Petition for Reconsideration of 

Subpart W of the Final Rule for Mandatory Reporting of Greenhouse 

Gases: Petroleum and Natural Gas Systems 

75 Fed. Reg. 74,458 (Nov. 30, 2010); Docket No. EPA-HQ-OAR-2009-0923 

March 2, 2011 

_____________________________________________________________________ 

I. Introduction 

The American Gas Association, founded in 1918, represents 199 local energy 

companies that deliver clean natural gas throughout the United States. There are 

more than 70 million residential, commercial and industrial natural gas customers in 

the U.S., of which 91 percent — more than 64 million customers — receive their gas 

from AGA members. AGA is an advocate for natural gas utility companies and their 

customers and provides a broad range of programs and services for member natural 

gas pipelines, marketers, gatherers, international natural gas companies and 

industry associates. Today, natural gas meets almost one-fourth of the United 

States' energy needs. 

AGA appreciates the effort that the U.S. Environmental Protection Agency (“EPA” or 

“Agency”) made to understand our issues and to address the concerns we raised in 

our comments on the Subpart W proposed rule. In particular, we appreciate EPA’s 

clarification in the final rule that our members’ more than 64 million residential, 

commercial and industrial customer meters will not be subject to annual on-site 

surveys or other reporting requirements under Subpart W. We also appreciate 

EPA’s decision to allow an array of effective leak survey options, as we requested, 

rather than requiring that all leak surveys be performed using infrared cameras. 

These two changes significantly reduce burdens and costs as compared to the 

proposed rule. 
Unfortunately, in attempting to address these concerns in the final rule, the Agency 

has adopted new terms and requirements with no clear meaning that unless 

changed will make it impossible for our members to determine with assurance how 

to comply with the rule, yield conflicting and unreliable emissions data, and thereby 

undermine the purposes of Subpart W. We believe these new problems can be 

resolved if we are allowed to provide comments and discuss our proposed solutions 

with the Agency. AGA is therefore petitioning for EPA’s reconsideration of the 

Subpart W final rule captioned above (Subpart W Rule) pursuant to section 

307(d)(7)(B) of the Clean Air Act (CAA or Act). In addition, we request that EPA 

stay the effectiveness of these provisions in the Subpart W Rule pending 

reconsideration. 

Section 307(d)(7)(B) of the Act provides that the EPA Administrator is required to 

convene a proceeding to reconsider a final rule, 

“[i]f the person raising an objection can demonstrate to the Administrator that it 

was impracticable to raise such objection within [the period for public comment] 

or if the grounds for such objection arose after the period for public comment (but 

within the time specified for judicial review) and if such objection is of central 

relevance to the outcome of this rule.” 

CAA §307(d)(7)(B), 42 U.S.C. §7607(d)(7)(B). AGA’s objections clearly meet this 

standard. We object to terms and requirements that appeared for the first time in the 

final rule in November 2010, thus providing us no opportunity to comment on them 

during the period for public comment on the proposed rule, which closed on June 11, 

2010. 

We also object to terms that were used in different ways in the proposed rule than in 

the final rule. Here, too, the grounds for our objection did not arise until after the 

comment period closed. Further, these terms and requirements are of “central 

relevance to the outcome of this rule.” AGA members cannot decipher the meaning 

of these new terms – which are subject to conflicting interpretations. 

It is conceivable that the electronic reporting forms or software that EPA has 

promised might upon review resolve some of these issues. But EPA did not provide 

these materials for review and comment during the comment period. On March 1, 

2011, the Agency announced that it will release the reporting software sometime 

later this spring. We will need an opportunity to test this software and the forms to 

be sure they align with what is required in the Subpart W Rule, once we know what 

that is. 

2
As a result of these uncertainties, it will be impossible in present circumstances for 

Designated Representatives to provide the required certification of compliance with 

the related Subpart W reporting requirements and emission factor formulas with 

assurance. In addition, the conflicting interpretations of key terms and requirements 

are likely to result in either significant over reporting or under reporting or inaccurate 

reporting of greenhouse gas emissions. Clearly, these objections are of central 

relevance to the outcome of this rule. 

II. Objections and Request for Administrative Stay 

A. Request for Administrative Stay of Subpart W Rule 

EPA should stay the application of the Subpart W Rule pending reconsideration. 

The Administrative Procedure Act (APA) provides that “[w]hen an Agency finds that 

justice so requires, it may postpone the effective date of action taken by it, pending 

judicial review.” 5 U.S.C. §705. APA section 705 clearly shows that the standard for 

an Agency’s administrative stay (justice so requires) differs significantly from the 

standard for a judicial stay of the Agency’s action (irreparable harm). There is no 

need to show irreparable harm to support an administrative stay. EPA has applied 

the APA’s “justice so requires” standard for administrative stays in Clean Air Act 

cases.1

 EPA can and should find that in this instance, justice requires staying the 

Subpart W Rule pending reconsideration. Certainly it is unjust to require 

compliance from natural gas local distribution companies (LDCs) when they cannot 

determine what they are required to do under the Rule, and absent a stay, they will 

be forced to make a “guess” to begin performing leak surveys and collecting data on 

emissions this year. The resulting information would be gathered under different 

interpretations of the rule, as each LDC did the best it could, and therefore would be 

of little use to EPA. Accordingly, there would be no significant damage to EPA’s 

mission from granting this stay. 

AGA accordingly requests a stay of the effective date for the Subpart W provisions 

affecting natural gas distribution, dehydration units at underground storage facilities, 

and LNG facilities pending reconsideration. 

                                                           

1

 See, e.g., Ohio: Approval and Promulgation of Implementation Plans, 46 Fed. Reg. 8,581, 8,582 n.1 

(Jan. 27, 1981). 

3
B. AGA’s Objections 

AGA requests reconsideration of Subpart W, as applied to Natural Gas Distribution 

Companies, Natural Gas Distribution Facilities, dehydration units and internal 

combustion units at Underground Storage Facilities, and LNG facilities, based on the 

following objections. 

1. Key New Terms Are Vague and Confusing 

The Subpart W obligations for LDCs are primarily focused on reporting emission leaks. 

The manner in which those leaks must be quantified and reported depends on the 

regulatory classification of the leaking equipment. Specifically, physical surveys of the 

number of leaks are required for “above ground meters and regulators at custody 

transfer city gate stations.” Emission factors for leaking component are then applied to 

those numbers to compute an end quantity. 

On the other hand, the rule requires “developed” emission factors to quantify emissions 

from “above ground meters and regulators at non-custody transfer city gate stations.” 

The rule does not define any of these terms (e.g., custody transfer city gates, non -

custody transfer city gates, meters and regulators). Most importantly, the basic 

distinction that required these new definitions was not present in the proposed rule. 

Accordingly, there was neither opportunity nor occasion to comment on these terms and 

their usage during the rulemaking. AGA members would like to work with EPA to 

develop clear definitions for the terms custody transfer city gates and non-custody 

transfer city gates. 

 

a) Non-custody Transfer City Gates Station 

Several provisions in the Subpart W Rule and preamble seem to imply that a “noncustody-transfer city gate station” will always have a meter. The emission factor 

equation W-32 for “non-custody-transfer city gate stations” clearly requires multiplying 

the emission factor times the number of above ground meter runs. 

There is a difference of opinion among AGA members whether a non-custody transfer 

station must have a meter to be a part of the reporting requirement. The term is not 

clearly defined in the rule. 

The term “city gate” is widely used in the industry, but unfortunately it means different 

things to different companies. It can mean the place where an LDC takes custody of 

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natural gas from the upstream supplier (either directly from a producer or from an 

interstate pipeline company). The term “city gate” is also used by some to refer to the 

place where natural gas is conveyed into a lower pressure distribution system for a town 

or city – either directly from the upstream supplier (producer or interstate pipeline) or 

from the LDC’s own intrastate high pressure transmission pipelines. 

Some companies do not use the term “city gate” to refer to the situation where natural 

gas goes from the company’s own transmission pipes to one of its distribution systems. 

Instead, these companies may use other terms such as “district regulator” or “metering 

and regulating station,” or “M&R” equipment, and these terms also can have varying 

meanings. AGA believes the best solution would be to work with EPA to develop clear, 

workable definitions for use in the Subpart W rule. This is essential to ensure that all 

operators report the same information required by EPA. 

It was not possible to comment on this issue, because the terms “city gate,” “custody 

transfer,” " non-custody transfer," “meter and regulator” and “meter run” were not used 

in proposed section 98.232(i)(1) until after the final rule went into place Moreover, the 

whole conceptual framework of the proposed rule was different, in that the proposed 

rule did not rely on making distinctions among different locations or types of equipment. 

b) Custody Transfer City Gate Stations 

In the Subpart W Rule, EPA introduced a new requirement that an LDC must perform 

annual leak surveys at all its “custody-transfer city gate stations.” This term appeared 

for the first time in the final rule and is not defined. Accordingly, AGA had no 

opportunity to comment on it. 

Various provisions in the Subpart W Rule and preamble indicate that the LDC should 

perform leak surveys on a list of specified equipment, apply certain default “leaker” 

emission factors to the components found to be leaking at the time of the survey, total 

those leaker emission factors for each station, and then total the emissions from all 

stations and divide by the number of meter runs to develop a company-specific 

emission factor for “city gate stations” that is to be applied to the population count of 

meter runs at non-custody transfer city gate stations regardless of whether it has a 

meter, depending on the definition of non-custody transfer station. 

The Subpart W Rule indicates that facilities that are part of a transmission system are 

not subject to Subpart W reporting. But in many cases, the meter runs at custody 

transfer stations are owned and operated by the upstream supplier (which is either the 

producer or an interstate transmission pipeline company). The upstream supplier needs 

5
to know the volume of natural gas conveyed, so that they know how much money to bill 

the LDC. The LDC does not own or operate the meter runs in these situations, the 

meters are not within the distribution system, and the LDC has no authority to leak test 

the equipment owned and operated by another entity. Since the equipment is within the 

transmission system, that would seem to place it outside the scope of the Subpart W 

Rule. This will lead to anomalous results. We believe it makes better sense to apply a 

standard emission factor to a population count of such stations, and this will yield better, 

more consistent data. 

2. There are Far Simpler Ways to Accomplish EPA’s Objectives 

Equally Well 

We urge EPA to allow LDCs to use the new, updated emission factors developed 

recently by the Gas Technology Institute (GTI) Operations Technology Development 

(OTD) group for custody transfer stations and below ground regulators, which were 

described in AGA’s comments and provided to EPA by member National Grid during the 

comment period. These new emission factors could be applied to a population count of 

both above and below ground regulator stations to provide a more comprehensive and 

accurate estimate of greenhouse gas emissions – using an easier and cheaper 

approach. 

3. New Emission Factor Formulas Are Confusing Or Contain 

Math Errors that Vastly Inflate Emission Estimates 

The new emission factor equations W-30, 31 and 32 in the final rule are confusing. 

Since these formulas were not included in the proposed rule, AGA did not have an 

opportunity to comment on them. Notably, Equation W-32 for non-custody city gate 

stations contains a math error that results in double counting annual hours of operation, 

thereby inflating emission estimates for non-custody-transfer city gate stations by a 

factor of 8,760. Specifically, Equation W-32 generates an annual emission factor (EF). 

Equation W-31 requires that this annual EF be multiplied by the annual hours of 

operation. Equation W-32 should be modified so that the EF that is calculated is an 

hourly emission factor 

Equation W-30 is also confusing. The formula and the final rule provisions that it 

references use terms such as “equipment leak source,” “facility” and “source” 

inconsistently to reference either components or leaks at a particular site or at the 

“facility” – which for purposes of the natural gas distribution source category 

encompasses the LDC’s entire statewide distribution system. This makes it impossible 

to understand what the company is supposed to be calculating – emissions per station 

or the sum of emissions from all stations? In addition, it is unclear how emissions from 

various component types are to be treated in the calculations. Equations W-30, W-32, 

6
and section 98.233(q)(8) and/or (r)(6) appear to be missing provisions or definitions that 

would explain what EPA intends to require. In addition, W-30 does not mesh properly 

with W-32, because Equation W-30 refers to “components,” whereas W-32 (which relies 

on the data used in W-30) refers to “meters” and “meter runs.” In EPA’s January 2011 

informal Q&A responses to AGA’s questions regarding the final rule, the Agency 

responded that the emission factor equations should be based on counts of “meter 

runs.” However, the disclaimer on EPA’s response makes it clear that AGA members 

cannot rely on this interpretation of the confusing provisions in the final rule: 

 “DISCLAIMER: Any communication on the GHG Reporting Program (GHGRP) is 

intended to provide general and administrative information about Part 98. This 

communication does not provide legal advice, and responses to questions 

received do not have legally binding effect or expressly or implicitly create, 

expand, or limit any legal rights, obligations, responsibilities, expectations, or 

benefits in regard to any person. Facility owners or operators and suppliers are 

responsible for determining how they would be affected by the requirements of 

the rule.” 

Since it is not possible for LDCs to determine what these equations in the final rule 

require, the remedy must be to revise the final rule so that it clearly explains what is or 

is not required under Equations W-30, W-31 and W-32, and to allow AGA and its 

members an opportunity to comment on the proposed changes to the equations before 

they are adopted in final form. 

4. New Electronic Reporting Form is Not Yet Available for 

Comment or Testing 

Stakeholders should be given the opportunity to comment and to have access to the 

reporting software to perform trial runs. Even if EPA fixes problems with the definitions 

and formulas, this will have no effect if the reporting software does not accurately reflect 

those changes. Stakeholders did not have an opportunity to review and comment on 

the forms and software during the comment period that ended on June 11, 2010. In 

fact, the forms and software are still not available for review. This is creating problems 

for reporting under other provisions of the Mandatory Reporting Rule (MRR) in addition 

to Subpart W. We need an opportunity to debug the system and perform quality 

assurance and quality control (QA/QC) testing to ensure that the software results in an 

accurate emissions report. Otherwise it will be impossible for Designated 

Representatives to certify with assurance that their company has filed an accurate 

report in compliance with the Subpart W Rule. 

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5. EPA Should Exclude Small Internal Combustion Sources, Not 

Just External Combustion 

Under the final rule, LDCs are required to report emissions under Subpart W if they 

operate a “distribution facility” (i.e. distribution system) that is estimated to emit 

methane from certain listed types of equipment equal to or exceeding 25,000 metric 

tons per year of CO2 equivalent (CO2e) emissions. If an LDC’s estimated system-wide 

methane leaks exceed this threshold, then it is required to report both estimated 

methane leaks from distribution equipment and combustion emissions -- carbon dioxide 

(CO2), methane (CH4), and nitrous oxide (N2O) from stationary combustion 

equipment.2

 Similarly, if an LDC or other company operates an underground storage 

facility whose methane and CO2 emissions from listed components exceed the 25,000 

ton per year threshold, then the underground storage operator is required to report both 

its estimated methane emissions and its combustion emissions from stationary fuel 

combustion equipment.3

 

In the final rule, EPA substantially expanded paragraph 98.233(z) beyond what 

appeared in the proposed rule. The effect of this change, plus changes at 98.232(i), (j) 

and (k) pertaining to gas distribution, appear to pull in a much broader spectrum of 

combustion units than would have been the case under the proposed rule. Under the 

proposed rule, only if the aggregate maximum rated heat input capacity of stationary 

fuel combustion units at a discrete facility totaled 30 mmBtu/hr or greater would there be 

a reporting obligation. The changes made to the final rule, again without opportunity for 

our members to review and comment, would appear to expand the reporting obligation 

to a much larger population of smaller units spread across the distribution system. 

EPA added a new exclusion from the reporting rule for small external combustion 

sources used in natural gas production or distribution that have a rated heat capacity 

less than or equal to 5 mmBtu/hr. AGA supports and appreciates this new exclusion for 

small external combustion sources. However, we do not understand why EPA excluded 

only external combustion sources such as small boilers, and did not also exclude small 

internal combustion sources such as small stationary engines and turbines with a rated 

heat capacity less than or equal to 5 mmBtu/hr, which equates to about 625 hp. Having 

                                                           

2

 See 75 Fed. Reg. at 74,498-90, 74,504; 40 C.F.R. §§98.231, (reporting threshold) 98.232(i)(6)(LDC 

requirement to report combustion emissions), 98.233(z) (method for calculating natural gas distribution 

combustion emissions). 

3

 See 75 Fed. Reg. at 74,489-90; 40 C.F.R. §§98.2 (reporting threshold), 98.232(f) (underground storage 

list of equipment and components), 232(k) (requirement for Subpart W facilities – other than production 

and distribution - to report combustion emissions under subpart C). 

8
to account for such small sources would impose a significant burden on LDC reporters 

that is not commensurate with the value of the data that would be provided. We note 

also that given the unusually broad definition of “distribution facility” – to encompass all 

distribution pipe and equipment operated by a gas utility across an entire state – this will 

sweep in thousands of small combustion units that would not be included in reporting 

requirements and burdens for other sectors – or for combustion facilities under Subpart 

C - where the definition of facility is limited to the traditional CAA concept of a 

contiguous property or plant site. AGA requests reconsideration of this new exclusion 

for small combustion sources and revision to include both small internal and external 

combustion sources, as well as to clarify that reporting of combustion emissions is only 

required where the aggregate maximum rated heat input capacity of stationary fuel 

combustion units totals 30 mmBtu/hr or greater at a discrete station site after the 

excluded units are deducted from emissions at that station. 

In addition, we do not understand why EPA provided no similar de minimis exemption 

for either internal or external small combustion sources operated at an underground 

storage facility. The final rule provides that the operator of an underground storage 

facility must report combustion emissions pursuant to 40 C.F.R. Part 98, Subpart C. 

Was it EPA’s intention to require an underground storage facility to report combustion 

emissions only if the combustion emissions from combustion sources at the 

underground storage facility independently exceed the 25,000 ton per year CO2e 

reporting threshold for Combustion Facilities under Subpart C? If so, section 98.232(k) 

should be revised to say this explicitly. If not, EPA should revise the final rule to provide 

a de minimis exemption for small internal and external combustion sources at 

underground storage facilities. 

6. The Rule Contains Conflicting Provisions Regarding Whether 

Emissions from Dehydration Units at Underground Storage 

Facilities Should or Should Not be Reported 

AGA requests reconsideration of sections 98.230 and 98.232 based on grounds that 

arose after the comment period on the proposed rule closed – and in fact arose after the 

publication of the final rule. AGA members believed they understood these provisions, 

as proposed and as finalized, but a recent pronouncement from EPA casts this in doubt. 

Based on this new pronouncement, we question whether it is possible to determine from 

the final rule whether or not emissions from dehydration units at natural gas 

underground storage facilities are required to be reported as underground storage 

facility emissions. Sections 98.230 and 98.232 contain potentially confusing statements 

in this regard. AGA members believe the rule was probably intended to exclude

emissions from such dehydration facilities, based on EPA’s explanation in the preamble 

9
that section 98.232 was intended to define specific emission sources that would be 

subject to reporting for a particular industry segment. Section 98.230(a) confusingly 

mentions dehydration units as included within the underground storage segment. But 

we have understood that section 98.232 is intended to limit the equipment sources 

actually subject to the reporting requirement for each segment. We have also 

understood that EPA included these listed sources in the section 98.232 reporting 

requirement because they were deemed to be significant contributors toward overall 

emissions in the segment. 

However, EPA’s recent response to AGA’s question 11(d) [EPA “Question Tracker 

479112”] in January 2011 has caused confusion, because it implies a different 

interpretation than the preamble and other EPA documents in the rulemaking record. 

 We asked whether or not to include dehydration emissions in reporting emissions for 

underground storage facilities, anticipating that the Agency would confirm that reporting 

is not required. Instead, EPA responded as follows, referencing 98.230 but ignoring the 

limitation in 98.232(f): 

“Response: Per 98.230(a)(5), natural gas underground storage processes and 

operations, including dehydration, are part of the definition of the underground 

storage segment. Therefore, if you have these processes at your facility, as 

defined in 40 CFR 98.6, you would be required to report on emissions from these 

dehydration units.” 

This informal Agency response contradicts the final rule preamble and Response to 

Comments document. AGA members had been relying on those documents to interpret 

sections 98.230 and 98.232. We understood that since dehydration units are not listed 

as being subject to the reporting requirement for underground storage facilities in 

section 98.232(f), the rule therefore does not require reporting dehydration emissions 

for this segment. If this is not the intent, then it is unclear what section 98.232 is 

supposed to achieve. 

The preamble and Response to Comments (RTC) support our interpretation that 

dehydration emissions are excluded from the reporting requirement. For example, the 

preamble to the final rule explains: 

“Reporters of an industry segment as defined by 40 CFR 98.230 would report 

emissions under subpart W only from the corresponding source types listed for 

that particular industry segment as defined in 40 CFR 98.232. For example, an 

onshore natural gas transmission compression reporter as defined by 40 CFR 

10
98.230(a)(4) would report emissions under subpart W only for sources defined in 

40 CFR 98.232(e).” 4

Similarly, the RTC explains: 

“EPA has clarified in today’s final rule that a segment shall report emissions from 

sources listed under that segment in Section 98.232 of the rule.”5 

“Today’s final rule covers all of the significant sources of emissions under each 

category source type, taking into consideration the reporting burden, and other 

relevant issues. Reporters only report emissions under subpart W from sources 

listed in Section 98.232 “GHGs to Report” for the specific industrial category for 

which the reporter’s facility qualifies. However, for threshold determination the 

reporter must combine emissions and follow the requirements of Section 98.2, for 

facilities that contain any source category for which calculation methods are 

provided.”6

Given EPA’s conflicting response to AGA, which references only 98.230 and ignores the 

limitation in 98.232(f), it seems that even EPA finds these provisions confusing. AGA 

requests reconsideration and revision of the rule to make it clear that operators of 

underground storage facilities (as well as transmission compression facilities) are not 

required to report emissions from dehydration units. 

III. Additional Requests for Relief Upon Reconsideration 

A. EPA Provides No Rational Explanation for Using Outdated, 

Inaccurate Emission Factors Rather than Modern, Updated Emission 

Factors 

In our comments on the Subpart W proposed rule, AGA urged EPA to use updated, 

modern emission factors as they become available. We noted that some updated 

emission factors are already available and should be adopted as approved default 

emission factors in the final rule. EPA declined to do so without adequate explanation. 

                                                           

4

 75 Fed. Reg. 74,462. 

5

 RTC, part 1, at 136 (pdf file page153 of 935). 

6

 RTC, part 1, at 67 (pdf file page 84 of 935). 

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Instead, the Subpart W Rule requires LDCs to use outdated emission factors to 

estimate their methane emissions. These old emission factors were developed over a 

decade ago by the Gas Research Institute (GRI) using data from testing a limited 

sample of equipment in work performed nearly 20 years ago. GRI developed the 

emission factors to facilitate a general estimate of nationwide methane emissions from 

gas distribution -- not for the purpose of estimating methane emissions from pipe and 

equipment used in an individual natural gas distribution system. 

Since that time, AGA member companies have been steadily reducing methane leaks 

and tightening their distribution systems through voluntary participation in EPA’s Natural 

Gas STAR program and mandatory compliance with continuously more stringent 

PHMSA regulations, resulting in fewer emissions. AGA and its members are supporting 

an ongoing joint research and field testing program with EPA and the Gas Technology 

Institute (GTI) (the successor to GRI) to develop updated, more accurate methane 

emission factors to facilitate more accurate GHG emission estimates for plastic 

distribution pipe, metering and regulator (M&R) stations and other natural gas 

distribution equipment. GTI’s Operations Technology Development (OTD) group issued 

a report in November 2009 providing a new updated emission factor for metering and 

regulating (M&R) stations that could be used to simplify and improve the accuracy of 

emissions reporting for above and below ground regulator stations. This could be used 

instead of the confusing and contradictory provisions in the final rule for “non-custodytransfer city gate stations.” AGA referenced this new emission factor in our June 11, 

2010 comments, and AGA member company National Grid provided a link to the OTD 

web site, where they told EPA the M&R emission factor report is available for free 

downloading. 7

 

In November 2010, in response to a request from the Agency, AGA submitted a list of 

our members’ priority questions regarding the final Subpart W Rule. In our question 

number 6 (EPA Question Tracker 479106), we submitted an electronic copy of the OTD 

emission factor report and asked whether EPA would consider changing the rule to 

incorporate the new OTD emission factor for regulator stations. EPA responded that it 

would take the submission into consideration in any future rule revisions, which we 

appreciate. However, the Agency also responded that it did not receive this data until 

November 2010. This is incorrect. AGA described the new emission factor in our 

comments, and our member National Grid provided a web link to the report in 

comments filed June 11, 2010, within the comment period. 

AGA requests that EPA allow the use of this new, more accurate emission factor for 

regulator stations upon reconsideration of the Subpart W Rule. In addition, we request 

                                                           

7

  For your convenience, here is the direct link: http://media.godashboard.com//gti/77b_OTD-10-

0002_GHG_Emission_Factors_FinalReport_v2.pdf 

12
that EPA revise the rule to facilitate expeditious adoption of other new emission factors 

as they are developed, including a new emission factor for buried plastic pipe that 

should be complete within the next two years. 

B. The Definition of Distribution “Facility” is Overbroad and Confusing 

The Subpart W Rule defines “Facility with respect to natural gas distribution for 

purposes of [Subpart W] and Subpart A” to mean: 

“the collection of all distribution pipelines, metering stations, and regulating 

stations that are operated by a Local Distribution Company (LDC) that is 

regulated as a separate operating company by a public utility commission or that 

are operated as an independent municipally-owned distribution system.” 

40 C.F.R. §78.238, 75 Fed. Reg. at 74,511. There are several problems with this 

definition. First, it is confusing. In discussing the reporting requirements for LDCs, both 

the Agency and our members find it difficult to avoid confusion when discussing 

requirements for individual locations – what one normally calls a facility – and the 

reporting system-wide “facility” as defined in the rule. Second, it is not clear whether a 

gas utility that operates distribution systems in multiple states - but subject to the 

regulation of a different public utility commission in each state - should count that multistate operation as a single “facility” or should count operations in state A as one “facility” 

and operations in state B as a second “facility.” Third, most LDCs are served by 

affiliate or interstate transmission pipelines, and the definition of a distribution facility as 

an LDC, which is regulated as a separate company by a Public Utilities Commission 

(PUC) is designed to fit that business model. However, California utilities and some 

other AGA members operate both transmission and distribution systems. The definition 

of a distribution facility needs to be clarified to determine the specific operations that are 

included in it. Fourth, by using such a broad definition of natural gas distribution 

“facility” – to include virtually everything operated by an LDC – the Agency has 

effectively set a far more stringent applicability threshold for LDCs than it has for all 

other sectors (other than for production, where EPA adopted a multi-state, geologic 

basin-wide definition of “facility.”) EPA has not provided satisfactory response to our 

detailed comments on this issue, and we believe there are more workable approaches 

that could be used. AGA requests reconsideration of the natural gas distribution 

“facility” definition. 

13
C. It Was Arbitrary and Capricious for EPA to Create a Subpart W 

Reporting Regulation for a Null Set – LNG Storage Facilities Will Not 

Exceed the 25,000 ton per year Threshold 

EPA’s Subpart W Rule creates an elaborate regulatory program for a null set. Liquefied 

natural gas (LNG) satellite and peak shaving facilities – defined as “LNG Storage 

Facilities” in the Subpart W Rule – are much smaller than LNG import and export 

terminals. They have far fewer combustion sources and components. As AGA 

demonstrated in its June 11, 2010 comments on the proposed rule, even if every 

combustion source operated at maximum throughput for vaporization and liquefaction 

systems and every component leaked methane (thus requiring the use of leaker 

emission factors for all components) the collective carbon dioxide equivalent emissions 

from even the largest LNG satellite or peak shaving facility could not exceed the 25,000 

metric ton per year threshold. And in fact, these facilities emit far less than one half of 

this worst case emissions scenario, because the combustion sources actually operate 

about one third of the year or less, and almost no components actually leak. 

We appreciate EPA’s creation of an applicability tool to help operators of these facilities 

determine that their facilities could not possibly exceed the applicability threshold. 

However, we did not have an opportunity to comment on this applicability tool, because 

it was created after the comment period ended. We are concerned that it could be used 

to infer that these facilities actually emit greenhouse gases at ‘worst case’ levels, which 

could be used to mislead policy makers as they evaluate future climate emission 

reduction programs. Further, it makes no sense to require facility operators to go 

through the effort to prove repeatedly what is already known: that LNG satellite or peak 

shaving (storage) facilities would not exceed the applicability threshold even if 

operated in a manner that would never be tolerated by other regulatory agencies or 

company shareholders. Creating a regulatory program for a null set is a classic 

example of wasteful, unnecessary and arbitrary and capricious rulemaking. EPA should 

revise the Subpart W rule to exclude LNG storage facilities – i.e. LNG satellite and peak 

shaving facilities. 

D. It Was Arbitrary and Capricious for EPA to Create a Subpart W 

Reporting Regulation for LNG Import and Export Facilities – Which 

Have Only Minimal Methane Leaks 

Nearly all of the greenhouse gas emissions from LNG import and export facilities come 

from combustion emissions, not methane leaks. As AGA explained in our June 11, 

2010 comments, for operational reasons, these facilities must be very tight. Almost no 

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components leak. If combustion emissions exceed the 25,000 metric ton per year 

threshold, these facilities are already required to report CO2 emissions vented from 

reciprocating compressor (engines) or centrifugal compressors (turbines) under Subpart 

C. Why then create an additional regulatory burden on these facilities under Subpart W 

to conduct extensive on-site leak surveys to chase negligible methane leaks from 

valves, pump seals and other equipment? This will impose significant costs and 

resource demands to conduct on- site methane leak surveys to report truly negligible 

methane emissions. EPA has offered no rational explanation for requiring such a 

waste of resources to chase minimal emissions data. 

IV. CONCLUSION 

For the reasons discussed above, AGA urges EPA to reconsider the provisions in 

Subpart W applicable to natural gas distribution and underground storage facilities. 

AGA also urges EPA to stay the effectiveness of those provisions in Subpart W pending 

reconsideration, pursuant to the APA standard for an Agency’s administrative stay of a 

final rule. 

Dated March 2, 2011 

Respectfully submitted, 

American Gas Association 

By: ____________________________ 

Pamela A. Lacey 

 Senior Managing Counsel, Environment 

 American Gas Association 

 400 North Capitol Street N.W. 

 Washington, D.C. 20001 

placey@aga.org

 (202) 824-7340 

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