1

1 Environmental Protection Agency

2

3

4 EPA Docket Number EPA-HQ-OAR-2014-0831

5

6 Public Hearing on

7 Greenhouse Gas Reporting Rule:

8 2015 Revisions and Confidentiality 

9 Determinations for Petroleum and 

10 Natural Gas Systems

11

12

13

14 9:11 to 10:12 a.m.

15 Thursday, January 8, 2015

16

17 U.S. Environmental Protection Agency

18 Room 1153

19 1201 Constitution Avenue, N.W.

20 Washington, D.C. 20004

21

22

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1 EPA PANEL:

2 PAUL GUNNING, Presiding Official,

3 Director, Climate Change Division, EPA

4 ANHAR KARIMJEE, Branch Chief,

5 Greenhouse Gas Reporting Program, EPA

6 ALEXIS McKITTRICK,

7 Technical Subject Matter Expert,

8 Greenhouse Gas Reporting Program, EPA

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1 C O N T E N T S

2 PAGE

3 THOMAS BACH, Director,

4 Environmental Services, Kinder Morgan,

5 Representing Interstate Natural Gas

6 Association of America 7

7 KARIN RITTER, Manager,

8 Regulatory and Scientific Affairs Department,

9 American Petroleum Institute 16

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1 P R O C E E D I N G S

2 MR. GUNNING: It is cold, and it is a big 

3 room. The closer you get together, the warmer 

4 you will be.

5 Anyway, in case you are wanting to know 

6 where you are and making sure you are at the 

7 right place, this is a hearing on the proposed 

8 rule, greenhouse gas reporting rule, 2015 

9 revisions and confidentiality determinations for 

10 petroleum and natural gas systems, Subpart W.

11 I am Paul Gunning. I am the Director of 

12 the Climate Change Division at EPA, and I will be 

13 presiding over the hearing this morning. 

14 I also have a couple colleagues -- I will 

15 allow them to introduce themselves -- that will 

16 be joining us today.

17 MS. KARIMJEE: Good morning. I am Anhar 

18 Karimjee, and I am the Branch Chief for the 

19 Greenhouse Gas Reporting Program.

20 MS. McKITTRICK: Alexis McKittrick with 

21 the Greenhouse Gas Reporting Program.

22 MR. GUNNING: So the purpose of the 

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1 hearing today, as many of you know, is to receive 

2 comments on the proposed rule, which again was 

3 published in the Federal Register back on 

4 December 9th, 2014.

5 This hearing is being conducted in 

6 accordance with the Clean Air Act under which EPA 

7 provides interested persons the opportunity for 

8 all presentation of the views and arguments as 

9 well as the opportunity to submit written 

10 comments. The hearing today provides a forum for 

11 those oral presentations.

12 I want to make sure everybody is aware 

13 that we are having the hearing recorded. There 

14 is a transcript that will be available for public 

15 inspection and copying in the docket, the Docket 

16 Number, the EPA Docket Number, EPA-HQ-OAR-2014-

17 0831.

18 The transcript, of course, will be also 

19 available electronically on the regulations.gov 

20 website in the same docket.

21 This morning, we are going to conduct the 

22 hearing informally, and Formal Rules of Evidence 

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1 do not apply. However, as the presiding officer, 

2 I will let you know that I am authorized to 

3 enforce reasonable limits on the duration of 

4 statements of any witnesses. We don't have a big 

5 group today, so, hopefully, that will be a good 

6 opportunity for folks to speak.

7 Each witness will be allowed to make an 

8 oral statement, which they may later expand on in 

9 writing for the record. 

10 I request that each speaker state their 

11 name and affiliation at the start, and when you 

12 are finished with your comments, the members of 

13 the panel, including myself, may ask clarifying 

14 questions.

15 Let me emphasize this hearing is not 

16 intended to be a discussion of the proposed rule. 

17 While the folks up here might ask some questions 

18 or request some additional data or supporting 

19 materials based on your comments, we will not 

20 respond to comments in this forum. Instead, we 

21 will provide a written response to the relevant 

22 comments through the formal rulemaking process.

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1 Specifically, if your comments are 

2 different today than your written comments, we 

3 ask that you please submit written handouts 

4 directly to the docket.

5 Comments that we will receive today, I 

6 will call folks up in a couple minutes today in 

7 the order that you were signed in. The speakers 

8 who registered first via the website and 

9 registration process will go first, followed by 

10 speakers who registered here in person this 

11 morning.

12 In looking at the list, I believe the 

13 first speaker today is Thomas Bach, representing 

14 the Interstate and Natural Gas Association of 

15 America.

16 Mr. Bach, I'd like to invite you to the 

17 podium for your remarks.

18 MR. BACH: Good morning.

19 MR. GUNNING: Good morning.

20 MR. BACH: I'm Thomas Bach. I am a 

21 Director of Environmental Services for Kinder 

22 Morgan. I am here today representing the 

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1 Interstate Natural Gas Association of America, 

2 otherwise known as INGAA.

3 INGAA is a trade association that 

4 advocates regulatory and legislative positions of 

5 importance to the natural gas pipeline industry 

6 in North America. INGAA's members, which operate 

7 approximately 200,000 miles of pipelines, 

8 represent the vast majority of the interstate 

9 natural gas transmission pipeline companies in 

10 the United States and comparable companies in 

11 Canada.

12 Transmission pipelines are long-line, 

13 high-pressure pipelines, analogous to interstate 

14 highways. INGAA does not represent the gathering 

15 or distribution pipelines.

16 We appreciate the EPA holding this public 

17 hearing on the proposed rule, "Greenhouse Gas 

18 Reporting Program: 2015 Revision and 

19 Confidentiality Determinations for Petroleum and 

20 Natural Gas Systems."

21 First, let me say that INGAA agrees that 

22 pipeline blowdowns can contribute to methane 

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1 emission levels. As a result, INGAA supports 

2 EPA's efforts to include pipeline blowdowns in 

3 its Subpart W reporting requirements for natural 

4 gas transmission pipelines. 

5 However, INGAA does has some concerns 

6 with the details of EPA's current proposal. In 

7 order to present a complete picture of the total 

8 methane emissions from the natural gas 

9 transmission sector and inform the cost-benefit 

10 analysis for reducing those emissions, EPA should 

11 consider the current and future regulatory 

12 drivers for various emission categories, 

13 including pipeline segment blowdowns.

14 Pipeline segment blowdowns are essential 

15 for safe pipeline operation. Let me first 

16 describe what a pipeline blowdown is in case 

17 people are not aware of it. A blowdown is the 

18 removal of product from the pipe in order to 

19 conduct maintenance. It is similar to how you 

20 would drain water from your hoses or exterior 

21 faucets before winter.

22 Pipeline segment blowdowns are required 

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1 to perform maintenance, testing, pipe 

2 replacements, and for safe pipeline operations.

3 The Pipeline and Hazardous Materials 

4 Safety Administration, hereinafter referred to as

5 PHMSA, requires pipeline blowdowns as part of the 

6 replacement process for class location changes; 

7 that is, pipeline increases in the vicinity of 

8 the pipeline above specified thresholds and for 

9 hydrostatic testing for integrity testing, which 

10 is when -- hydrostatic testing is when an 

11 operator tests the pipe using water under high 

12 pressures.

13 Pipeline blowdowns can also be required 

14 for other pipeline safety purposes such as 

15 repairing third-party or other pipe damage.

16 In some cases, but not all, the required 

17 pipeline segment blowdowns are unnecessary since 

18 there are new advanced technologies such as 

19 improved in-line inspection technologies that

20 exist to validate the pipe integrity without 

21 resulting in blowdowns.

22 While pipeline blowdowns are not under 

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1 EPA's jurisdiction, INGAA encourages the Obama 

2 administration to review existing and future 

3 pipeline safety regulations as part of a broader 

4 strategy for reducing methane emissions. The 

5 administration should consider allowing use of 

6 alternative technologies to ensure pipeline 

7 safety while reducing the requirements for 

8 pipeline blowdowns. Substantial methane emission 

9 reductions can be achieved by implementation of 

10 these alternative pipeline integrity 

11 technologies.

12 With that said, pipeline operators must 

13 have the ability and flexibility to blowdown 

14 pipeline segments to meet regulatory 

15 requirements, conduct pipeline maintenance and 

16 repairs, to maintain safe operations of this 

17 critical national infrastructure, and to meet 

18 residential and industrial customer demands.

19 In addition, INGAA encourages EPA to 

20 establish some de minimis reporting threshold for 

21 pipeline blowdowns.

22 In terms of the specifics of the proposed 

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1 rule, I will briefly discuss concerns with, one, 

2 the requirement for spatial location information 

3 for each blowdown event; two, the effective date 

4 and timing of the rule; three, INGAA's support 

5 for advanced innovative monitoring methods.

6 Pipeline blowdown spatial data. EPA 

7 proposes that pipeline blowdown data will be 

8 reported by the specific latitude and longitude 

9 where the blowdown occurs.

10 However, operators currently do not 

11 compile pipeline blowdown data by latitude and 

12 longitude. Therefore, company management systems 

13 will need to be revised to address these new 

14 reporting requirements. There are significant 

15 implementation and timing costs associated with 

16 those efforts.

17 In addition, EPA has not explained what 

18 the air quality benefit would derive nor why it 

19 said reporting at this level of detail is needed.

20 INGAA recommends that pipeline blowdown 

21 data be reported by the pipeline operator, that 

22 is, the specific operating company, as EPA 

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1 currently proposes, but that it be done on a 

2 national or state aggregate basis. Reporting at 

3 the national or state aggregate basis would 

4 reduce implementation time and costs.

5 Best Available Monitoring Methods, 

6 otherwise known as BAMM. EPA proposes to allow 

7 operators to use preapproved BAMM from January 1 

8 through March 31, 2016, to implement the systems 

9 necessary for the proposed reporting.

10 INGAA believes that this is insufficient 

11 time for gas transmission and other affected 

12 sources, such as the gathering and oil production 

13 operators, to develop and implement those 

14 systems. With that, INGAA recommends that EPA 

15 extend the BAMM deadline through 2016.

16 Advanced innovative monitoring methods. 

17 INGAA supports EPA's proposal to allow use of 

18 advanced innovative monitoring technologies and 

19 methods. However, EPA will need to establish 

20 some type of verification and approval process 

21 for these technologies and methods.

22 Pipeline operators should be given the 

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1 discretion to implement advanced innovative 

2 monitoring methods to replace existing Subpart W 

3 requirements rather than those methods being in

4 addition to the current requirements.

5 Other Comments. Other specific comments 

6 on the proposed rule will be included in INGAA's 

7 written comments. 

8 Finally, INGAA appreciates the 

9 opportunity to comment and looks forward to 

10 working with EPA and PHMSA to implement these 

11 proposed regulations in an efficient and cost12 effective manner and to continue to reduce 

13 unnecessary pipeline blowdowns.

14 Thank you.

15 MR. GUNNING: Thank you, Mr. Bach, for 

16 your comments. We appreciate that.

17 Any clarifying questions?

18 [No audible response.]

19 MR. GUNNING: No? 

20 Thank you.

21 MR. BACH: All right. Thanks very much.

22 MR. GUNNING: Thank you. Appreciate it.

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1 I think the next individual on our list 

2 is Karin Ritter from the American Petroleum 

3 Institute, but I believe Karin is not here at the 

4 moment.

5 We will allow Karin an opportunity to 

6 work her way through the D.C. commute this 

7 morning and just take a short break for 15 

8 minutes, and we will resume, hopefully, with 

9 Karin in the room.

10 Thank you.

11 [Break taken from 9:22 to 9:55 a.m.]

12 MR. GUNNING: You are either frozen solid 

13 or very, very awake.

14 At this point in time, it looks like our 

15 final registered speaker for the day has fought 

16 through the mayhem of D.C. traffic, Karin Ritter 

17 representing the American Petroleum Institute.

18 Karin, I realized you just rushed into 

19 the room, but at your leisure, please approach 

20 the podium, and we welcome your remarks. Thank 

21 you.

22 Yes, right here. 

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1 MS. RITTER: Oh, okay. Very good.

2 MR. GUNNING: The mic should be working 

3 too.

4 MS. RITTER: All right. Okay. I have to 

5 get you all to look at.

6 [Laughter.]

7 MS. RITTER: I've been looking at people 

8 at a very close range for the last few minutes --

9 or couple hours, and I think I am flying out from 

10 here up, so that's the important part as far as 

11 working.

12 So, anyway, I'll indulge you for about 15 

13 minutes right now. First of all, good morning. 

14 I am Karin Ritter. I am the Manager with the 

15 Regulatory and Scientific Affairs Department at 

16 API. API is the premier trade association in the 

17 petroleum and natural gas industry, with over 600 

18 member companies engaged in all aspects of the 

19 industry.

20 Emissions have fallen drastically in 

21 recent years, thanks to industry leadership and 

22 investment in technology. Emissions will 

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1 continue to fall as operators innovate and find 

2 new ways to capture and deliver more methane to 

3 consumers. Existing EPA and state regulations 

4 are working, and another layer of burdensome 

5 requirements is unnecessary. The shale energy 

6 revolution has enhanced America's role as a 

7 global energy superpower, and the dramatic 

8 reductions in CO2 emissions have been made 

9 possible by an abundant and affordable domestic 

10 supply of clean-burning natural gas.

11 API has a longstanding relationship and 

12 record of being a collaborative and cooperative 

13 stakeholder with EPA on implementing the 

14 Greenhouse Gas Reporting Program and shares EPA's 

15 goals of providing high-quality data that takes 

16 into account the pragmatic operational and safety 

17 practices of our industry.

18 Through the years, API has provided 

19 multiple sets of comments and technical 

20 information pertaining to the quantification and 

21 reporting of emissions under the reporting 

22 program.

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1 EPA, in November 2015, finalized their 

2 2014 revisions, and API and its members are still 

3 reviewing and assessing this recently promulgated 

4 rule and working to busily implement it under a 

5 very short time frame, mainly March 2015.

6 At the same time, while that assessment 

7 of the 2014 promulgated revisions is ongoing, API 

8 is providing our preliminary comments regarding 

9 these newly proposed requirements in the 2015 

10 revisions.

11 API will submit a full set of written 

12 comments by the end of the comment period, which 

13 stands now at February 9th, or as requested by 

14 API in order to ensure a full and fair 

15 opportunity to provide constructive comments to 

16 EPA by March 9th.

17 API and its member companies understand 

18 that in this proposed rule, which EPA initiated 

19 in response to requests by certain 

20 nongovernmental organizations, EPA proposes to 

21 amend Subpart W to require the reporting of 

22 greenhouse gas emissions from several sources 

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1 that are not currently included in Subpart W.

2 However, API does not fully concur that 

3 all the revisions enhance the quality of the data 

4 from petroleum and natural gas systems or would 

5 it lead to a better understanding of emission 

6 trends. Some of the new requirements are quite 

7 burdensome, overreaching, and do not even 

8 contribute to new emissions information.

9 So, today, I will summarize our five 

10 major concerns. First, API is concerned that the 

11 newly proposed requirements pose an especially 

12 high burden on the industry sector. The EPA 

13 estimates that approximately 3,300 respondents 

14 will be subject to the regulation, and that this 

15 rulemaking will increase labor costs for

16 Subpart W facilities by levying an incremental 

17 annual burden of 73,000 hours, valued at $7.2 

18 million per year, estimates which are 

19 extraordinarily slight compared to the real-world 

20 experience of the industry.

21 More specifically, the reporting burden 

22 estimated by EPA for the newly defined reporting 

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1 segment of Onshore Petroleum and Natural Gas 

2 Gathering and Boosting is grossly underestimated. 

3 Based on API's members' experience in reporting 

4 under Subpart W, this estimate is arbitrarily low 

5 by at least an order of magnitude, especially for 

6 the initial reporting year when one has to 

7 address the startup costs for setting up the 

8 reporting and recordkeeping systems for this 

9 newly defined segment.

10 For the onshore petroleum and natural gas 

11 production segment, EPA states in its own 

12 assessment that the proposed reporting amendments 

13 would impose an additional annual burden of 

14 57,963 technical hours for the production 

15 segment, which API contents is also 

16 underestimated.

17 API maintains that EPA's estimate is 

18 highly unrealistic since it would mean that the 

19 increased annual burden for implementation of the 

20 new reporting requirements for the production 

21 segment would amount to only 29 hours per 

22 response, which is totally unrealistic, 

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1 especially in view of the extent of the new data 

2 collection and measurements required for 

3 implementation.

4 So, for example, the inclusion of 

5 reporting requirements for blowdown vent stacks 

6 for the gathering and boosting segment will be 

7 quite burdensome for unmanned sites. The EPA 

8 Technical Support Document justifies using 

9 default emission factors for quantifying fugitive 

10 emissions associated with the gathering and 

11 boosting segment, quote, because, as in the 

12 onshore petroleum and natural gas production 

13 segment, the equipment is often geographically 

14 dispersed and may be visited only 

15 intermittently," end of quote.

16 For this same reason, EPA should exclude 

17 the reporting of emissions from blowdown vent 

18 stacks for gathering and boosting segment, 

19 similarly to its exclusion from the onshore 

20 petroleum and natural gas production segment.

21 API urges the EPA to work with industry 

22 to streamline the reporting requirements in order 

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1 to minimize the heavy burden imposed on some of 

2 the petroleum and natural gas industry segments.

3 Second, the rule proposes to add 

4 requirements for reporting well identification 

5 numbers, which are claimed to improve data 

6 quality by enabling identification of wells 

7 associated with different sources.

8 The EPA claims that these identification 

9 numbers are readily available and do not require 

10 any additional data gathering or calculation.

11 API contends that this requirement is an 

12 overreach of EPA's authority for the reporting 

13 program, and the information requested is 

14 extraneous and not needed to validate emissions 

15 data. The requirement is inconsistent with the 

16 aggregation of equipment and emissions within a 

17 basin or sub-basin, as currently required in the 

18 rule.

19 With the requirement for complete mapping 

20 of all wells to all sources, the EPA seems to be 

21 attempting to construct a comprehensive 

22 accounting of wells and their ownership. 

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1 Therefore, such a requirement will impose 

2 significant implementation burdens without 

3 contributing to improved emissions data.

4 API stresses that EPA's estimate that 

5 this requirement will impose only a small 

6 additional burden of 10 hours per reporter per 

7 year to report the well ID numbers lacks any 

8 rational basis and is arbitrary.

9 In addition, EPA ignores the burden 

10 associated with mapping and maintaining the well 

11 ID database that could change throughout the year 

12 due to the dynamics of well acquisition, 

13 divestment, and other changes to facilities 

14 operation and movement of transportable equipment 

15 based on operational needs.

16 API also notes that EPA has other avenues 

17 at its disposal to acquire the well information 

18 data, such as commercial data systems like the 

19 DI-Desktop or the EIA's information.

20 API is requesting that EPA in the final 

21 rule abandon the requirement to provide a unique 

22 well identification number. This reporting 

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1 requirement does not have any influence on the 

2 final emission calculations and only serves to 

3 detract from the resources needed to manage and 

4 report the emissions data.

5 Third, API appreciates the fact that EPA 

6 is citing API Recommended Practice 80 as a guide 

7 to the definition of the new reporting segment of 

8 onshore petroleum and natural gas gathering and 

9 boosting.

10 API also supports the statement that this 

11 new reporting segment would not include equipment 

12 and pipelines that are reported under any other 

13 industry segment defined in Subpart W. In order 

14 to streamline the demarcation of boundaries and 

15 reporting obligations between the production and 

16 gathering/boosting segments, API offers two 

17 refinements.

18 First, API requests that multiphase 

19 gathering pipelines be excluded from the 

20 gathering/boosting segment and be retained as 

21 part of the production segment.

22 Secondly, API requests that gathering and 

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1 boosting facility boundaries include dehydrators 

2 that are located on onshore petroleum and natural 

3 gas production well pads and operated by a 

4 gathering and boosting company.

5 Moving these dehydrators into this newly 

6 created segment, rather than including them with 

7 the onshore petroleum and natural gas production 

8 segment will eliminate the concern of having 

9 producers report third-party contractors' 

10 emissions, which the producers cannot certify.

11 Fourth, EPA is proposing to add 

12 provisions for the reporting of greenhouse gas 

13 emissions from oil well completions and work14 overs with hydraulic fracturing, which are 

15 consistent with the current requirements for gas 

16 well completions and work-overs with hydraulic 

17 fracturing.

18 The proposed provision apply expanded 

19 measurement requirements to oil well completions 

20 with hydraulic fracturing that use flaring and 

21 reduced emission completions, or RECs.

22 API notes that EPA assumes that operators 

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1 know in advance whether a completion or work-over 

2 will require flaring. In reality, it is not 

3 possible to determine whether a well will clean 

4 up quickly with no need to flare or vent prior to 

5 beginning the actual flow-back. Therefore, 

6 flaring versus venting cannot be the deciding 

7 criteria for planning which wells to measure or 

8 collect information to enable the calculation of 

9 the flow-back volume.

10 Besides the obvious cost and burden 

11 implications of quadrupling the number of

12 possible combinations requiring measurement or 

13 calculation in each county, this will be a 

14 scheduling impossibility for operators.

15 API is requesting that upon promulgation, 

16 EPA establish only two categories for reporting 

17 emissions from completions and work-overs with 

18 hydraulic fracturing, namely venting without REC 

19 and vented with REC and flaring.

20 Fifth, and finally, in the preamble to 

21 the proposed rule, the EPA discusses the 

22 potential opportunities for applying remote 

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1 sensing technologies and other innovations in 

2 measurement or monitoring technology to identify 

3 and calculate emissions from affected sources 

4 under Subpart W.

5 EPA's stated objectives are to determine 

6 if new and innovative technologies could be 

7 applied to the reporting program to improve the 

8 overall accuracy of transparency of reported data 

9 in a cost-effective way.

10 API views the introduction of this topic 

11 as totally inappropriate within the framework of 

12 the proposed revisions, which are intended to 

13 address the introduction of new reporting 

14 requirements for new segments and selected 

15 operations. The issue of using advanced 

16 monitoring techniques is pertinent to all the 

17 sectors that are subject to part 98 and its 

18 various subparts and should not be constrained 

19 just within the Subpart W framework.

20 API requests that EPA acknowledge upon 

21 promulgation that this discussion is premature 

22 for consideration under this rule and should 

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1 defer the request for comments and information on 

2 the topic until after all the new 2015 reporting 

3 requirements are implemented.

4 So, in summary, API respectfully requests 

5 that EPA consider that API's members, if not all 

6 of industry, are still in the process of 

7 implementing the promulgated 2014 revisions as 

8 part of their annual reporting obligations along 

9 with preparing to report the previously deferred 

10 data elements by March 31st of this year.

11 EPA should allow for sufficient time to 

12 review and comment on the multiple new 

13 requirements in this proposed rule and should 

14 defer the comments submittal date by at least 30 

15 days, as API has already requested to March 9th, 

16 or preferably until after March 31st when the 

17 annual reports are due.

18 EPA is greatly concerned by the burden 

19 imposed by the EPA on the petroleum and natural 

20 gas industry with back-to-back promulgation of 

21 the 2014 revisions and the proposal of reporting 

22 expansion in the 2015 revisions.

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1 Therefore, API requests that EPA extend 

2 the public review period to provide adequate o pp 

3 for public comments.

4 We look forward to continuing our 

5 constructive and established relationship with 

6 EPA in pursuit of our shared goal of providing 

7 high-quality data that can be reported in a way 

8 that reflects the pragmatic realities of our 

9 industry.

10 Thank you. Appreciate it.

11 MR. GUNNING: Thank you, Karin.

12 Any clarifying comments from --

13 MS. McKITTRICK: No.

14 MS. KARIMJEE: No.

15 MR. GUNNING: No?

16 Thank you so much for your remarks.

17 MS. RITTER: Okay, great.

18 MR. GUNNING: We appreciate it. If they 

19 are different, Karen, than from what you plan to 

20 submit in writing, please submit those to the --

21 MS. RITTER: I will submit these. I 

22 brought along a copy.

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30

1 MR. GUNNING: Okay. Thank you so much. 

2 Thank you so much.

3 That concludes, I believe, unless there 

4 are other registered speakers, which I don't 

5 think that there are, our cold hearing for this 

6 morning. I'd like to thank everyone for their 

7 time and specifically for INGAA and for API for 

8 offering their comments this morning, and stay 

9 warm, everyone. Take care.

10 [Whereupon, at 10:12 a.m., the public 

11 hearing concluded.]

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1100 Connecticut Avenue NW, #810, Washington, DC 20036

Washington: 202-898-1108 • Baltimore: 410-752-3376

Toll Free: 888-445-3376