimates for wetlands.) As atmospheric methane concentrations increase, the proportion

of methane supersaturated in oceans and freshwaters

will decline relative to the atmospheric concentrations

of methane, assuming that the methane concentration

in oceans and freshwaters remains constant.

Gas Hydrates. Methane is trapped in gas hydrates,

which are dense combinations of methane and ice located deep underground and beneath the ocean floor.

Recent estimates of hydrates suggest that around 44

billion MMTCE (7.7 billion Tg) of methane is trapped

in both oceanic and continental gas hydrates (DOE,

1998). Scientists agree that increasing temperatures

Exhibit 1-2: Worldwide Natural and Anthropogenic Methane Emissions in 1990

Anthropogenic (70%)

Landfills 11%

Livestock Manure 7%

Coal 8%

Other 4%

Domestic Sewage 7%

Biomass Burning 11%

Termites 13%

Wetlands 72%

Other 9%

Oceans 6%

Total = 916 MMTCE

World Total = 3,066 MMTCE

Source: IPCC, 1995 and 1996a.

Total = 2,150 MMTCE

Enteric Fermentation 23%

Rice Paddies 16%

Natural Gas and Oil 15%

Natural (30%)
1-4 U.S. Methane Emissions 1990-2020: Inventories, Projections, and Opportunities for Reductions

will eventually destabilize many gas hydrates, but are

unsure about the timing and the amount of methane

emissions that would be released from the deeply buried hydrates (EPA, 1993b).

Permafrost. Small amounts of methane are trapped in

permafrost, which consists of permanently frozen soil

and ice. (To be classified as permafrost, the ice and

soil mixture must remain at or below 0° Celsius yearround for at least two consecutive years.) Due to the

large amount of existing permafrost, the total amount

of methane stored in this form could be quite high,

possibly several thousand Tg (EPA, 1993b). This

methane is released when permafrost melts. However,

no estimates have been made for current emissions

from this source.

Wildfires. Wildfires are primarily caused by lightning

and release a number of greenhouse gases, including

methane which is a product of incomplete combustion.

However, no estimates are available for methane emissions from this source.

2.2 Anthropogenic Methane

Emissions

Methane emissions from anthropogenic sources account for 70 percent of all methane emissions and totaled 2,150 MMTCE (375 Tg) worldwide in 1990

(IPCC, 1996a). The leading global anthropogenic

methane sources are described below in descending

order of magnitude. The two leading sources of anthropogenic methane emissions worldwide are livestock enteric fermentation and rice production. By

contrast, in the U.S., the two leading sources of methane emissions are landfills and natural gas and oil systems (see Exhibit 1-3). In 1997, the U.S. emitted 179.6

MMTCE (31.4 Tg) of methane, about 10 percent of

global methane emissions for that year (EPA, 1999).

The U.S. is the fourth-largest methane emitter after

China, Russia, and India (EPA, 1994).

Enteric Fermentation. Ruminant livestock emit

methane as part of their normal digestive process,

during which microbes break down plant material consumed by the animal into material the animal can use.

Methane is produced as a by-product of this digestive

process, and is expelled by the animal. In the U.S.,

cattle emit about 96 percent of the methane from livestock enteric fermentation. In 1994, livestock enteric

fermentation produced 490 MMTCE (85 Tg) of methane worldwide (IPCC, 1995), with the emissions

coming from the former Soviet Union, Brazil, and India (EPA, 1994). EPA estimates that U.S. emissions

from this source were 34.1 MMTCE (6.0 Tg) in 1997

(EPA, 1999). Under EPA’s baseline forecast, livestock

enteric fermentation emissions in the U.S. will increase

to about 37.7 MMTCE (6.6 Tg) by 2020 (Exhibit 1-4).

The projected increase is due to greater consumption

of meat and dairy products.

Rice Paddies. Most of the world’s rice, including rice

in the United States, is grown on flooded fields where

organic matter in the soil decomposes under anaerobic

conditions and produces methane. The U.S. is not a

Exhibit 1-3: U.S. Methane Emissions

Landfills 37%

Natural Gas and Oil 20% Other 4%

Coal 10%

Livestock

Manure 10%

Enteric

Fermentation 19%

Source Breakdown of 1997 U.S. Methane Emissions

Total = 179.6 MMTCE

Source: EPA, 1999.

U.S. Greenhouse Gas Emissions in 1997

Weighted by Global Warming Potential

Total = 1,814 MMTCE

Source: EPA, 1999.

Methane 10%

Nitrous Oxide 6%

HFCs, PFCs, SF6 2%

Carbon Dioxide 82%
U.S. Environmental Protection Agency – September 1999 Introduction 1-5

major producer of rice and therefore emits little methane from this source. Worldwide emissions of methane from rice paddies were 345 MMTCE (60 Tg) in

1994 (IPCC, 1995), with the highest emissions coming

from China, India, and Indonesia (EPA, 1994). EPA

estimates U.S. emissions from this source at 2.7

MMTCE (0.5 Tg) in 1997 and expects emissions to

remain stable in the future (EPA, 1999).

Natural Gas and Oil Systems. Methane is the major

component (95 percent) of natural gas. During production, processing, transmission, and distribution of

natural gas, methane is emitted from system leaks,

deliberate venting, and system upsets (accidents).

Since natural gas is often found in conjunction with

petroleum, crude petroleum gathering and storage

systems are also a source of methane emissions. In

1994, natural gas systems worldwide emitted 230

MMTCE (40 Tg) of methane and oil systems emitted

85 MMTCE (15 Tg) of methane (IPCC, 1995). EPA

estimates that 1997 U.S. emissions were 33.5

MMTCE (5.8 Tg) from natural gas systems and 1.6

MMTCE (0.27 Tg) from oil systems (EPA, 1999).

EPA expects emissions from oil systems to remain

near 1997 levels through 2020. The baseline emission

forecast is 38.8 MMTCE (6.8 Tg) from natural gas

systems in 2020 (Exhibit 1-4). The increase results

from higher consumption of natural gas and expansions of the natural gas system.

Biomass Burning. Biomass burning releases greenhouse gases, including methane, but is not a major

source of U.S. methane emissions. In 1994, biomass

burning produced 230 MMTCE (40 Tg) of methane

worldwide (IPCC, 1995). EPA estimates that U.S.

emissions from this source were 0.2 MMTCE (0.03

Tg) in 1997 and that emissions will remain stable

through 2020 (EPA, 1999).

Landfills. Landfill methane is produced when organic

materials are decomposed by bacteria under anaerobic

conditions. In 1994, landfills produced 230 MMTCE

(40 Tg) of methane worldwide (IPCC, 1995). EPA

estimates that U.S. emissions from this source were

66.7 MMTCE (11.6 Tg) in 1997 (EPA, 1999). The

baseline forecast is 41.1 MMTCE (7.2 Tg) from U.S.

landfills in 2020 (Exhibit 1-4). Landfill methane is the

only U.S. source that is expected to decline in the

baseline over the forecast period. This decline is due

to the implementation of the New Source Performance

Standards and Emissions Guidelines (the Landfill

Rule) under the Clean Air Act (March 1996). While

the Landfill Rule controls greenhouse gas emissions

that form tropospheric ozone (smog), it also will lead

to lower methane emissions. The Landfill Rule requires large landfills to collect and combust or use

landfill gas emissions.

Coal Mining. Methane is trapped within coal seams

and the surrounding rock strata and is released during

coal mining. Because methane is explosive in low

concentrations, underground mines install ventilation

systems to vent methane directly to the atmosphere. In

1994, coal mining produced 170 MMTCE (30 Tg) of

methane worldwide (IPCC, 1995). EPA estimates that

U.S. emissions from this source were 18.8 MMTCE

Exhibit 1-4: Baseline Methane Emissions in the United States (MMTCE)

Source 1990a 1997a 2000 2010 2020

Landfills 56.2 66.7 51.4 52.0 41.1

Natural Gas Systems 32.9 33.5 35.6 37.9 38.8

Oil Systems 1.6 1.6 1.6 1.6 1.7

Coal Mining 24.0 18.8 23.9 28.0 30.4

Livestock Manure Management 14.9 17.0 18.4 22.3 26.4

Enteric Fermentation 32.7 34.1 35.2 36.6 37.7

Otherb 7.3 7.4 7.8 7.6 7.6

Total 169.9 179.6 173.9 186.0 183.7

a Source: EPA, 1999.

b These estimates developed by EPA for the 1997 Climate Action Report (DOS, 1997).

Totals may not sum due to independent rounding.
1-6 U.S. Methane Emissions 1990-2020: Inventories, Projections, and Opportunities for Reductions

(3.3 Tg) in 1997 (EPA, 1999). EPA’s baseline estimate

indicates that emissions from coal mines could reach

30.4 MMTCE (5.3 Tg) by 2020 (Exhibit 1-4). The

increase results from greater coal production from

deep mines.

Domestic Sewage. The decomposition of domestic

sewage in anaerobic conditions produces methane.

Domestic sewage is not a major source of methane

emissions in the U.S., where it is collected and processed mainly in aerobic (oxygen rich) treatment plants.

In 1994, domestic sewage produced 145 MMTCE (25

Tg) of methane worldwide (IPCC, 1995). EPA estimates that emissions from sewage in the U.S. were 0.9

MMTCE (0.2 Tg) in 1997 and expects emissions to

increase only slightly by 2020 (EPA, 1999). This increase will be due primarily to population increases.

Livestock Manure Management. The decomposition of animal waste in anaerobic conditions produces

methane. Over the last eight years, methane emissions

from manure have generally followed an upward

trend. This trend is driven by: (1) increased swine and

poultry production; and (2) increased use of liquid

manure management systems, which create the anaerobic conditions conducive to methane production.

In 1994, manure management produced 145 MMTCE

(25 Tg) of methane worldwide (IPCC, 1995). EPA

estimates that U.S. emissions from this source were

17.0 MMTCE (3.0 Tg) in 1997 (EPA, 1999). Emissions from livestock manure in the baseline are projected to increase to 26.4 MMTCE (4.6 Tg) by 2020

(Exhibit 1-4) mainly due to increases in livestock

population and milk production.

3.0 Options for Reducing

Methane Emissions

One of the key elements of the U.S. Climate Change

Action Plan (CCAP) is the implementation of costeffective reductions of methane emissions through

voluntary industry actions.3

 Because methane is a

valuable energy resource, recovering methane that

normally would be emitted into the atmosphere and

using it for fuel reduces greenhouse gas emissions.

The methane saved from these voluntary actions often

pays for the costs of recovery and also can be costeffective even without accounting for the broader social benefits of reducing greenhouse gases (GHG).

Beginning in the early 1990s, EPA launched five voluntary programs to promote cost-effective methane

emission reductions:

3⁄4 AgSTAR Program – works with livestock

producers to encourage methane recovery

from animal waste;

3⁄4 Coalbed Methane Outreach Program (CMOP)

– works with the coal and natural gas industries to collect and use methane that is released during mining;

3⁄4 Landfill Methane Outreach Program (LMOP)

– works with states, municipalities, utilities,

and the landfill gas-to-energy industry to collect and use methane from landfills;

3⁄4 Natural Gas STAR Program – works with the

companies that produce, transmit, and distribute natural gas to reduce leaks and losses of

methane; and

3⁄4 Ruminant Livestock Efficiency Program

(RLEP) – works with livestock producers to

improve animal nutrition and management,

thereby boosting animal productivity and cutting methane emissions.

Under these voluntary programs, industry partners

voluntarily undertake cost-effective efforts to reduce methane emissions. EPA works with partners to quantify the results of their actions and

account for reductions in historical methane emission estimates. One of the principal benefits of

these voluntary programs is the sharing of information between government and industry and

within industry on emissions, and emission reduction opportunities and associated costs. These

programs have contributed significantly to EPA’s

understanding of the opportunities for emission

reductions.

Many of these opportunities involve the recovery of

methane emissions and use of the methane as fuel for

electricity generation, on-site heat uses, or off-site sales

of methane. These actions represent key opportunities

for reducing methane emissions from landfills, coal

mines, and livestock manure management. Other op-
U.S. Environmental Protection Agency – September 1999 Introduction 1-7

tions may include oxidizing or burning the methane

emissions. Catalytic oxidation is a new technology

potentially applicable at coal mines; flaring is an option available at landfills and other sites.

The natural gas industry offers the most robust array of

emission reduction options. The Natural Gas STAR

Program has identified a number of best management

practices for reducing leaks and avoiding venting of

methane. In addition, partners in the program have

employed a number of other strategies for reducing

emissions. These strategies are described in the chapter on natural gas systems.

Conversely, few technology-specific reduction options

have yet been identified for the ruminant livestock

industry, where methane production is a natural byproduct of enteric fermentation. The principal options

are improving the efficiency of feedlot operations and

animal feeds for ruminant livestock. Better feeds and

animal management can increase yields of meat and

dairy products relative to methane production.

A principal benefit of the various voluntary programs

is abundant information developed on the efficacy of

the emission reduction options and the costs of implementing these options. EPA uses this information to

estimate the costs of reducing emissions. Partners in

the various voluntary programs are already undertaking emission reduction efforts because they have been

found to be cost-effective. While some of the emission

reduction options are cost-effective in some settings,

they are not in others, e.g., methane recovery and use

may be more cost-effective at large coal mines and

landfills than at small ones. In the next section the

economics of decision making in the implementation

of reduction options is discussed.

4.0 Economic Analysis of

Reducing U.S. Methane

Emissions

This report presents the results of extensive benefitcost analyses conducted on the opportunities (technologies and management practices) to reduce methane emissions from four of the five major U.S.

sources: landfills, natural gas systems, coal mining,

and livestock manure. The analyses are conducted for

the years 2000, 2010, and 2020. EPA selected these

sources because well-characterized opportunities exist

for cost-effective emission reductions. The results are

in terms of abated methane (emission reductions) that

can be achieved at various values of methane. The

total value of methane is the sum of its value as a

source of energy and as an emission reduction of a

GHG.

Methane has a value as a source of energy since it is

the principal component of natural gas. Therefore,

avoided methane emissions in natural gas systems are

valued in terms of dollars per million British thermal

units ($/MMBtu). Similarly, methane also can be

combusted to generate electricity and is valued in dollars per kilowatt-hour ($/kWh). The value of potential

methane emission reductions is calculated relative to

carbon equivalent units using methane’s 100-year

global warming potential (GWP) of 21 (IPCC, 1996a).

The value of abated methane, as well as other GHGs,

can thus be stated in terms of dollars per metric ton of

carbon equivalent ($/TCE). Throughout the analysis,

energy market prices are aligned to $0/TCE. This

value represents a scenario where no additional price

signals from GHG abatement values exist to motivate

emission reductions; all reductions are due to responses to market prices for natural gas. As a value is

placed on GHG reductions in terms of $/TCE, these

values are added to energy market prices and allow for

additional emission reductions to clear the market.

A benefit-cost analysis is applied to the opportunities

for emission reductions and is defined as:

3⁄4 Benefits. Benefits are calculated from the

amount of methane saved by implementing the

options multiplied by the value of the methane

saved as its use as an energy resource; plus the

value of methane as an emission reduction of

a GHG, if available;

3⁄4 Costs (including capital expenditures and

operation and maintenance expenses). The

costs of implementing specific reduction options are estimated for four of the five major

anthropogenic sources. The applied discount

rates are particular to each source-specific
1-8 U.S. Methane Emissions 1990-2020: Inventories, Projections, and Opportunities for Reductions

analysis and set at eight percent for the aggregate analysis.4 In the source-specific analyses,

different discount rates are used to determine

cost-effective reductions.

Because nearly all of the technologies and practices for

reducing methane emissions produce or save energy,

energy prices are a key driver of the cost analyses. The

value of the energy produced or saved offsets to various degrees the capital and operating costs of reducing

the emissions. Higher energy prices offset a larger

portion of these costs, and in some cases make the

technologies and practices profitable. 5

In the source-specific analyses, energy market prices,

in 1996 U.S. dollars, are used to establish whether an

option is cost-effective. These prices are established

based on the following approaches:

3⁄4 For landfills, both electricity and natural gas

prices are used in the analysis since landfills

sell gas directly to consumers or use the recovered gas to generate electricity. For electricity prices, the analysis uses an estimated

price of $0.04/kWh to represent the value of

electricity close to distribution systems and

receiving a renewable energy premium. For

natural gas, the price used is $2.74/MMBtu.

In this case, the analysis uses the average industrial gas price discounted by 20 percent to

adjust for the lower Btu content of landfill gas

(EIA, 1997).

3⁄4 Coal mine methane is sold as natural gas to

interstate pipelines, used to generate electricity, or used on-site. For natural gas, coal mine

methane is valued at $2.53/MMBtu, which is

the average delivered price for natural gas in

Alabama, Indiana, Kentucky, and Ohio. The

electricity generated from coal mines is valued

at $0.03/kWh to reflect the greater distance

from distribution systems.

3⁄4 The set of energy prices for natural gas systems depends on where the emissions are reduced. Production emission reductions are

valued at the average wellhead price of

$2.17/MMBtu; transmission savings are valued at $2.27/MMBtu; and distribution system

savings are valued at $3.27/MMBtu (EIA,

1997).

3⁄4 Livestock manure methane is used to generate

electricity for farm use and offset electricity

consumption from a utility grid. The analysis

uses $0.09/kWh for dairy farms and

$0.07/kWh for swine farms. These prices are

weighted averages of retail commercial electricity rates based on dairy and swine populations, respectively. The national average price

was discounted by $0.02/kWh to reflect the

effects of interconnect and demand charges

and other associated costs.

In order to incorporate methane emission reduction

values into the analysis, various $/TCE values are

translated into equivalent electricity and gas prices

using the heat rate of the engine-generator (for electricity), the energy value of methane (1,000 Btu/cubic

foot), and a GWP of 21. See individual chapters for

greater detail.

5.0 Achievable Emission

Reductions and

Composite Marginal

Abatement Curve

The aggregate results of the analyses are presented in

this section. Exhibit 1-5 shows estimated total U.S.

reductions at various values for abated methane in

$/TCE. These reductions are the summation of

source-specific results where different discount rates

are applied to each source: 8 percent for landfills, 10

percent for livestock manure management, 15 percent

for coal mining, and 20 percent for natural gas systems. For 2010, EPA estimates that up to 34.8

MMTCE (6.1 Tg) of reductions are possible at energy

market prices or $0/TCE. Consequently, methane

emissions could be reduced below 1990 emissions of

169.9 MMTCE (29.7 Tg) if many of the identified

opportunities are thoroughly implemented. At higher

emission reduction values, more methane reductions

could be achieved. For example, EPA’s analysis indicates that with a value of $20/TCE for abated methane
U.S. Environmental Protection Agency – September 1999 Introduction 1-9

added to the energy market price, U.S. reductions

could reach 50.3 MMTCE (8.8 Tg) in 2010.

Exhibit 1-6 presents EPA’s aggregate U.S. methane

marginal abatement curve (MAC) for 2010 which is

calculated using a discount rate of eight percent

equally applied to all sources in order to properly construct the curve.4

 The MAC illustrates the amount of

reductions possible at various values for methane and

is derived by rank ordering individual opportunities by

cost per emission reduction amount (IPCC, 1996b).

Any point along a MAC represents the marginal cost

of abating an additional amount of methane. A complete picture is revealed when the prevailing market

prices for energy and GHG reductions are applied to

the MAC to show the amount of available emissions

that clear the market. Any “below-the-line” reduction

amounts, with respect to $0/TCE, illustrate this dual

price-signal market, i.e., energy market prices and

emission reduction values.

The MAC illustrates the following key findings. First,

substantial emission reductions, 36.8 MMTCE (6.4

Tg), can be cost-effectively achieved, that is, at energy

market prices with no additional emissions reduction

values or $0/TCE. Second, at $20/TCE and $50/TCE

Exhibit 1-6: Marginal Abatement Curve for U.S. Methane Emissions in 2010 (at an 8 percent discount rate)

($50)

$0

$50

$100

$150

$200

$250

0 10 20 30 40 50 60 70 80

Abate d M e thane (M M TCE)

V alue of Carbon Equivale nt (1996 $/TCE)

Incre as ing Ene rgy Price s 

($/M M Btu or $/k Wh)

Observed Data

Market Price

30 60 102

45

= − −MMTCE $/TCE e

Exhibit 1-5: U.S. Baseline Emissions and Potential Reductions (source-specific discount rates) (MMTCE)

Year

MMTCE

@ 21 GWP

Tg

CH4

115 20

10

5

86 15

57

29

0

143 25

172 30

2000 2010

Remaining Emissions

Cost-Effective Reductions

Baseline Emissions

2020

Emission Levels at

Different $/TCE

$0

$20

$100

$50

$200

1990

200 35

 2000 2010 2020

Baseline Emissions 173.9 186.0 183.7

Cumulative Reductions

at $0/TCE 30.8 34.8 35.0

at $10/TCE 36.4 42.3 40.9

at $20/TCE 41.7 50.3 47.4

at $30/TCE 54.6 61.7 58.7

at $40/TCE 56.2 63.5 61.0

at $50/TCE 59.5 66.9 64.8

at $75/TCE 64.3 71.9 70.7

at $100/TCE 67.2 74.9 74.0

at $125/TCE 68.4 76.2 75.5

at $150/TCE 68.7 76.5 75.9

at $175/TCE 69.0 76.8 76.2

at $200/TCE 69.2 77.0 76.5

Remaining Emissions 104.7 108.9 107.2
1-10 U.S. Methane Emissions 1990-2020: Inventories, Projections, and Opportunities for Reductions

estimated reductions are 52.6 MMTCE (9.2 Tg) and

70.0 MMTCE (12.2 Tg), respectively. Third, at

$100/TCE, achievable reductions are estimated at 75.5

MMTCE (13.2 Tg). Finally, above $100/TCE, the

MAC becomes inelastic, that is, non-responsive to

increasing methane values which indicates the limits of

the options considered. At higher energy and emission

reduction values, additional options, which have yet to

be developed, will likely become available. By not

estimating potential, future higher-cost options, this

analysis under-estimates the ability to reduce emissions at higher values for abated methane.

The MAC is based on approximately 160 observations. These results are from the benefit-cost analyses

conducted on the identified opportunities to abate

methane emissions.

An analytic approximation of the MAC is calculated in

order to make these results useful to larger economic

models concerned with GHG reduction costs. The

estimated relationship is obtained by using an exponential trendline, expressing the relationship between

methane values/abatement costs and the quantity of

abated methane.6

 This function is described as:

$/TCE = 30 exp [45/(102 – MMTCE)]-60.

Exhibit 1-7 illustrates the relative contribution of each

of the sources to reducing methane emissions. Of the

four sources, landfills contribute the most to the emission reductions, i.e., over one-quarter of the reductions.

Coal mining and natural gas systems each account for

about one-quarter of total emission reductions. Livestock manure contributes up to about one-fifth of the

reductions, primarily at higher energy prices and emission reduction values. Several key aspects of the

analysis are highlighted below:

3⁄4 The methane recovery efficiency at landfills is

estimated at 75 percent for all landfills and is

assumed to remain constant. Below $0/TCE,

using the recovered methane directly in boilers or similar equipment is more cost-effective

than producing electricity in most cases.

3⁄4 Because of the diverse sources of methane

emissions from natural gas systems, a large

number of technologies and practices are

evaluated. Among the options evaluated, replacing high-bleed pneumatic devices and

techniques for reducing emissions from compressor stations are the most significant in

terms of cost-effective emission reductions.

3⁄4 The coal mine methane analysis includes a

catalytic oxidation technology for recovering

heat energy from the low concentration of

methane in coal mine ventilation air. This

technology becomes profitable at approximately $30/TCE, leading to substantial emission reductions from underground mining.

Below this value, methane recovery is the

primary method of reducing emissions.

3⁄4 The principal methods for reducing methane

emissions from livestock manure are to collect

and combust the methane that would otherExhibit 1-7: Portion of Emission Reductions from Each Source in 2010 (at an 8 percent discount rate) (MMTCE)

60%

40%

20%

0

80%

100%

$20 $50

$/TCE

$0 $100

Percent of Total Reduction

Livestock Manure

Coal Mining

Natural Gas

Landfills

36.8 52.6 70.0 75.5 Total Reductions (MMTCE)
U.S. Environmental Protection Agency – September 1999 Introduction 1-11

wise be emitted from liquid manure management systems. Anaerobic digester technologies, the principal technology evaluated, produce multiple benefits, including odor reduction at swine farms as well as producing energy for on-farm use.

6.0 Significance of This

Analysis

To date, most economic analyses of GHG reduction

opportunities have focused on energy-related carbon

emissions since CO2 currently accounts for about 82

percent of the total U.S. emissions (weighted by 100-

year global warming potentials) (EPA, 1999). The

analyses provided in this report can be integrated with

CO2 economic analyses to provide a broader understanding of reducing the total cost of achieving GHG

emission reductions. Recent comprehensive studies by

the Joint Program on the Science and Policy of Global

Change, Massachusetts Institute of Technology (Reilly,

1999) and the Australian Bureau for Agricultural and

Resource Economics (Brown, 1999) show that a multigas mitigation strategy can reduce the costs of achieving GHG emission reductions. Both of these studies

utilized EPA’s preliminary cost analysis on methane

reductions (EPA, 1998).

The economic benefits of pursuing a mitigation strategy that includes methane is shown in Exhibit 1-8.

Illustrative MACs are presented for methane (CH4),

CO2, and for the summation of the two showing additional emission reductions with increases in $/TCE.

Given a reduction target, A*, for both gases, the total

cost of achieving that target is lower if available methane reductions are included than if only CO2 reductions are made. At increasing values for emission reductions, more costly CO2 reductions can be substituted by lower cost methane reductions, when available, thereby lowering the marginal cost, shown as the

movement from P to P, and decreasing the total cost

(the integral or area under the curve).

7.0 Background to This

Report

EPA’s first major report on methane appeared in 1993

as Anthropogenic Methane Emissions in the United

States, Estimates for 1990, Report to Congress

(1993a). This report was the first effort to increase

general knowledge about methane emissions by presenting a detailed and comprehensive treatment of the

sources of methane emissions as part of the effort to

quantify these emissions. Following this report, EPA

published Opportunities to Reduce Anthropogenic

Exhibit 1-8: Illustrative MACs for Methane and Carbon Dioxide

Abated GHG (MMTCE)

Value of Carbon Equivalent ($/TCE) 0

Energy Prices

CH4 CO2 Total

Market Price

P

P*

A*

 0
1-12 U.S. Methane Emissions 1990-2020: Inventories, Projections, and Opportunities for Reductions

Methane Emissions in the United States (EPA, 1993b).

For all major sources of methane emissions – landfills,

natural gas systems, coal mines, livestock manure, and

livestock enteric fermentation – this report described

the technologies available that could reduce emissions.

Using these technologies, the report estimated the

amount of emission reductions that would be technically feasible and the amount of emission reductions

that would be economically justified. The latter included taking into account the value of methane (as a

fuel) as well as a value for emission reductions.

Since the publication of these reports, EPA has sponsored additional work in the estimation of baseline

emissions and the costs of emission reductions. These

efforts include, for example, a 15-volume report on

Methane Emissions from Natural Gas Systems cosponsored with the Gas Research Institute (EPA/GRI,

1996).

The information from the various voluntary programs

in addition to other research was used extensively in

the EPA’s Costs of Reducing Methane Emissions in

the United States, Preliminary Report (EPA, 1998).

This report first developed the overall approach for

estimating the cost of emission reductions and was

reviewed by a number of industry and source experts.

Their subsequent recommendations as well as other

improvements have been incorporated into the current

document.
U.S. Environmental Protection Agency – September 1999 Introduction 1-13

8.0 References

Boden, T.A., D.P. Kaiser, R.J. Sepanski, and F.W. Stoss. 1994. Trends ’93: A Compendium of Data on Global

Change. World Data Center for Atmospheric Trace Gases, Carbon Dioxide Information Analysis Center, Environmental Sciences Division, Oak Ridge National Laboratory, Oak Ridge, TN, ORNL/CDIAC-65, ESD Publication No. 4195.

Brown, Stephen, Darren Kennedy, Cain Polidano, Kate Woffenden, Guy Jakeman, Brett Graham, Frank Jotzo, and

Brian S. Fisher. 1999. “Assessing the economic impacts of the Kyoto Protocol Implications of accounting for

the three major greenhouse gases.” Australian Bureau for Agricultural and Resource Economics (ABARE).

ABARE Research Report 99.6, Canberra, Australia, May 1999. (Available on the Internet at http://www.

abare.gov.au/pdf/RR99.6pdf.)

Dlugokencky, E.J., K.A. Masarie, P.M. Lang, and P.P. Tans. 1998. “Continuing Decline in the Growth Rate of the

Atmospheric Methane Burden,” Nature, v. 393, 4 June 1998.

DOE. 1998. Statement of Robert S. Kripowicz, Principal Deputy Assistant Secretary for Fossil Energy, U.S. Department of Energy Before the Subcommittee on Energy, Research, Development, Production, and Regulation,

U.S. Senate, Washington, DC, 21 May 1998.

DOS. 1997. Climate Action Report: 1997. Submission of the United States of America Under the United Nations

Framework Convention of Climate Change. Bureau of Oceans and International Environmental Scientific Affairs, Office of Global Climate Change, U.S. Department of State, Washington, DC, DOS 10496. (Available on

the Internet at http://www.state.gov/www/global/oes/97climate_report/index.html.)

EIA. 1997. Natural Gas Annual 1996. Office of Oil and Gas, Energy Information Administration, U.S. Department of Energy, Washington, DC, DOE/EIA-0540(96). (Available on the Internet at http://www.eia.doe.

gov/oil_gas/natural_gas/nat_frame.html.)

EIA. 1998. Annual Energy Outlook (AEO) 1998. Reference Case Forecast, Energy Information Administration,

U.S. Department of Energy, Washington, DC.

EPA. 1993a. Anthropogenic Methane Emissions in the United States: Estimates for 1990, Report to Congress,

Atmospheric Pollution Prevention Division, Office of Air and Radiation, U.S. Environmental Protection

Agency, Washington, DC, EPA 430-R-93-003. (Available on the Internet at http.//www.epa.gov/ghg

info/reports.htm.)

EPA. 1993b. Current and Future Methane Emissions from Natural Sources, Report to Congress. Atmospheric

Pollution Prevention Division, Office of Air and Radiation, U.S. Environmental Protection Agency, Washington, DC, EPA 430-R-93-011. (Available on the Internet at http://www.epa.gov/ghginfo/reports.htm.)

EPA. 1994. International Anthropogenic Methane Emissions: Estimates for 1990, Report to Congress. Atmospheric Pollution Prevention Division, Office of Air and Radiation, U.S. Environmental Protection Agency,

Washington, DC, EPA 230-R-93-010.

EPA. 1998. Costs of Reducing Methane Emissions in the United States, Preliminary Report, Draft. Methane and

Utilities Branch, Atmospheric Pollution Prevention Division, Office of Air and Radiation, U.S. Environmental

Protection Agency, Washington, DC.

EPA. 1999. Inventory of Greenhouse Gas Emissions and Sinks 1990-1997. Office of Policy, Planning, and

Evaluation, U.S. Environmental Protection Agency, Washington, DC; EPA 236-R-99-003. (Available on the

Internet at http://www.epa.gov/globalwarming/inventory/1999-inv.html.)
1-14 U.S. Methane Emissions 1990-2020: Inventories, Projections, and Opportunities for Reductions

EPA/GRI. 1996. Methane Emissions from the Natural Gas Industry, Volume 1: Executive Summary. Prepared by

M. Harrison, T. Shires, J. Wessels, and R. Cowgill, eds., Radian International LLC for National Risk Management Research Laboratory, Air Pollution Prevention and Control Division, U.S. Environmental Protection

Agency and Gas Research Institute, Research Triangle Park, NC, EPA-600-R-96-080a.

IPCC. 1990. Climate Change: The IPCC Scientific Assessment. Intergovernmental Panel on Climate Change

(IPCC), Cambridge University Press, Cambridge, United Kingdom.

IPCC. 1995. Climate Change 1994: Radiative Forcing of Climate Change. Intergovernmental Panel on Climate

Change (IPCC), Cambridge University Press, Cambridge, United Kingdom.

IPCC. 1996a. Climate Change 1995: The Science of Climate Change. Intergovernmental Panel on Climate

Change (IPCC), Cambridge University Press, Cambridge, United Kingdom.

IPCC. 1996b. Climate Change 1995: Economic and Social Dimension of Climate Change. Intergovernmental

Panel on Climate Change (IPCC), Cambridge University Press, Cambridge, United Kingdom.

Reilly, I., R.G. Prinn, J. Uarnisch, J. Fitzmaurice, H.D. Jacoby, D. Kickligher, P.H. Stone, A.P. Sokolov, and C.

Wang. 1999. Multi-Gas Assessment of the Kyoto Protocol, Report No. 45, MIT Joint Program on the Science

and Policy of Global Change, Boston, MA, January 1999. (Available on the Internet at

http://web.mit.edu/globalchange/www/rp145.html.)
U.S. Environmental Protection Agency – September 1999 Introduction 1-15

9.0 Explanatory Notes

 1 The enhanced greenhouse effect is the concept that the natural greenhouse effect has been enhanced by anthropogenic emissions of greenhouse gases. Increased concentrations of carbon dioxide, methane, and nitrous oxide,

CFCs, HFCs, PFCs, SF6, and other photochemically important gases caused by human activities such as fossil fuel

consumption, trap more infra-red radiation, thereby exerting a warming influence on climate. Exhibit 1-1, which

illustrates relative contributions to the enhanced greenhouse effect by gas, is based on the increase in atmospheric

concentrations at each gas between pre-industrial times and 1992. This exhibit does not include methane’s indirect

effect of tropospheric ozone and stratospheric water vapor production, which are estimated to be equivalent to

about 25 percent of the direct effects.

2

 Microbial communities in upper soils constitute a much smaller methane sink.

3

 The U.S. CCAP was initiated in 1993 and designed to reduce U.S. emissions of greenhouse gases. CCAP Programs promote actions that are both cost-effective for individual private sector participants as well as beneficial to

the environment.

4

 In the construction of a national or aggregate marginal abatement curve, a single discount rate is applied to all

sources in order to equally evaluate various options. Given a particular value for abated methane, all options up to

and including that value can be cost-effectively implemented. An eight percent discount rate, the lowest in the

range of the source-specific rates (8 to 20 percent), is used since it is closer to social discount rates employed in

national level analyses. The results from the single, eight percent discount rate analysis are slightly higher than the

results where source-specific discount rates are used because a lower discount rate reduces project costs enabling

additional reductions.

5

 The effects of energy price changes are analyzed only from the revenue side and do not consider effects to capital

and O&M expenses. Therefore, the projected methane reductions may be overestimated for increases and underestimated for decreases to energy prices.

6

 For the estimated relationship, $/TCE = 30 exp [45/(102 – MMTCE)] - 60, the regression analysis yielded an R2 of

0.95. Conversely, the relationship also can be expressed in standard economic terms as the quantity of abated

methane as a function of price ($/TCE): MMTCE = 102 – 45/ln [($/TCE+60)/30].

U.S. Environmental Protection Agency – September 1999 Appendix I I-1

Appendix I: Supporting Material for

Composite Marginal Abatement

Curve

This appendix presents the data EPA used to develop the composite marginal abatement curve (MAC). The first

section summarizes the incremental emissions reductions associated with each source, i.e., landfills, natural gas

systems, coal mining, and livestock manure. The second section presents the approach to fit an equation to the

MAC data.

I.1 Estimates for Composite Marginal Abatement Curve

This section presents estimates of the incremental emission reductions for each combination of carbon equivalent

value and methane source. Exhibit I-1 presents these estimates. The exhibit also includes the cumulative

emission reductions. These cumulative emission reductions form the composite MAC for 2010.

Value of

Carbon

Equivalent

$/TCE

Incremental

Reductions

(MMTCE)

Source

Cumulative

Reductions

(MMTCE)

($30.00) 0.29 Manure-Dairy 0.29

($30.00) 1.23 Manure-Swine 1.52

($23.72) 0.45 Natural Gas 1.98

($23.62) 0.23 Natural Gas 2.20

($23.24) 0.64 Natural Gas 2.85

($23.01) 0.12 Natural Gas 2.96

($22.95) 0.24 Natural Gas 3.20

($20.85) 0.32 Natural Gas 3.52

($20.00) 0.77 Manure-Dairy 4.29

($19.86) 0.33 Natural Gas 4.62

($19.77) 0.42 Natural Gas 5.04

($19.51) 0.87 Coal 5.91

($19.32) 1.63 Natural Gas 7.54

($19.18) 0.01 Natural Gas 7.55

($19.14) 0.79 Coal 8.34

($19.13) 0.59 Natural Gas 8.93

($18.96) 1.63 Coal 10.55

($18.87) 0.77 Coal 11.32

($18.69) 0.57 Coal 11.89

($18.42) 0.48 Coal 12.37

($16.86) 0.39 Natural Gas 12.76

($16.70) 0.43 Natural Gas 13.20

$16.41) 0.47 Coal 13.67

Value of

Carbon

Equivalent

$/TCE

Incremental

Reductions

(MMTCE)

Source

Cumulative

Reductions

(MMTCE)

($16.32) 0.25 Coal 13.91

($16.00) 0.98 Natural Gas 14.89

($15.74) 0.19 Natural Gas 15.08

($15.67) 0.09 Natural Gas 15.17

($15.11) 0.73 Natural Gas 15.89

($14.45) 0.05 Natural Gas 15.95

($14.41) 0.35 Natural Gas 16.30

($14.14) 0.41 Coal 16.71

($14.02) 0.14 Natural Gas 16.86

($13.41) 0.29 Coal 17.15

($12.17) 0.90 Natural Gas 18.04

($11.78) 0.31 Coal 18.35

($11.50) 0.26 Coal 18.61

($11.32) 0.41 Coal 19.02

($11.01) 0.20 Natural Gas 19.22

($10.65) 0.04 Natural Gas 19.27

($10.59) 0.16 Coal 19.43

($10.50) 0.42 Coal 19.84

($10.39) 0.65 Natural Gas 20.49

($10.28) 0.02 Natural Gas 20.52

($10.00) 0.62 Manure-Dairy 21.14

($9.51) 0.04 Natural Gas 21.18

($9.23) 0.19 Coal 21.37

Exhibit I-1: Composite Marginal Abatement Curve Schedule of Options for 2010
I-2 U.S. Methane Emissions 1990-2020: Inventories, Projections, and Opportunities for Reductions

Value of

Carbon

Equivalent

$/TCE

Incremental

Reductions

(MMTCE)

Source

Cumulative

Reductions

(MMTCE)

($9.16) 0.56 Natural Gas 21.93

($7.87) 0.47 Coal 22.40

($7.68) 0.38 Coal 22.78

($7.50) 0.39 Natural Gas 23.17

($6.92) 0.06 Natural Gas 23.24

($6.77) 0.33 Coal 23.57

($6.50) 0.09 Coal 23.66

($6.23) 0.22 Coal 23.88

($4.77) 0.34 Coal 24.21

($3.80) 0.01 Natural Gas 24.22

($3.23) 0.20 Coal 24.42

($2.50) 0.14 Coal 24.56

($1.61) 0.01 Natural Gas 24.57

($1.41) 0.17 Coal 24.74

($1.32) 0.07 Coal 24.81

($0.86) 0.27 Coal 25.07

($0.82) 0.60 Natural Gas 25.67

($0.59) 0.03 Coal 25.70

($0.05) 0.10 Coal 25.80

$0.00 0.50 Manure-Dairy 26.30

$0.00 10.55 Landfills 36.85

$0.41 0.06 Coal 36.91

$0.95 0.16 Coal 37.07

$1.05 0.07 Coal 37.13

$1.32 0.25 Coal 37.38

$2.05 0.15 Coal 37.53

$3.51 0.15 Natural Gas 37.68

$4.96 0.02 Coal 37.70

$5.23 0.24 Coal 37.94

$5.25 0.02 Natural Gas 37.96

$6.45 0.14 Natural Gas 38.10

$6.58 0.04 Natural Gas 38.14

$6.60 0.10 Natural Gas 38.24

$7.19 0.03 Natural Gas 38.27

$7.62 0.21 Natural Gas 38.47

$9.32 0.18 Coal 38.65

$9.59 0.03 Coal 38.68

$10.00 0.31 Manure-Dairy 39.00

$10.00 0.12 Manure-Swine 39.11

$10.00 3.89 Landfills 43.01

$11.23 0.03 Coal 43.04

$11.41 0.04 Coal 43.08

$11.69 0.07 Coal 43.14

$12.04 0.00 Natural Gas 43.14

$12.14 0.09 Coal 43.23

Value of

Carbon

Equivalent

$/TCE

Incremental

Reductions

(MMTCE)

Source

Cumulative

Reductions

(MMTCE)

$12.41 0.09 Coal 43.32

$12.78 0.11 Coal 43.43

$12.87 0.09 Coal 43.52

$14.32 0.03 Coal 43.55

$15.60 0.16 Coal 43.71

$16.23 0.07 Coal 43.78

$16.51 0.14 Coal 43.92

$16.78 0.11 Coal 44.03

$16.87 0.03 Coal 44.06

$17.51 0.09 Coal 44.15

$18.42 0.06 Coal 44.21

$18.71 0.06 Natural Gas 44.27

$18.84 0.35 Natural Gas 44.63

$18.84 0.22 Natural Gas 44.84

$19.06 0.14 Natural Gas 44.98

$19.69 0.06 Coal 45.04

$20.00 0.20 Manure-Dairy 45.24

$20.00 1.54 Manure-Swine 46.78

$20.00 5.79 Landfills 52.57

$21.14 0.04 Coal 52.62

$21.51 0.02 Coal 52.63

$22.87 0.07 Coal 52.70

$23.96 0.05 Coal 52.75

$24.51 0.03 Coal 52.77

$24.65 0.00 Natural Gas 52.77

$27.87 0.06 Coal 52.83

$29.70 6.28 Coal 59.10

$30.00 0.18 Manure-Dairy 59.28

$30.00 2.28 Manure-Swine 61.57

$30.00 1.22 Landfills 62.79

$31.59 0.51 Natural Gas 63.30

$35.52 0.77 Natural Gas 64.07

$35.52 0.00 Natural Gas 64.07

$38.14 0.87 Natural Gas 64.94

$38.60 0.42 Natural Gas 65.36

$39.77 0.00 Natural Gas 65.36

$40.00 0.16 Manure-Dairy 65.52

$40.00 1.45 Manure-Swine 66.97

$40.00 0.29 Landfills 67.26

$40.88 0.00 Natural Gas 67.26

$45.21 0.94 Natural Gas 68.20

$47.09 0.32 Natural Gas 68.52

$47.54 0.02 Natural Gas 68.54

$50.00 0.16 Manure-Dairy 68.70

$50.00 1.18 Manure-Swine 69.88

Exhibit I-1: Composite Marginal Abatement Curve Schedule of Options for 2010 (continued)
U.S. Environmental Protection Agency – September 1999 Appendix I I-3

Value of

Carbon

Equivalent

$/TCE

Incremental

Reductions

(MMTCE)

Source

Cumulative

Reductions

(MMTCE)

$50.00 0.11 Landfills 69.98

$52.10 0.67 Natural Gas 70.65

$56.12 0.56 Natural Gas 71.22

$65.77 0.00 Natural Gas 71.22

$75.00 0.42 Manure-Dairy 71.63

$75.00 2.77 Manure-Swine 74.40

$75.00 0.05 Landfills 74.45

$76.24 0.08 Natural Gas 74.53

$95.34 0.21 Natural Gas 74.74

$95.47 0.00 Natural Gas 74.74

$100.00 0.38 Manure-Dairy 75.12

$100.00 0.40 Manure-Swine 75.52

Value of

Carbon

Equivalent

$/TCE

Incremental

Reductions

(MMTCE)

Source

Cumulative

Reductions

(MMTCE)

$100.00 0.02 Landfills 75.54

$113.08 0.12 Natural Gas 75.66

$116.47 0.45 Natural Gas 76.10

$125.00 0.30 Manure-Dairy 76.41

$125.00 0.08 Manure-Swine 76.49

$140.29 0.01 Natural Gas 76.50

$150.00 0.27 Manure-Dairy 76.77

$166.22 0.03 Natural Gas 76.80

$175.00 0.23 Manure-Dairy 77.03

$188.35 0.07 Natural Gas 77.10

$200.00 0.19 Manure-Dairy 77.29

I.2 Equation for Composite Marginal Abatement Curve

The relationship between the additional value of carbon equivalent ($/TCE) and the cumulative emission

reductions, i.e., abated methane in MMTCE is shown in Exhibit II-2. The cumulative emission reductions

increases relatively slowly as a function of the value of carbon equivalent. As the cumulative emission reductions

reach about 75 MMTCE, the reduction plateau and cannot be further abated at higher $/TCE values. In order to

represent the steepness of the curve at values close to 75 MMTCE, EPA determined a best-fit curve based on the

data points. This equation is defined by:

y = parameter 1  exp [parameter 2 / (max – x)] offset

where:

y = additional value of carbon equivalent ($/TCE)

x = cumulative emission reductions (MMTCE)

parameter 1 , parameter 2 , offset, and max = determined parameters

All values of x, i.e., cumulative emission reductions, must be less than the value of max. This curve has the

property that as the x value increases to the value of max, the y value will tend to infinity, so the curve will

approximate the steep rise at the maximum x value.

EPA used the method of least squares to find the best fitting curve. This method estimates the parameters by

minimizing the mean square error (MSE), i.e., the average squared difference between the actual and fitted values

of y: MSE = (actual y fitted y)

2 / n, where n is the number of pairs, i.e., 159 pairs of abated methane and

additional value of carbon equivalent. The minimum MSE is 68.6. The fitted parameters are:

3⁄4 offset = 60

3⁄4 parameter1 = 30

3⁄4 parameter2 = 45

3⁄4 max = 102

Exhibit I-1: Composite Marginal Abatement Curve Schedule of Options for 2010 (continued)
I-4 U.S. Methane Emissions 1990-2020: Inventories, Projections, and Opportunities for Reductions

The resulting equation is given by:

y = 30  exp [45/(102-x)] - 60

The squared correlation coefficient (R squared) between the actual and predicted values of y is 0.95, showing a

reasonably good fit on a scale of zero to one, one being a perfect fit. Although the model was fitted using the

method of least squares, the optimum least squares solution for this problem is also the solution with the

maximum possible R squared. Exhibit II-2 presents the 159 data points and the fitted curve.

Exhibit II-2: Marginal Abatement Curve for U.S. Methane Emissions in 2010

($50)

$0

$50

$100

$150

$200

$250

0 10 20 30 40 50 60 70 80

A b ate d M e th an e (M M T C E)

V alu e o f C ar b o n Eq u ivale n t (1996 $/T C E)

In cr e as in g En e r g y Pr ice s 

($/M M Btu or $/k Wh)

Observed Data

Market Pric e

30 60 102

45

= − −MMTCE $/ TCE e