Interstate Pipelines | Exploration & Production

EL PASO / EPA MRR SUBPART W 

MEETING – MAY 5, 2010

MEETING ATTENDEES 

 EPA

 Ragan Tate, Office of General Counsel

 Roger Fernandez, Climate Change Division

 Akachi Imegwu, Climate Change Division

 ICF Consulting

 Sandy Seastream

 Reddal One, LLC

 Touche Howard 

 El Paso

 Fiji George

 Craig Bock

 Naomi Cortez
Interstate Pipelines | Exploration & Production

Proposed EPA MRR Subpart W 

El Paso Corporation 

May 5, 2010
Agenda

Introduction

Proposed Subpart W 

Summary of Recommendations and 

Conclusions

3
Premier Pipeline Franchise

4

 19% of total U.S. interstate pipeline mileage

 26 Bcf/d capacity (15% of total U.S.)

 19 Bcf/d throughput (30% of gas delivered to U.S. consumers)

 1st “GREEN” pipeline 

El Paso

Natural Gas

Mojave

Pipeline

Colorado

Interstate Gas Wyoming 

Interstate

Cheyenne 

Plains Pipeline

Tennessee

Gas Pipeline

Southern

Natural Gas

Elba Island

LNG

Florida Gas

Transmission (50%)

Ruby Pipeline 
El Paso Exploration & Production

Domestic

Central

 Primarily shale, coal seam, and 

tight-gas programs

 Low-risk repeatable plays

 1,211 Bcfe of proved reserves1

 100% drilling success rate2

 325 MMcfe/d of production3

1Proved reserves as of year-end 2008; includes proportionate share of FSOG

2Drilling success rate is YTD Q3 2009

3Production estimate for full-year 2009; Total company & Central include proportionate share of FSOG

Total Company

 Well-situated in key

U.S. basins

 Focused on 

unconventional and 

low-risk conventional 

programs

 More than 2.5 Tcfe 

proved reserves1

 ~85% natural gas

 ~755 MMcfe/d of 

production3

Western

 Primarily oil, coal seam and 

tight-gas programs

 Low-risk repeatable plays

 717 Bcfe of proved reserves1

 100% drilling success rate2

 150 MMcfe/d of production3

Gulf Coast

 Low- to medium-risk exploration

 Large acreage position

 553 Bcfe of proved reserves1

 80% drilling success rate2

 265 MMcfe/d of production3

5
Proposed EPA MRR Subpart W 
El Paso’s Fugitive Emissions Experience

Implemented Research Grade Leak Measurement 

Programs Dating Back to 1999 

Used Many Leak Detection Tools Including IR Camera

Conducted Leak Measurements With Hi-Flow Sampler, 

Vent Bags, and Meters

 Includes Both Third Party and In-House Measurements

Provides El Paso A Unique Understanding of What Will 

Be Required Under the MRR

7
Preliminary Assessment of El Paso 

Facilities Subject to Proposed Subpart W

8

1Preliminary estimate based on definition in proposed rule which includes liquids handling

2Gulf LNG Terminal under construction 

3All estimates based on methodologies used by El Paso in reporting to California Climate Action Registry

Count %

Scope 1 

Emissions3 

Pipeline Business Unit

Transmission Facilities 197 126

Underground Storage Facilities 11 9

Processing Facilities1 8 6

LNG Import Terminals2 2 2

E&P Business Unit

Basins 11 9

Onshore Fields 62 59

Processing Facilities 5 5

Gathering Pipeline Miles 2,400 2,400

95 98

Facility Type

Current 

Facility 

Profile

Facilities Subject to Sub W

65 90
EPA Subpart W Re-proposal

Positive changes from 2009 proposal

 Reduction in source categories for T&S

 Monitoring requirements less burdensome 

for T&S

 Certain improvements in methodologies

 Format of the rule well laid out 

9
Summary of Key Issues

MRR compliance date unreasonable

 Multiple recommendations

Onshore production definition is 

cumbersome

 Reporting at a “field level” with a 25,000 

MT/yr threshold

MRR provisions can be simplified and 

improved

Compliance costs are underestimated

10
MRR Compliance Date 
Compliance Date Concerns

Expected finalization of Subpart W by late 3Q 2010

Unlike EPA Gas Star program, this is a “compliance grade” 

mandatory regulatory program

 § 98.4(e)(1)

"I certify under penalty of law that I have personally examined, and am familiar with, the

statements and information submitted in this document and all its attachments. Based on my

inquiry of those individuals with primary responsibility for obtaining the information, I certify that

the statements and information are to the best of my knowledge and belief true, accurate, and

complete. I am aware that there are significant penalties for submitting false statements and

information or omitting required statements and information, including the possibility of fine or

imprisonment.’’

 Reports must assure compliance provisions are carried out to 

provide “reasonable assurance of compliance”

El Paso believes that MRR provisions with a start date of 

1/1/11 is too aggressive and will undermine quality of data 

reported

12
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Compliance Date Concerns (2)

Monitoring is complex

 Focus should be on adequate data for reasonable cost

Clarification on handling of pre-tested components

 Leaks detected are assumed throughout the year 

(original proposal) vs. repairing leaks prior to 

quantifying emissions (re-proposal) (75 FR 18623 

(04/12/2010))

Available expertise is currently very limited

 Good results require trained personnel

These limitations impact both safety and quality of data
Compliance Date Concerns (3)

Insufficient implementation time

 Applicability analysis based on industry factors & all 

sources

 Monitoring plan

 Inventory of components

 Internal procedures for resourcing → $ and 

FTEs/contractors

 Current resources tied up with Sub C & NN compliance 

 Transportation and scheduling issues

 Especially in natural gas pipelines

 To achieve reasonable assurance of compliance 

 Significant processes, policies, infrastructure and resources 

must be set up

 Safety Concerns

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Recommendations for 

Subpart W Compliance

Initial applicability analysis should be based on 

consistent screening methods/tools

 Industry estimation methodologies

 Exemption for facilities <10K combustion emissions

Option 1: Phased-in Approach 

 2012 reporting using combination of best available 

data and proposed MRR methods

 Reporting using final EPA methods for all facilities by 

2015

Option 2: Limiting Approach

 2012 reporting for facilities currently subject to MRR 

under Sub C & NN, followed by reporting of additional 

Sub W facilities by 2015

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Onshore Production “Facility” 

Definition
E&P Onshore “facility”

Basin level reporting essentially encompasses 

reporting 100% of emissions

 Table W-2 in Preamble shows 4% of "facilities" account 

for 81% of the emissions

 Clarification requested

 Coverage in terms of emissions and no. of facilities vs. 

cost

 Reasonable assurance of compliance

 Practicably enforceable?

Recommend defining a reporting area for 

onshore at production field level

 Comparable coverage with other sectors under Part 98

 Consistent with state regulatory structure

17
Basin vs. Field Reporting Level –

Cost vs. Coverage 

18

0

10

20

30

40

50

60

70

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Basin > 25K Field >25k Field >10k

# of Fields

% of Emissions

% of Emissions

# of Regulated 

Fields

$6MM

$3MM

$5MM
MRR Monitoring Provisions 
Compressor Unit Vents

MRR accounts for compressor mode – El Paso agrees 

highly accurate

However, measurement in all 3 modes for each unit is 

extremely difficult to accomplish

 Requires additional gas blowdown for each unit

 Very time consuming – must wait for modes to be 

switched

 Forcing engine to operate outside of normal conditions

 May result in non-representative data

 Results in operational issues and could impact customer 

demand

 Might require multiple visits to each site

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Compressor Unit Vents (2)

Different modes can be characterized without 

additional blow down events and disruption of 

operations

Measure unit vents in “as found” mode and 

develop emission factor for each mode; 

calculate emissions using operating hours 

21
Mandatory Use of IR Camera

IR camera has many benefits

Some drawbacks

 Expensive

 Not intrinsically safe

 Current expertise is limited

Many other effective methods available, both 

for vents and standard components

Does EPA feel the video from camera is 

critical documentation of leak survey?

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Standard Component Survey

Requires component counts

 Time consuming

 Unnecessary for leaker emission factor calculations

 Any unnecessary tasks distract from collecting 

accurate data

Allow for second option

 Use broad emission factor for standard facility 

components based on number of units (no leak 

survey or component count required)

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Storage Tanks

Thousands of tanks for E&P

 Insufficient no. of labs to handle volume

 Insufficient no. of contractors to complete sampling

 Compliance costs not taken into account – up to 

$1K per pressurized liquid sample

 El Paso is currently evaluating variability of 

liquid samples for recommendation of 

alternative monitoring methods

For Pipelines, direct measurements require 

substantial time and effort

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Compliance Cost Analysis
Projected Cost Impacts vs. EPA Estimates

Compliance costs are underestimated

El Paso will provide written comments

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Recommendations and 

Conclusions
Recommendations and Conclusions

1. Subpart W compliance to be based on phasedin or limiting reporting approaches for highest 

quality data

2. Consider proposed changes to Onshore 

Production “facility” definition and reporting level

3. Provide flexibility in monitoring methods 

4. Re-evaluate cost implications 

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Appendix
Recommendation for 

Subpart W Compliance

Option 1: Phased-in Approach 

 Combination of best available data and proposed MRR methods

2012 Report: 

 Base emissions for 75% of facilities on industry 

recognized methodologies (i.e., API Compendium, 

INGAA Guidelines, etc.)

 Remaining 25% of facilities on proposed M/R/R methods

2013 Report: 

 50% industry methodologies/50% based on proposed 

M/R/R

2014 Report:

 25% industry methodologies/75% proposed M/R/R

2015 Report:

 100% proposed M/R/R

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Recommendation for 

Subpart W Compliance (2) 

Option 2: Limiting Approach

 2012 reporting for facilities currently subject to MRR 

under Sub C & NN

 In 2013, emissions will be reported for 33% of 

additional facilities determined to be subject to MRR 

due to Subpart W emissions

 In 2014, emissions will be reported for 66% of 

additional facilities

 In 2015, emissions reported for 100% of facilities

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Recommendation for Standard 

Component Survey 

Option 2 – Broad Standard Component 

Emission Factor

 Leakage from Standard Components Small 

Compared to Vent Leakage (< 20%)

 Uncertainty of a Broad Facility Standard Component 

Factor Has a Small Effect on the Accuracy of Total 

Reported Emissions

 MRR Currently Proposes Leaker Emission Factors 

Which Have Their Own Uncertainty

 Broad Standard Component Emission Factor 

Previously Developed by EPA Past Study Data2 

2EPA, 7th Annual Natural Gas Star Implementation Workshop

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Thank You For Your Time