American Oil and Gas Reporter - February 2015 - 31

WASHINGTONWATCH
Administration's
Methane Emissions Goal
Is Wrong Approach
It's no secret that the Obama administration has been intent
on tackling greenhouse gas emissions. The administration also
has been clear in targeting the fossil energy industry when addressing GHG emission reductions. But the Jan. 14 announcement
(see story page 46) of its intent to cut methane emissions from
the oil and gas sector by 40-45 percent from 2012 levels by 2025
appears misguided from scientific and policy standpoints.
Methane emissions from oil and natural gas production account
for 1.1-1.3 percent of total U.S. GHG emissions. That small contribution has been declining, even as production has increased.
The Environmental Protection Agency's GHG reporting program
notes that "reported methane emissions from the petroleum and
natural gas systems sector have decreased by 12 percent since
2011." EPA found that the largest reductions came from hydraulically fractured natural gas wells, "which have decreased by
73 percent during that period," with further reductions expected.
U.S. Energy Secretary Ernest Moniz notes that half of "current frac jobs are so-called green completions, where the
methane is captured and used for economic benefit." These newer wells are more energy efficient and provide the means for producers to collaborate with states in their efforts to reduce emissions. Replacing high-bleed pneumatic devices and other management operations are activities contributing to this success.
But that is not the picture on which EPA focused in determining
to push for broad new regulatory actions. EPA projects that emissions from the oil and gas sector will rise more than 25 percent
without additional steps to lower them. It's not clear where that
projection comes from. Older wells are retiring, and newer wells
are being brought on. Recent history confirms that increased production can take place alongside decreases in methane emissions.
Yet EPA's regulatory initiative relies on this questionable projection.
EPA will initiate a rule-making effort to set standards for
methane and volatile organic compound emissions from new and
modified oil and natural gas production sources, as well as natural gas processing and transmission sources. A proposed rule is
scheduled to be issued this summer, followed by a final rule in 2016.
Some of the proposed standards will go hand-in-hand with natural gas pipeline safety standards being promulgated by the Department of Transportation's Pipeline and Hazardous Materials
Safety Administration, which are scheduled for publication in June.
Regulations focusing on methane also will be forthcoming
from the Department of Interior's Bureau of Land Management,
which will be updating standards for new and existing wells on
public lands.
With new wells already leaning toward green completions, the
administration acknowledges that fully achieving its goal will require action on existing sources of methane emissions. This would
be accomplished through Section 111(d) of the Clean Air Act.
This approach poses serious concerns for the oil and natural
gas industry. To begin, the measure is an ineffective way to target small GHG-emitting sources such as oil and natural gas wells,
and would require immense agency resources for few methane
emission reduction benefits. It is unlikely that state regulators or

"The Jan. 14 announcement
appears misguided from scientific

and policy standpoints.

EPA have the capacity to deal with the influx of permit requests
or compliance requirements for these sources. If the standard cannot even be implemented properly, how will it be effective in reducing emissions?
These challenges are compounded by EPA actions to revise
the National Ambient Air Quality Standard for ozone, which also
relies on states for implementation. Because regulating VOCs is
a part of ozone regulations, action on VOCs and ozone will reduce methane emissions also. If EPA pursues additional action
on methane against oil and natural gas exploration and production activities, it will be implementing duplicative and costly plans
to target the same emissions.
EPA should take a simpler approach, similar to what the agency
has done to manage manure in the agriculture sector, which is an
activity that accounts for roughly the same level of emissions as
those from oil and natural gas production activities. Here, the administration proposed the Biogas Opportunities Roadmap,
which avoids a prescriptive regulatory regime-potentially targeting
every cow or every farm-and instead commits exclusively to voluntary industry efforts to reduce methane emissions. Likewise,
EPA should identify some agreed on, cost effective, and voluntary steps to further reduce methane emissions from oil and natural gas beyond existing requirements.
A clear, effective, and reliable regulatory framework is critical to the future development of both America's vast energy resources and protecting our environment. The oil and natural gas
industry already has implemented effective emission-reduction
measures, and as the EPA itself has stated, emissions are declining. Adding burdensome, duplicative methane regulations is the
wrong answer: for this industry, the administration, and the environment.
Ì

SUSAN GINSBERG is vice
president of crude oil and natural gas regulatory affairs for
the Independent Petroleum
Association of America. She
covers legislation and regulation, focusing on the CFTC
and FERC. Her experience in
natural gas regulatory affairs
spans 25 years.
FEBRUARY 2015 31

American Oil and Gas Reporter - February 2015

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