1

Date: May

27, 2010 Listed below is further information about methods used by the U.S. Inventory

of Greenhouse Gas Emissions and Sinks as well as Natural Gas STAR present ations and documents that cite i nventory information.

 Question : Can you elaborate o n the reference for methane emissions pie charts used in Natural Gas STAR Presentations ? o Response: C onsult the Energy section (Section 3) and Sections 3.4 and 3.5 of the Annexes in the 2007 U.S. Inventory found at epa.gov/climatechange/emissions/usgginv_archive.html

. The individual source categories and their methane emissions begin on page A
- 143 for natural gas and page A

- 151 for petroleum in Annex 3
. The Annex more thoroughl y covers the methodology used to arrive at the results in Section 3.

 Question : Why

are REC reductions greater than the entire inventory number for well completions ? o Response: Presently , REC reductions reported in the Natural Gas STAR body of work is large r than well completion venting in the inventory on an annual basis. Section 3 of the inventory discusses improvements and future plans for each sector. For the natural gas industry , the planned improvements are discussed on pg. 3
- 46. For the petroleum i ndustry , the planned improvements are discussed on pg. 3
- 51. In a New York Times article published on October 15, 2009, it is mentioned that the EPA is currentl y reviewing and revising methane emissions from U.S. gas wells . As a result, the EPA found that the amount emitted by

routine operations at gas wells is approximately 12 times larger than the existing estimate of 9 Bcf. The NYT article can be found here at www.n yt imes.com/2009/10/15/business/energy

environment/15degrees.html#

. EPA has included these revised emission numbers in the upcoming Mandatory

Reporting Rule (MRR). Specificall y, these new numbers are in the T echnical Support Document (TSD), explained in Appendix B (pgs. 79
- 85). On page 82, the new 2007 U.S. emissions from well completion and workover venting is approximately 120 Bcf. The TSD can be found here at www.epa.gov/climatechange/emissions/downloads10/Subpart

W_TSD
- 022310.pdf

.
 Question : Why

are Natural Gas STAR methane emissions reductions accounted for entirel y in the natural gas s ys tems sector of the inventory and not at all in the petroleum sy stems sector ?2 o Response: The methodology in Annex 3 of the inventory indicat es how Natural Gas STAR reductions are applied to the natural gas s ys tems sector. Natural Gas STAR considers data at the level of the production sector, rather than further div iding its reporting into natural gas and petroleum. At the same time, the inventory considers data at the level of natural gas sy stems production & petroleum sy stems production. Often a Natural Gas STAR reduction activity

straddles both natural gas sy ste ms and petroleum sy stems and is therefore inherentl y an overall production sector activity. The Natural Gas STAR production sector reductions are not further deconstructed and are thus applied to natural gas sy stems production sector. For example, vapor recovery units (VRUs) can be installed on both condensate (gas) and storage (oil) tanks, but it is not a Natural Gas STAR reporting requirement to specify which.

 Question : How can natural gas and petroleum s ys tems methane emissions be expressed as a perc entage of total gas throughput entering and exiting the national supply chain ? o Response: This percentage is not a published statistic but can be roughl y calculated from public sources such as the inventory and such as EIA gas production data. It is also important to understand numerical treatment of gas imports and exports, NGL imports and exports, gas reinjected, gas consumed on site, gas unaccounted for d ue to intrinsic metering errors, and distinguishing between methane versus natural gas data, which a ll have first order effects on the resulting percentage. Any result using this calculation method would not apply to an y specific site given the top

down nature of the calculation. To estimate the percentage of gas lost from both the oil and gas industry , two public sources are used: 1) information from the Energy Information Administration (EIA) and 2) the Technical Support Document (TSD) for the MRR. The equation shown below illustrates how the percentage can be calculated.

Where: % gaslost = Es timated percentage lost fro m produced gas due to methane emissions E Total,2006 = 2006 revised m ethane emissions for petroleum and gas, all sectors (with reductions) , from TSD which

2006 , Pr 2006 , 2006

, % oduction

Gross Total gaslost E W E  3 includes revised estimation methods for well completion emissions W Gros s,2006 = EIA 2006 gross gas withdrawals E Production,2006 = 2006 revised methane emissions for petroleum and gas production (with reductions) from TSD which includes revised estimation methods for well completion emissions The term E Production,2006 in the denominator of the above equation was included because the gross withdrawals, W Gr oss,2006 does not account f or the original amount of gas produced from a given well. This is because W Gross,2006 is based on meter readings which ty pically occur as the gas exits the production site, after it has encountered all production equipment that contribute to method emissions . Therefore, the emissions from the production sector must be added back in to truly have the entire amount of gas withdrawn from wells. B oth revised TSD terms in the equation include Natural Gas STAR reductions and were calculated from consulting page 9 of the TSD and subtracting out the 2006 reductions listed in Table A
- 123 on page A
- 151 of the 2008 U.S. Inventory Annex 3. A summary

table is shown below and gives the value of each equation term along with the calculated percentage of gas lost in the petroleum and gas industry due to methane emissions. Determination of Gas Lost Due to Methane Emissions in the Oil and Gas Industries Equation Term Calculation of Term MMtCO2e E Total,2006 257.2 MMtCO2e from gas 1 + 26.3 MMtCO2e from oil 1

– 45.8 MMtCO2e NGS reductions 2 237.7 W Gross,2006 23,535,018 MMcf3 converted to 9519.0 MMtCO2e 9519.0 E Production,2006 0.66(257.2 MMtCO2e) 4 + 0.97(26.3 MMtCO 2e) 4

– 30.8 MMtCO2e NGS production reductions 5 164.5

Percentage of gas lost 2.45% 1 MR R. Technical Support Document. page 9. www.epa.gov/climatechange/ emissions/downloads10/Subpart
-W_TSD
- 022310.pdf 2 EPA. Inventory of U.S. Greenhouse Ga s Emissions and Sinks: 1990
- 2008

. Annex 3: Section 3.4. Table A
1 23 : CH 4 reductions derived from the Natural Gas STAR Program http://www.epa.gov/climatechange/emissions/usinventoryreport.html 2,182 Gg x 10 9 g/Gg x 21g CO 2 /g CH 4 x Mg/10 6 g x MMtCO2e/10 6 Mg = 45.8 MMtCO2e 3 EIA website: www.eia.doe.gov/dnav/ng/ng_prod_sum_dcu_NUS_a.htm

23,535,018 MMcf x 10 6 cf/MMcf x 19.26g/cf x 21g CO 2 /g CH 4 x Mg/10 6 g x MMtCO2e/10 6 Mg = 9519.0 MMtCO2e 4 MRR. Technical Support Document. page 9. www.epa.gov/climatechange/emissions/downloads10/Subpart
-W_TSD
- 022310.pdf

- Gas production emissions account for 66% of total methane emissions from gas industry = 169.8 MMtCO2e4 - Oil production emissions accou nt for 97% of total methane emissions from oil industry = 25.5 MMtCO2e 5 EPA. Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990
- 2008. Annex 3: Section 3.4. Table A
123: CH 4 reductions derived from the Natural Gas STAR Program http://www.epa.gov/climatechange/emissions/usinventoryreport.html

1,469 Gg x 10 9 g/Gg x 21g CO 2 /g CH 4 x Mg/10 6 g x MMtCO2e/10 6 Mg = 30.8 MMtCO2e Notes: MMtCO 2 e = million metric tonnes carbon dio xide equivalent MMcf = million cubic feet Gg = gigagrams Mg = megagrams

 Question : Are changes/updates to the national inventory tracked every

year? Why would previous year results change? o Response: Yes, for each annual inventory cycle, the entire time series is considered and updated. The entire time series of 1990 to the present reporting year is updated annually because revised activity data is applied as it is available. It is not uncommon for EIA or other data sources to issue revised estimates f

or years in the recent past, and such revisions are tracked b y the inventory . Any changes in the data sources used are be noted in the executive summary and introduction sections of the inventory

.