# Attachment L

Leaks

Environmental Defense Fund

Ramón Alvarez, Robert Harriss, David Lyon

### Oil and Natural Gas Sector Leaks

Peer Review Responses of Environmental Defense Fund

June 16, 2014

I. E XECUTIVE 

### S UMMARY

• Leaks are a critical source of methane and other po llutants . We recommend leaks be treated as a very high priority as EPA evaluates fu rther steps based on these White Papers. It is well-established that unintentional e missions of methane and VOCs from the oil and gas industry account for a substantial port ion of overall emissions. Moreover, recent and ongoing scientific examination - conduct ed across geographies and value chain segments, and with diverse methodologies - re inforces that leaks are widespread and indicates they are even more of a problem than previously understood. Robust action on leaks should be a foundational element of any co ncerted approach to reduce methane emissions from the oil and gas industry.

• Leaks tend to be concentrated within a limited subs et of “gross emitter” facilities and components . Many studies have demonstrated that there is a hi ghly skewed

distribution of leaks. This concentration of leaks within a small proportion of sources has been observed both among groups of components withi n a site as well as among groups of entire facilities. This “gross emitter” characte ristic of leaks is highly policy relevant, because it implies that comprehensive efforts to sc an sites and identify and mitigate gross emitters through well-designed leak detection and r epair (LDAR) programs can yield

substantial benefits.

• Comprehensive LDAR has broad-based benefits and can help reduce emissions from sources addressed in other White Papers. Although all five emission source categories EPA selected for analysis in its Oil and Natural Gas Sector Leaks White Paper 1 are important, leaks are unique in that they arise from not only traditional “equipment leaks” (e.g., valves, flanges), but also sources such as malfunctioning or poorly maintained compressors, pneumatic devices, s torage vessels, and other equipment. Comprehensive or “holistic” LDAR programs that enco mpass entire facilities can help identify and resolve all such sources of unintentio nal emissions, and not just the traditional leaks that are commonly the focus of re gulatory LDAR programs. We urge EPA to evaluate the cross-cutting nature of leaks, and the related, broad-based benefits of instituting holistic approaches to LDAR.

• Cost-effective approaches for holistic LDAR are ava ilable today, and are continuously improving . Optical gas imaging (OGI) cameras have rapidly ad vanced to the forefront of leak detection technology, primari ly because of the speed with which

1 EPA, Report for Oil and Natural Gas Sector Leaks ( April 2014) [hereinafter “White Paper”], available at http://www.epa.gov/airquality/oilandgas/pdfs/201404 15leaks.pdfE NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

2 these technologies can detect large leaks. Althoug h OGI cameras do not currently quantify leaks, detection is of primary importance since most leaks are cost effective to repair once detected. This is widely regarded as a state of the art approach that enables effective and highly efficient detection of leaks. As a result, the use of OGI-based LDAR programs on a voluntary basis is now common among l eading operators. OGI is also recognized as a permissible leak detection technolo gy in several state-level regulatory programs as well as EPA’s Greenhouse Gas Reporting Program (GHGRP), Subpart W. At the same time, new technologies are emerging to enable near-continuous monitoring of facility-wide emissions, creating future potenti al for even more cost-effective and reliable identification of gross emitters.



### II. Q UANTIFYING THE 

### P ROBLEM OF 

### M ETHANE AND 

### VOC L EAKS

The White Paper correctly identifies most of the le ading studies on the scale of leaks from oil and gas facilities. The reviewed literatur e indicates that leaks are not only a ubiquitous source of methane and other harmful pollutants, but may be the single largest emission category in the oil and gas sector. As the White Paper note s, EPA’s latest Annual Inventory estimates that potential emissions from certain leaks within the n atural gas production, processing, and transmission segments amounted to approximately 481 ,000 metric tons of methane in 2012. 2
Leaks from metering and regulating facilities in lo cal distribution systems – many of which can be remediated using LDAR approaches comparable to t hose used in upstream facilities – were estimated to contribute an additional 491,000 metri c tons of methane. 3 And as ICF’s Cost Curve Report notes, fugitive emissions from compressors a re a further very large source, projected to

reach over 1 million metric tons of methane in 2018

. 4

Taking together all sources of fugitive emissions f rom above-ground components in the natural gas supply chain, ICF found that leaks are the largest emissions category in the oil and gas segment. ICF estimated that, in 2018, leak emi ssions from these sources will reach nearly 2.3 million metric tons of methane, or 30% of all e missions from the oil and gas sector. 5 For this reason, minimizing or avoiding leaks from both new and existing sources is indispensable for reducing overall emissions from the oil and gas sec tor. Below, we critically evaluate the references cited in the White Paper, with particula r focus on distributional characteristics of leaks that have significant implications for control stra tegies and policy responses.

2 White Paper at 19, 22.

3 EPA, Inventory of U.S. Greenhouse Gas Emissions and Sink s: 1990-2012 , EPA 430-R-14-003 (April 2014 ),

available at http://www.epa.gov/climatechange/ghgemissions/usinv entoryreport/archive.html (“Annual Inventory”).

4 ICF International, Economic Analysis of Methane Emission Reduction Opp ortunities in the U.S. Onshore Oil and

Natural Gas Industries B-6 (March 2014) [hereinafter “ICF Cost Curve Repo rt”], available at http://www.edf.org/sites/default/files/methane_ cos t_curve_report.pdf . [the synthesis paper referecnes

5 Id. at 3-9.E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

3 

### A. Holistic Understanding of Leaks and LDAR

The White Paper well summarizes previous research o n the scale of equipment leaks, and discusses most of the major recent studies and repo rts that inform our understanding of this issue. However, the White Paper does not provide an integr ated synthesis of the lessons from this literature. Moreover, many of the studies presente d focus on the overall scale of leaks. Although an understanding of aggregate emissions at the national level is valuable to understanding the urgency of addressing leaks, effe ctive policy responses to leaks require a more granular understanding of the specific sources, cau ses, and characteristics of the emissions.

One limitation of the White Paper is that it assess es emissions from equipment leaks in

isolation from other emissions sources at the same facilities. This lens is unduly narrow, since LDAR to minimize emissions from equipment leaks can also be applied to controlling emissions from high-emitting pneumatic controllers and compre ssor seals, poorly maintained storage vessels, and other sources that are not always incl uded in conventional LDAR programs. 6 In evaluating further action on leaks, EPA should broa den its understanding of this emission category to broadly encompass all unintentional emi ssions from oil and gas facilities, including: (1) equipment that is designed or intended to opera te without emissions; or (2) sources with excess emissions beyond the level or range associat ed with well-functioning, routine operation. This expanded concept of leaks covers all emission sources which advanced LDAR programs are capable of addressing.

For this White Paper to fully evaluate the effectiv eness of LDAR programs, it should place greater focus on the total emissions from ind ividual sites within each of the industry segments, encompassing the broader definition of le aks described above. Although LDAR is not a panacea for oil and gas emissions, it is a vital component of any reasonably comprehensive emission minimization strategy. Appreciating and ac hieving the full value of LDAR requires an informed view of its utility in reducing a wide bre adth of emission sources.

Given that a complete evaluation of an LDAR strateg y must consider the entirety of emissions at sites where an emission survey is cond ucted - not just traditional equipment leaks - we believe EPA should give great weight to availabl e field measurement data that characterize a full range of oil and gas site emissions. These st udies include the Clearstone I and II reports on processing plant emissions; the Carbon Limits repor t on fugitive emissions at well sites, compressor stations, tank batteries, and processing plants; the Allen et al. study; and the Fort Worth study, 7 which included comprehensive measurements of compr essor, tank, and well pad fugitives.

6 Subpart VVa of EPA’s NSPS regulations, for example , requires LDAR for pumps, compressors, valves, connectors, and pressure relief devices. 40 CFR §§ 60.482-1a – 60.482-8a. LDAR is optional for compre ssor seal emissions, and does not appear to be required for s torage vessels, pneumatic controllers, or other equ ipment under Subpart VVa.

7 ERG and Sage Environmental Consulting, LP, City of Fort Worth Natural Gas Air Quality Study, F inal Report. (July 13, 2011) [hereinafter “Fort Worth Study”], available at http://fortworthtexas.gov/gaswells/default.aspx?id= 87074.E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

4 

### B. Distribution of Leaks

A major conclusion that emerges from evaluating emi ssions data at the site level is that most of the emissions are concentrated at a small p roportion of “gross emitter” facilities. 8 The White Paper generally describes this phenomenon, ci ting to the Carbon Limits study and the Clearstone I and II studies, but does not provide a quantitative assessment.

Both the City of Fort Worth Natural Gas Air Quality Study and Allen et al. provide extensive, site-wide emission data that confirms th e presence of gross emitters and allows for a clear depiction of the distribution of leak emissio ns. Figure 1 below presents site-wide emissions for natural gas production facilities from both of these studies.

Fig 1. Distribution of site-wide emissions at natural gas production sites in Allen et al.
(2013) and in the City of Fort Worth Natural Gas Ai r Quality Study (2011).

8 Skewed distributions of emissions are widely obser ved in studies of other sources in the oil and gas sector, including compressors and pneumatic devices. This phenomenon is described in our peer review comments on the White Papers evaluating these sources.E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

5 In these studies, the highest 20% of emitting sites account for 60-80% of total emissions from all sites; the lowest 50% of sites account for only 3-10% of total emissions. Although these studies did not provide a definitive explanation fo r this distribution, these results – and other studies finding that leak emissions are highly conc entrated — suggest that an effective emission reduction strategy is to frequently conduct leak su rveys to identify the highest emitting sites and

address sources at those sites.



### C. Characterization of Studies and Data Sources Qua ntifying Emissions (Question 1)

The White Paper generally does a good job of summar izing previous work, but does not provide an effective synthesis or critical comparis on of the recent studies on leak emissions. As EPA evaluates further action in this area, we recom mend that EPA compare the results from each study using a common metric (in addition to whateve r units the referenced study uses, should there be a difference). Below, we offer detailed c omments on the summaries of leak studies that are presented in section 2 of the White Paper.

1. White Paper Section 2.1

The White Paper notes that EPA’s correlation equati ons for petroleum refineries, which allow for component emission rates to be estimated based on organic compound concentrations measured using Method 21, are designed to estimate total organic compound (TOC) emissions. For oil and gas sector facilities, TOC is of limite d utility unless gas composition data is available to estimate the fraction of methane, VOCs, and othe r pollutants in the emissions stream.

2. White Paper Section 2.2

In describing the use of GRI data to extrapolate na tional emissions from leaks, the White Paper appears to misstate the method used. The Whi te Paper notes that facility-level emissions were extrapolated to a national level using a count of production facilities, but in fact this method was used for facilities in all segments and not jus t production.

3. White Paper Section 2.5

The summary omits the Allen study’s national estima te of emissions from equipment leaks in the natural gas production segment, which is 15.1 bcf/yr or 291,000 metric tons. This value is 38 to 69% higher than comparable net emiss ions in the EPA GHG inventory. 9 Note that this estimate does not include leaks from compresso rs and other equipment not directly measured in the Allen study.

The White Paper also overlooks that the data from t he four sites with separators and other equipment did not include wells and was not include d in the averaging - the total data set for equipment leaks was 146 sites with a total of 478 w ells.

9 David T. Allen et al., Measurements of methane emissions at natura l gas production sites in the United States, 110 Proceedings of the National Academy of Sciences 177 68, 17771 (Oct. 29, 2013).E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

6 The summary correctly states that the Allen study v alues for average leak emissions are comparable to the average values for potential emissions for certain equipment types. The implications of this result are not fully described in the White Paper. Specifically, the Allen study values are more usefully compared to net or “actual” emission factors, in light of EPA's approach of applying regulatory and voluntary reduc tions to the potential emissions in order to arrive at net emissions. The Allen study at Sectio n S2.2 concludes that net emissions for comparable equipment types in the Annual Inventory are "roughly half to two-thirds of the emissions measured in this work" (the differing val ues depend on how compressors are included). In other words, results from the study suggest that the EPA Annual Inventory underestimates actual emissions for certain equipme nt leaks.

The summary should indicate that the Allen study al so reports measurements from 124

tank leaks that were detected with an IR camera. Th ese results appear in the study database posted on the University of Texas study website. Ho wever, the results are not discussed in the published paper because not all tank emissions were quantified.

4. White Paper Section 2.6

Numerous pneumatic controllers and tanks are includ ed in the "other" emission category reported in this study. Because emissions from thes e sources have a distinct profile from other fugitive emission sources, it is important to disti nguish these sources when utilizing the Fort

Worth data.

An aspect of this study that is not discussed is th e distribution of emissions from the sampled population of well sites, which is presente d in Figure 1 above. Alvarez et al. (2012) report that 10% of the surveyed well sites in the C ity of Fort Worth Study accounted for nearly

70% of total emissions. 10

5. White Paper Section 2.10

The third paragraph's characterization of the ICF r eport's treatment of well site emissions

is incorrect. ICF does not estimate total leak emi ssions from well sites, only wellheads. ICF at section B.3.1.2 developed its own wellhead fugitive emission factor by drawing from data in the Allen study. Specifically, ICF used reported measu rements from the Allen study for “any identifiable well head emissions (i.e., emissions f rom the well itself, not the associated equipment).” ICF then derived an overall per well emission factor from the Allen study by aggregating the measured emissions and dividing by the well count.

The next paragraph in the summary correctly describ es how other equipment leaks were handled. ICF used 1996 GRI values for Heaters, Se parators, Dehydrators, and Meters/Piping; the data from the Allen study were not used for the se sources. 11

10 Ramón Álvarez et al., Greater focus needed on methane leakage from natura l gas infrastructure, 109 Proceedings of the National Academy of Sciences 6435, 6437 (201 2).

11 ICF Cost Curve Report, supra note 4, at section B-4.E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

7 6. White Paper Section 2.12

The White Paper correctly notes that the Clearstone II study observed a highly skewed distribution of emissions, which is an important re sult and is consistent with the other data

described above.



### D. Applicability of Estimation Methods (Question 3)

The procedures for quantifying leaks that are prese nted in the White Paper are generally applicable to oil and gas facilities at various sta ges of the value chain. However, there are some practical considerations that may limit the applica bility of direct emission measurement in certain instances. In particular, the use of Hi-Fl ow to quantify emissions from leaks at production sites with rich gas (high VOC content) c ould be affected by the VOC content in gas.

This effect was noted in Modrak et al. for certain measurements of tank emissions (see Fi gure 3 therein). 12 In addition, some sources may not be accessible f or direct measurement with HiFlow without a lift or scaffolding. This was a major re ason for the exclusion of tank measurements in the Allen study: elevated tank vents were not reach able.



### E. Ongoing or Planned Studies That Will Provide Sup plemental Information (Question 4)

Colorado State University and Carnegie Mellon Unive rsity are leading two studies designed to characterize methane emissions from spe cific natural gas industry segments: one focuses on transmission and storage, and the other on gathering and processing. Both are part of the research series catalyzed by EDF and are being done in partnership with natural gas operators. Both studies will report emission measu rements taken at representative facilities and are on track to submit papers for publication in pe er-reviewed scientific journals by late summer

2014.

Another project sponsored by EDF that focuses on em issions from oil and gas operations in the Barnett Shale will result in facility-level emission data for a modest sample of production well pads, and a more limited number of midstream a nd transmission facilities in the area. For well pads, preliminary data from this project are c onsistent with the results of the City of Worth study, showing that a relatively small proportion o f well sites produce a large share of the total emissions from the sampled population. Papers summ arizing the results of this work should be submitted for publication in peer-reviewed scientif ic journals by late 2014.



### F. Factors Driving Variable Emissions (Question 5)

As yet, we have not been able to identify specific facility characteristics or operating parameters that are associated with high leak emiss ions (one exception might be for equipment in compressor service vs non-compressor service due to the vibrational/mechanical stresses places

12 Modrak, Mark T., et al. 2012. Understanding Direct Emissions Measurement Approach es for Upstream Oil and Gas Production Operations. Air and Waste Management Association 105th Annual C onference and Exhibition, June 19-22, 2012 in San Antonio, Texas.E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

8 on the equipment in compressor service). 13 Rather, gross emitters appear to be due to random occurrences of low-probability but high-emission co nditions, such as maintenance issues and serious malfunctions. The apparently random nature of high leak emissions underscores the utility of frequent LDAR programs conducted expansi vely at oil and gas facilities at each stage

of the value chain.



### III. U NDERSTANDING 

### L ANDSCAPE OF 

### D ETECTION 

### T ECHNOLOGY AND 

### I TS


### A PPLICATIONS

The White Paper effectively identifies and describe s the main categories of leak detection technologies. In this short Section, we: (i) briefl y summarize the advantages and disadvantages of OGI, cavity ring-down spectrometers, and handhel d organic vapor analyzers and toxic vapor analyzers (question 7) (ii) comment on the prevalen ce of technology use at upstream facilities (question 8), and (iii) comment on the state of inn ovation in leak detection technologies (question 13).



### A. Advantages and Disadvantages of Major Leak Detectio n Technologies

To supplement the discussion in the White Paper, we have provided in Table 1 below a qualitative assessment of the advantages and disadv antages of the major leak detection technologies evaluated in the White Paper. As Tabl e 1 shows, each technology carries its own balance of capital costs, labor requirements, sensi tivity, and quantification capability.

Table 1. Pros and Cons of OGI, Portable Analyzers, and Other Technologies.

Pros Cons Optical Gas Imaging • Proven technology already seeing extensive voluntary industry use

• Enables rapid/efficient

assessments which lowers labor intensity and cost

• Capital cost can be spread over many facilities

• Suitability for site-level assessments, including physically inaccessible

components • Relatively high capital cost

• Lack of quantification

Portable • Relatively low capital cost • Relatively time-intensive

13 See Fort Worth Study, supra note 6, at 3-34 (noting that total organic compound emissions from well pads with compressors were nearly 50% higher than at well pad s without compressors, counting only sources measur ed with a HiFlow sampler).E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

9 Analyzer • Long track record of regulatory use through

Method 21 assessments

• Labor intensive – high operating cost

• Cannot analyze emissions at physically inaccessible

components

Laser absorption
spectroscopy • Capable of high accuracy and precision • Minimal track record for corporate LDAR

• Generally high capital cost

Acoustic

methods • Questionable accuracy and reliability

• Capital cost believed to be high

In addition to the characteristics highlighted in T able 1, certain challenges – for example dealing with adverse precipitation or wind conditio ns – are common to all of the individual technologies above.



### B. Penetration Rate

Although EDF agrees with the White Paper that there is little quantitative data on the prevalence of OGI cameras in the oil and gas indust ry, our interactions with industry operators and other experts confirms that OGI technology has clearly emerged as the technology of choice for voluntary industry use. For example, at an invi tation-only technology workshop EDF held in 2013, there was widespread consensus among the four leading industry players – who span production, gathering, and processing – that OGI pr ovides a reliable and proven means of detecting leaks. Moreover, during the industry dial ogue phase of the ICF report preparation, OGI was uniformly validated as the best available pract ical means for efficient detection of leaks. Further, publicly available information indicates t hat leading companies such as Shell, Anadarko Petroleum Corporation, and Noble Energy are volunta rily utilizing infrared cameras for leak detection and repair purposes. The commercial tract ion achieved by OGI cameras is the strongest testament to their capability for reliable and effi cient leak detection. Increasing voluntary uptake – in the competitive and cost conscious oil and gas industry – is highly indicative of

effectiveness.

In parallel with rising voluntary use of OGI, OGI cameras are also increasingly being integrated into regulatory programs. Three states – Colorado, Ohio, and Wyoming – have recently adopted LDAR requirements for oil and gas facilities that allow the use of OGI cameras as a means of compliance. 14 Since 2011, Subpart W of EPA’s Greenhouse Gas Rep orting Program has also allowed the use of OGI cameras to detect leaking components at above-ground

14 Co. Dep’t of Pub. Health & Env’t Reg. No. 7 (5 CCR 1001-9), Unofficial Draft (Feb. 23, 2014) § XVII.F .; Ohio Envtl. Prot. Agency, General Permit 12.1(C)(5)(c)(2 ), 12.2(C)(5)(c)(2); Wyo. Dep’t of Envtl. Quality, Oil and Gas Production Facilities: Chapter 6 Section 2 Permitti ng Guidance (June 1997, Revised Sept. 2013).E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

10 facilities in natural gas processing, transmission, storage, and distribution, as well as LNG import/export facilities. 15



### C. Innovation in Leak Detection

Although OGI and other leak detection technologies are currently feasible and costeffective for a wide variety of oil and gas facilit ies, significant innovation continues to occur in the area of leak detection technology. As public a nd industry consciousness of fugitive emissions rises, and new policies have emerged to a ddress leak emissions, demand is growing for ever more effective and economical monitoring a pproaches. This demand signal is increasing at the same time that on the technology supply side , we see a growth in cost-effective sensing technology, and more interest and capability in min ing “big data” to generate actionable information to improve environmental and business p erformance.

Since the publication of the White Paper, The Dep artment of Energy’s ARPA-E program announced its MONITOR initiative to catalyze develo pment of low cost, efficiently deployed methane sensing technology. This project is complem entary to EDF’s Methane Detectors Challenge, which EPA noted in the White Paper.

Both projects are synergistic in helping to spur new technological solutions to
reduce methane emissions from the production and tr ansportation of oil and gas. EDF’s
competition targets relatively mature technologies that can be deployed in the next two years to
detect larger leaks on a continuous basis. In contr ast, ARPA-E’s program targets a wider range
of early-stage technologies that – with significant R&D — could become disruptive technologies
capable of detecting a broad range of leak sizes in the next ten years. These projects complement
each other in that both are expected to stimulate t echnology demonstration and development,
build market demand for new detection approaches, a nd ultimately catalyze major emission
reductions that will benefit the environment, publi c health and maximize resource utilization.
Table 2 explains how the EDF and ARPA-E programs co mpare.

Table 2. Comparison of ARPA-E and EDF Methane Dete ction Initiatives.

EDF Methane Detectors Challenge ARPA-E MONITOR Program

Industry applicability Focused on emissions from well pads

and associated equipment, and

compressors Focused on oil and gas systems from

the wellhead to the end-user

Technology
stage Relatively mature technologies ready

for testing in a controlled environment, and able to be deployed in industrial settings in the short run Early stage technologies requiring

substantial time and resources for development to ensure reliable

detection for transformational improvements

15 EPA, Greenhouse Gas Reporting Program (GHGRP), Sub part W, available at http://www.epa.gov/ghgreporting/reporters/subpart/w .htmlE NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

11 Scope of

detection Limited to continuous detection

technologies, that provide a 24/7 approach to detecting leaks Open to continuous or periodic/mobile approaches to detecting emissions

Leak size Focused on large leaks; initial basic

requirements of 5 and 2.5 scfm for detection, with preference for adaptive technologies and potential to detect

somewhat smaller leaks Focused on a wide range of emissions including small leaks;

threshold of 0.1 scfm

Information provided Notification of methane emissions,

including rough indication of leak size; leak location not required Reasonably accurate quantification of methane emissions, in addition to leak location down to 1m precision

Timeline Full proposals due June 17,2014;

testing begins summer 2014; industry pilots expected in 2015 Concept papers due June 13, 2014, Full application deadline TBD

Funding type Independent testing paid for by EDF;

industry pilot purchases expected; no development awards anticipated Up to $30M provided for development of the technology, in increments between $250,000 and $10M per awardee

Market

access Many of the participating companies

intend to make pilot purchases and trial deployments of instruments that meet the specifications Not applicable

Partnership EDF partnering with five leading oil

and gas producers ARPA-E partnering directly with innovators to help them develop their technologies; no industry partnership planned at this time

As innovation continues in this space, it is likely that different technologies or approaches will emerge to address unique challenges in each se gment of the natural gas supply chain. Midstream companies, for example, are testing airborne remote sensing technologies. Local distribution companies are exploring technologies t hat will measure, for the first time, quantitative leak rates from below ground leaks.

Nevertheless, the sheer number of new technologie s that are in development bodes well for significant cross-cutting improvements in the e fficacy and cost of leak detection. As an illustrative list, EDF incorporates here the most p romising technology development areas that

ARPA-E has identified:E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

12 • Reduced-cost tunable diode laser systems that incor porate either an internal absorption path or an external absorption path;

• Reduced-cost long-path spectroscopic approaches whi ch are configured to provide sensing along one side or potentially around the en tire perimeter of a site of interest;

• Hyperspectral approaches with an ambient thermal ra diation infrared source;

• Absorption approaches in which the sun or sky provi de the reference source;

• Low-cost approaches to mid-infrared (IR) detectors, particularly uncooled detectors;

• Reduced cost and/or increased resolution methane im aging systems, particularly with non-cryogenic detectors;

• Single-point sensors or imaging systems using plasm onic detectors, with particular interest in uncooled plasmonic detectors;

• LIDAR or laser backscatter approaches;

• Mobile sensing from dedicated and non-dedicated gro und vehicles and aerial vehicles;

• Low-cost approaches to mid-IR lasers, including qua ntum cascade lasers (QCLs), intersub-band gap lasers (ISBs), vertical cavity su rface emission lasers (VCSELs), or other novel/emerging concepts;

• Advanced data analytics that aggregate localized me thane measurement with wider area atmospheric and dispersion models in order to estim ate regional flux rates, including, but not limited to: 1) GIS integration, 2) reinforcemen t learning, 3) inversion modeling, 4) micro-climate modeling, and 5) site flux apportionm ent.

For EPA, continued innovation in leak detection tec hnology has two major implications. First, as with other new pollution control technolo gies, it is likely that relatively recent

innovations such as OGI cameras will continue to de cline in cost and improve in performance as their production and use increases. Second, it is important that policy frameworks to minimize leaks be flexible enough to encourage and recognize future developments in leak detection technology, and not erect undue barriers to using n ew and better technologies as they are developed.



### IV. E VALUATING 

### D ETECTION 

### S TRATEGIES AND 

### E CONOMICS

This Part builds from the discussion of leak detect ion technologies in Part III of our comments by addressing strategies to reduce emissio ns and the cost and effectiveness of those strategies. Detecting leaks is, of course, a criti cal piece of a strategy to reduce leaking emissions

, but, as the White Paper notes, it is only part of a strategy that must also include repair. Moreover, within each of these two components – lea k detection and repair – there are several

factors that influence both the effectiveness and t he cost of different leak detection and repair strategies. The White Paper focuses specifically o n the impacts of technology, but the scope of detection and repair practices and the frequency or timing of those practices are also important

determinants of effectiveness and cost. Table 3 be low sets forth illustrative options in each of

these areas that affect both the cost and effective ness of a LDAR program.E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

13 Table 3. Factors Influencing Effectiveness and Cost of LDAR Programs. 16

Technology Scope Frequency/Timing

Leak Detection Examples: Method 21;

IR Cameras; or Mobile

CRDS Examples: Componentspecific; Site-wide Examples: Monthly; Quarterly

Repair Examples: Standard

repair; use low-leak technology Examples: All leaking components; emission threshold; or economic

threshold Examples: Repair after 5 days

ICF’s cost curve report includes a rigorous assessm ent of LDAR programs that underscores their wide applicability, efficacy in r educing emissions, and high degree of cost effectiveness. Table 4 excerpts the ICF report’s hi gh level findings on LDAR opportunities across the supply chain (not including for the dist ribution segment). For this analysis, ICF assumed the use of quarterly LDAR utilizing OGI tec hnology, applied to entire facilities. Consistent with analyses undertaken by EPA and Colo rado, ICF assumed this technique would

have a 60% control effectiveness. ICF found that L DAR would reduce emissions by over 50 billion cubic feet per year, at a net annual cost o f under $50 million. This equates to a more than 10% reduction of total onshore projected methane em issions for 2018, at a net cost that is roughly 0.01% of the oil and gas industry’s annual capital expenditure.

Table 4. ICF Findings Regarding Costs and Effectiv eness of Comprehensive LDAR.

Value Chain Segment Total annual cost ($Million) Reduction achievable (Bcf) Well Fugitives 43.9 12.5
Gathering and Boosting

Stations 5 3.3
Compressor Stations (Storage) -4.5 1.5

Compressor Stations (Transmission) 7.7 2.8
Reciprocating Compressor Fugitives -10.5 32.3

Total 41.6 52.4

Below, we address several aspects of leak detection efficacy and cost-effectiveness in more detail. Part IV.A explores technology conside rations relevant to the effectiveness of leak

16 It is believed that an additional factor influenci ng effectiveness of LDAR is proper training and inc enting of personnel carrying out the in-field activities, be they employees or contractors. We encourage EPA to take account of the human factors that may influence environment al performance.E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

14 detection and repair strategies. In particular, we concur with the White Paper’s conclusion that IR cameras and mobile monitoring can reduce leak de tection costs while effectively detecting major leaks. On the repair side, we present eviden ce, not included in the White Paper, that repairing leaks with low-leak technology can furthe r reduce emissions without markedly increasing costs. Part IV.B addresses the scope o f leak detection surveys and repair efforts, concluding that performing site-wide surveys (inclu ding components like pneumatics and compressors) is important for optimizing emissions reductions and has minimal cost impacts given economies of scale. Part IV.C discusses freq uency of surveys, and Part IV.D analyzes two-step LDAR, a specific strategy on which the Whi te Paper requests comment.



### A. Technologies: Implications for Cost / Effectiven ess

EPA’s White Paper presents capital costs associated with different leak detection technologies, and we agree that these costs seem ap propriate. Importantly, however, leak

detection devices can be used to search for leaks a t multiple sites, and so attributing the full cost of detection equipment to a single site grossly ove rstates costs. In its Oil Well Completion White Paper, EPA recognizes that flare technology can be used at multiple well-sites and that costs should be adjusted accordingly. 17 We encourage EPA to similarly adjust capital costs for leak detection equipment (and where appropriate, other i nitial or start-up costs) to reflect that this equipment can be deployed at multiple well sites. 18

This point is relevant to a broader consideration r egarding both cost and effectiveness –

that both should be assessed in terms of the leak d etection and repair strategy as a whole. Technology choice and its impacts on survey speed a re a larger cost driver than capital costs for overall LDAR strategies, and below, we assess oppor tunities to reduce costs with IR cameras and whether those devices materially impact survey effe ctiveness. We also assess the efficacy of low-leak repair technologies.

1. Leak Detection – Speed & Effectiveness of IR Cam eras

Survey speed is an important driver of the overall cost of LDAR, and we believe that available technologies allow operators to survey fa cilities more quickly and with similar effectiveness to Method 21 using portable analyzers . The discussion below focuses on IR cameras (2-step LDAR is discussed separately) and t he cost and effectiveness implications of this technology.

17 EPA, Report for Oil and Natural Gas Sector Oil Wel l Completions and Associated Gas during Ongoing Production 32 (April 2014), available at http://www.epa.gov/airquality/oilandgas/pdfs/201404 15completions.pdf

.

18 In past analyses of LDAR cost-effectiveness , EPA does not appear to have assumed that leak detection equipment costs or other start-up costs (such as the acquisit ion of data collection systems) could be shared amo ng multiple

sites. See EPA, Oil and Natural Gas Sector: Standards of Perfo rmance for Crude Oil and Natural Gas Production, Transmission, and Distribution, Background Suppleme ntal Technical Support Document for the Final New S ource Performance Standards at C-4 (2012).E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

15 EPA’s White Paper notes that IR technology can redu ce the time it takes to survey a facility for leaks and presents a number of estimat es of survey time from different studies and

literature. 19

Table 5. White Paper Studies Identifying OGI Surve y Speed.

Study Survey Speed (components / hr) RTI (2012) 1,875 ICF (2003) 2,100

Although the White Paper asserts that these studies underestimate the amount of time required for OGI surveys, 20 additional studies corroborate the estimates in Ta ble 5 and, indeed, suggest they may even overstate the time needed to survey facilities. For instance, a 2007 technical paper in the Journal of Air & Waste Manag ement (“Robinson study”) found that an IR Camera was able to survey 27,000 components in a re finery during a 13 hour period (2,100 components per hour). 21 Moreover, the study authors noted that “[t]his mon itoring does not represent a typical or anticipated maximum rate whe n using optical leak imaging as an alternative to Method 21” because “[s]ignificant ti me was spent collecting data and allowing participants to view the leaks.” ICF’s 2014 cost cu rve report also concludes that EPA’s projected screening times are potentially too long. 22 Even assuming a longer screening time, IR cameras provide an opportunity for dramatically faster samp ling when compared to Method 21 (700 components per day).

While IR cameras can significantly improve screenin g time, it is critical that the technology screens leaks as effectively as Method 2 1 using an OVA / TVA. EPA’s White Paper discusses potential difficulties with IR screening (temperature, wind, etc.) that may make screening potentially less accurate using these dev ices. 23 However, the quantitative comparisons that exist indicate that OGI is comparable to Metho d 21 in reliably detecting major leaks. The Robinson study, for example, found that an IR camer a was able to “identify leaking components

that were the source of 97% of the total mass emiss ions from leaks detected [using Method 21].” 24

Further, the Fort Worth study data allows for a dir ect comparison of Method 21 and OGI effectiveness. This study measured emissions at 38 8 natural gas sites in the Barnett Shale

19 See White Paper at 40.

20 Id

.

21 Donald R. Robinson et al. , Refinery Evaluation of Optical Imaging to Locate Fugitive Emissions, 57 J OURNAL OF

THE A IR & W ASTE M ANAGEMENT A SSOCIATION 803-810 (2007).

22 ICF Cost Curve Report, supra note 4 at 3-11.

23 White Paper at 41.

24 Robinson study at 803.E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

16 region. Component leaks were surveyed with a combi nation of Method 21 and OGI, followed by direct measurements and modeling to quantify emi ssions. Method 21 identified 2,093 components above a 500 ppm total hydrocarbon screen ing threshold that contributed 97% of total emissions, while OGI 1,330 identified compone nts with visible emissions that contributed 94% of total emissions. Components detected by Met hod 21 but not OGI tended to have small

emissions with a minor contribution to total site e missions. In comparison, OGI detected large leaks at some components that were inaccessible for Method 21 screening. Therefore, OGI is as effective as Method 21 in detecting all but the sma llest leaks and has the added benefit of surveying leaks that are inaccessible to Method 21 screening. 25

Accordingly, we believe that available evidence sug gests LDAR using IR cameras is as effective as Method 21 but less costly due to the s peed with which operators can survey sites using cameras.

2. Repair – Low Leak Technologies

Repair technologies can also achieve emissions redu ctions. EPA’s White Paper does not specifically address these technologies, but “low l eak” or “leakless” valve packings, gaskets, and other equipment can be certified to operate with mi nimal fugitive emissions. Certain low-leak technologies, such as “Low-E” valves and valve pack ings, have been in use for over fifteen years, have been found to leak rarely and at minima l rates, and are available at a moderate cost premium of 10-35% relative to standard valves. 26 Manufacturers of this equipment have begun issuing warranties assuring that the equipment will not emit fugitive emissions in concentrations greater than 100 ppm, and several standard industry test protocols are available for certifying low-leak equipment. 27 As a result, over the last several years EPA has included provisions in consent decrees with petroleum refineries and chemi cal facilities that require replacement of leaking valves and valve packings with low-leak tec hnology. 28 In addition, EPA’s proposed Uniform Standards for equipment leaks would require that low leak technology be used to repair or replace valves and connectors for which a repair cannot be completed within the standard 15- day deadline provided in the proposed rule. 29 Accordingly, this low-leak replacement technology should be considered as a mitigation tec hnology in EPA’s White Paper.



### B. Scope: Implications for Cost / Effectiveness

1. Leak Detection – Site Surveys vs. Component Surv eys

As discussed in II.A., a holistic approach to LDAR that encompasses surveys of entire

facilities can maximize the number of leaks found a nd fixed. By surveying the full site

25 As an exhibit, we are providing a spreadsheet with the underlying data and calculations presented in this paragraph.

26 Kosta Loukeris, Low Leak Valve and Valve Packing Technology (Low-E Valve)

, 4 (EPA, Aug. 16, 2011); See also Joseph Wilwerding, Fugitive Emissions From Valves: Update, Hydrocarbon Processing V-81, V-82 (June 2010) (indicating that costs for low-leak valve packings are “similar and sometimes less than costs for simi lar equipment.”)

27 Loukeris, supra note 26, at 10.

28 See Id . at 14 (listing seven consent decrees signed as of August 2011); James Drago, Legislating Leak Detect ion: How U.S. Regulations Are Impacting the Rest of the World, 18 F LOW C ONTROL 11, 16-18 (Nov. 2012).

29 77 FR 17,897 (Mar. 26, 2012).E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

17 comprehensively, unexpected leak sources can be ide ntified efficiently. Moreover, while a comprehensive approach optimizes emission reduction s, it does not materially increase cost relative to a more limited and traditional LDAR pro gram. Regardless of scope, operators incur certain fixed costs, such as equipment, personnel, and training, for establishing a LDAR program. Sampling the full range of potential leak ing components – including pneumatics, storage tanks, and compressors – can uncover substa ntial additional leakage at minimal incremental operating costs, including those for ad ditional employee time and any administrative costs for tagging and tracking components. 30

Indeed, recent evidence from companies, regulators, and independent studies suggest the importance of a comprehensive approach to LDAR. I n a February, 2014, Natural Gas Star Technology Transfer Workshop, Southwestern Energy n oted that primary LDAR targets included valves, connectors, and open-ended lines, while secondary targets included pneumatics, compressors, and storage tanks. 31 Colorado’s rules include LDAR requirements applica ble to well-sites, storage tanks, and compressors, 32 and ICF’s 2014 Cost-Curve Report identifies both well-sites and compressors as significant opportuni ties to reduce fugitive emissions (concluding LDAR at reciprocating compressors actually has a ne t positive payback). 33 The Carbon Limits Report confirms these findings and also concludes t hat LDAR programs may help to identify other malfunctioning devices like pneumatic control lers. 34

2. Repair – Cost of Detection vs. Repair (Question 11)

The scope of repair (whether all leaks are repaired or only a subset) is likewise important to the cost / effectiveness of a LDAR program. EPA has requested comment on the cost of detecting a leak when compared to repairing a leak, and in particular, the conclusion that nearly all leaks are economical to repair once detected gi ven the relatively modest costs of repair. We agree that repair costs are a small fraction of ove rall LDAR costs and an LDAR approach where all leaks are repaired has obvious advantages in te rms of effectiveness but also has potential cost savings when compared to program focused on repair of only a subset of leaks (those that are above a certain threshold).

The White Paper presents evidence that the vast maj ority of leaks are economical to repair once detected because repair costs are small and offset by gas savings. As a threshold matter, we note the relatively good agreement betwe en the Carbon Limits Study and Clearstone II on the costs of repairing different types of com ponents. As Carbon Limits notes, both median and average repair costs for many components fall b elow $100 – a small fraction of the cost of monitoring at the facility. Moreover, Carbon Limit s, Clearstone I and Clearstone II present a

30 Importantly, components such as pneumatic devices, storage tanks, and compressors are far more limite d in number than valves, connectors, and other component s monitored in typical LDAR programs.

31 Southwestern Energy , EPA Natural Gas Star Production Workshop (Feb. 11 th ,2014), available at http://www.epa.gov/gasstar/documents/workshops/denv er-2014/Southwestern_Energy.pdf

32 5 C OLO

. C ODE R EGS . § 1001-9 XVII.F.

33 ICF Cost Curve Report, supra note 3, at 4-3.

34 Carbon Limits, Quantifying the Cost-effectiveness of Systematic Le ak Detection and Repair Programs Using Infrared Cameras 5 (Mar. 2014), available at http://www.carbonlimits.no/PDF/Carbon_Limits_LDAR.p df

.E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

18 strongly consistent picture of the percentage of le aks that are economical to repair (approximately 90%, 95%, and 96% respectively). Th e White Paper’s conclusion is robust.

Repairing all leaks also has obvious benefits in te rms of the effectiveness of an LDAR program. EPA’s White Paper describes these clearly

, 35 and we do not have any additional comments. An approach focused on repairing all leak s, however, may have less obvious cost benefits when compared to approaches focused on thr eshold repair levels. In particular, repairing all leaks does not necessarily require th at an operator quantify each found leak, which, for detection technologies like OGI that are not ca pable of quantification, has the potential of reducing overall costs associated with the LDAR str ategy. Conversely, setting a threshold level of repair would require quantification in all insta nces and could lead to inefficiencies with fluctuating gas prices. The next section discusses the importance of quantification generally as part of an LDAR program.

3. Repair – Importance of Quantification (Question 12)

To assess the relative importance of leak detection and leak quantification, it is helpful to be clear on the objectives of the field exercise it self. For scientific studies, such as the “bottomup” studies conducted by EDF and others, the object ive is to create a rigorous and accurate estimate of emission rates, based on direct measure ment. For that objective, it is plain that detection alone would be insufficient, and quantifi cation is required. The additional time and cost associated with full quantification is a necessary part of the scientific process.

An effective pollution control regulatory regime, however, differs from a scientific inquiry. For example, technology-based emission sta ndards under the Clean Air Act must merely be designed to achieve emission reductions swiftly, effectively, and at reasonable cost, to achieve environmental and public health goals. In this cont ext, leak detection should be the primary goal, since as a general matter, detection alone is both necessary and sufficient to enable repair. A blanket requirement of quantification on top of det ection could add cost, and perversely could actually extend the duration of leaks to make time for quantification after detection and before correction. Neither current EPA regulations requir ing LDAR at new gas processing plants, 36 nor LDAR regulations adopted by various states, require quantification of leaks prior to repair.

Were EPA to consider future action that would enta il quantification of leaks, the agency could consider a potential supporting role for limi ted quantification. For example, quantification could be required for a limited but statistically s ignificant sample of leaks detected and fixed, both to enhance verification and potentially to ena ble more precise determinations of the benefits

of LDAR.



### C. Frequency: Implications for Cost / Effectiveness (Question 9)

In addition to technology and scope, the frequency of leak detection activities and the speed with which repairs are carried out have impli cations for the cost and effectiveness of an LDAR program. Charge question 10 specifically reque sts comment on how frequency impacts cost and effectiveness in the context of voluntary industry LDAR programs. While we do not have evidence concerning voluntary industry efforts , several reports and regulatory support documents provide evidence of the impact of differe nt monitoring frequencies on effectiveness.

35 White Paper at XX (greater emissions reductions ac hieved through comprehensive repair).

36 See generally 40 CFR Part 60, Subparts OOOO and VVa.E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

19 The White Paper does not include this information a nd we believe that it is important to incorporate. In particular:

• ICF Cost Curve (2014) – ICF cites both EPA and Colorado research indicating Annual Inspections reduce emissions by 40%; quarterly insp ections by 60%; and monthly inspections by 80%. 37

• Carbon Limits (2013) – Carbon limits likewise concluded that more frequent inspections result in greater emissions reductions. The databa se Carbon Limits used to perform the analysis included facilities inspecting on an annua l basis and every two years. The CL analysis seems to assume that components will begin leaking again shortly after they are repaired, supporting the conclusion that more frequ ent surveys will help to drive down

emissions.

• Subpart OOOO TSD – EPA’s July 2011 technical support document for the proposed oil and gas sector NSPS assumed that control effectiven ess has a hyperbolic relationship with monitoring frequency. 38



### D. Two-Step LDAR (Question 10)

Finally, EPA requests comment on the feasibility, c ost, and effectiveness of a two-step LDAR approach. Traditional, one-step LDAR programs require screening of all potential leak sources at facilities despite evidence indicating t hat in most cases less than 2% of components will actually be leaking. Even among leaking compo nents a small percentage of leaks (i.e. those that are the largest) generally account for a large majority of total leak volume. As described above, data from 375 gas production facilities in F ort Worth indicates that 35% of sites

accounted for 95% of total estimated annual emissio ns from leaks, while only 14% of sites

accounted for 80% of emissions. 39

A two-step LDAR process can take advantage of this leak distribution pattern to reduce average LDAR costs for a group of distributed gas p roduction sites. Under a two-step approach, operators would use an ambient methane monitor moun ted on a vehicle (or other screening technology) to quickly determine whether there was a significant leak(s) at the facility, without actually pin-pointing or quantifying the leak(s). In the second step, operators would use OVA or OGI to pinpoint the actual leaks for repair. Facili ties not identified as leaking during the first ste p would not be checked during the second step. This approach has the potential to significantly reduce total monthly screening time for a group of distributed facilities.

EDF used many of EPA’s assumptions in the Subpart O OOO TSD to model the cost of a two-step approach and determined that, for EPA Mode l 2 facilities, control costs were $5/ton of

methane reduced. 40 For this analysis, EDF assumed a population of 37 5 production facilities with average emissions equivalent to the “Model 2” well site described in the Subpart OOOO TSD, but distributed in the same way as the Fort Wo rth dataset. EDF also assumed that mobile

37 ICF Cost Curve Report, supra note 3, at 3-10.

38 EPA, Oil and Natural Gas Sector: Standards of Perf ormance for Crude Oil and Natural Gas Production, Transmission, and Distribution, Background Technica l Support Document for Proposed Standards, at 8-26 (Aug. 2011).

39 See Figure 1.

40 The assumptions underlying this analysis are provi ded in a spreadsheet attached as an exhibit.E NVIRONMENTAL D EFENSE F UND • J UNE 16, 2014

20 screening would be sensitive enough to identify the highest-emitting sites responsible for approximately 80% of total emissions from the popul ation.

Southwestern Energy is likewise testing this approa ch in the field and presented results of that testing in a February presentation at the Natu ral GasStar Technology Transfer Workshop. Of note, Southwestern was able to survey 21 well sites and 3 drill rigs with this technology in approximately 17 hours. Moreover, Southwestern fou nd that leaks exhibited a gross-emitter or fat tail distribution and that mobile surveyor resu lts compared favorably to Hi-Flow

measurements taken onsite. 41



### V. C ONCLUSION

Even as the data improves on the national methane e missions rate, years of scientific study and industry experience make clear that leaks are both widespread and substantial. But it is equally clear that the lead control strategy – holi stic LDAR deployed at the site level across the value chain – is proven and cost effective. OGI tec hnology is effective, efficient, and spreading both in voluntary corporate use and inclusion in em erging state policy constructs. As Exxon Mobil itself wrote after conducting its own study o f OGI, 42 “the study results are very promising and indicate that any concerns are easily addressed or unfounded”. This finding is consistent with the recent experience of Southwestern Energy, the industry-vetted analysis of the ICF Report, the quantitative data compiled from thousan ds of real world surveys performed for the Carbon Limits paper, and ample anecdotal evidence f rom our engagement with operators. Moreover, as technology offerings continue to evolv e in response to market demand signals and state policy drivers, the universe of cost effectiv e LDAR solutions will likely only expand.



### VI. E XHIBITS

1. EDF analysis of site emissions data from Fort Worth and Allen studies, Fort Worth &
UT Site Emissions.xlsx (May 2014)

2. EDF comparison of OGI & Method 21 effectiveness bas ed on Fort Worth study, Fort
Worth OGI & Method 21 comparison.xlsx (May 2014)

3. EDF analysis of cost-effectiveness of “two-step” LD AR, EDF-Two-StepAnalysis.xlsx (August 2013).

41 See Southwestern presentation, s upra note 31.

42 ExxonMobil Chemcial Co., “Smart LDAR: Pipe Dream o r Potential Reality”, available at http://www.flir.com/uploadedFiles/Thermography_USA/ Industries/OGI/5_Smart_LDAR.pdf

.