Document ID: EPA-HQ-OAR-2010-0505-7647
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2016-06-03T04:00Z

We believe that moving to quarterly LDAR for gas well sites and high-GOR oil wells would yield additional reductions that are cost-effective, net-beneficial; and that such an approach is implementable and supported by the record.  
 Cost-Effectiveness: According to EPA's TSD and RIA, quarterly monitoring is highly cost-effective. At a quarterly LDAR frequency, the cost/ton of CO2e is $728 and $1,686 for gas and oil sites, respectively. However, because LDAR for low-GOR wells is less cost-effective than gas and oil wells because of their lower emissions, we propose retaining semiannual LDAR for these sites. 
 Additional Emissions Reductions: This alternative would capture an additional 1 to 2 million metric tons CO2e annually, achieve an additional 10 MMTCO2e of cumulative reductions between 2020 and 2025 (and more thereafter), and would be net beneficial in 2025, even when not accounting for the benefits of VOC and HAP reductions.  
 Net Benefits: EPA's break-even analysis makes clear that quarterly LDAR for all well sites (Option 3) would be net beneficial if the very significant benefits of reducing emissions of VOCs and HAPs were appropriately considered, and accordingly quarterly LDAR for all well sites except semiannual for low-GOR wells would be even more net beneficial.
 Implementation: As EPA already makes a distinction for low-GOR in other sections of the rule (and proposes to do so in the ICR), we find this alternative reasonable. Well sites that are determined to be low-GOR are exempted from making well-completions. The agency notes that this determination can be made in advance of a well completion, and that same determination could serve to categorize wells for LDAR frequency. Additionally, the agency makes the same distinction in its draft ICR, noting that it already has "estimates of the gas-to-oil ratio (GOR), from which we designate well type, for nearly all wells" and is taking comment on using GOR to stratify wells into different categories which impact "types of processes or equipment present at the site and the magnitude of emissions from these sources."  To address implementation concerns related to weather, the rule could include an exemption for quarterly for weather reasons, as is done for compressor sites.
 Record Support: Industry comments on the current use of low-GOR to differentiate wells for well completion requirements were universally supportive, and major industry associations -- API, Western Energy Alliance, American Exploration and Production Council, Idaho Petroleum Council, Independent Petroleum Association of New Mexico, La Plata County Energy Council, Montana Petroleum Association, New Mexico Oil and Gas Association, North Dakota Petroleum Council, Oklahoma Independent Petroleum Association, and Utah Petroleum Association -- urged EPA to use the low-GOR distinction in the LDAR context as well to categorize wells, arguing that wells with low-GOR produce lower emissions (and they urged that these wells be entirely exempted from LDAR).
 Additional Considerations: 
 Using GOR to put wells into categories that determine LDAR frequency would be similar to the tiered approach that Colorado and Utah use in order to achieve greater emission reductions  -  Colorado sorts wells based on VOC emissions, and Utah sorts wells based on throughput. 
 Retaining low-GOR wells at semiannual is appropriate since they emit fewer emissions than the other two well types and therefore they have a higher cost per ton of abatement. (see table below)

                                  Model Plant
                       Baseline CH4 Emissions (Tons/yr)
Gas Well
                                                                           5.50
Oil Well (GOR < 300)
                                                                           1.23
Oil w/ Associated Gas
                                                                           2.75