American Oil and Gas Reporter - February 2015 - 46

Methane Emissions

White House Releases Control Strategy
By George O. Wilkinson
and Jordan Rodriguez
HOUSTON-The Obama administration has taken additional steps to regulate
methane emissions from oil and gas operations. Methane was the focus of the administration's March 2014 Climate Action
Strategy to Reduce Methane Emissions.
On Jan.14, the administration added details to that plan by announcing its intention to cut methane emissions from the oil
and gas sector by 40-45 percent by 2025,
using 2012 methane emissions as a base
line. The January announcement adds
detail to the administration's March 2014
strategy.
The Jan. 14 plan requires several federal agencies to propose standards and programs to reduce methane emissions. The
Environmental Protection Agency is to expand its regulations targeting volatile organic compounds. EPA also will propose
New Source Performance Standards under the Clean Air Act that will apply to
methane emissions from new and modified oil and gas production, gas processing, and gas transmission sources, and will
pursue voluntary partnerships with industry and states to reduce methane emissions
from existing oil and gas operations.
The administration's plan also calls for
the Bureau of Land Management and the
Department of Transportation to propose
new standards and programs later this year
to reduce methane leaks from natural
gas transportation and distribution. EPA
will propose its new standards for methane
this summer and expects to issue a final
rule by the end of 2016.
Prior Emission Controls
EPA promulgated VOC regulations in
2012 as an NSPS for the oil and gas sector. The standards apply only to sources
constructed or modified after Aug. 23,
2011. The 2012 VOC rule, which will be
fully implemented and effective on April
15, requires compliance with leak detection and repair standards. Sources subject
to the rule include well completions, reciprocating and centrifugal compressors
and pneumatic controllers, and equipment leaks from natural gas processing
plants, storage vessels and sweetening
units at natural gas plants.
Most of these sources are required to
be in compliance already. While the rule
was aimed at controlling VOC emissions,
it also resulted in significant methane reductions as a "co-benefit."
46 THE AMERICAN OIL & GAS REPORTER

Even before most requirements of the
VOC rule became effective, voluntary industry efforts had resulted in substantial
methane reductions across the oil and gas
sector. According to EPA's 2014 Inventory of Greenhouse Gases, methane emissions fell 17 percent from 1990 to 2012.
Reported emissions declined 12 percent
between 2011 and 2013, with the largest
reductions occurring at hydraulically fractured natural gas wells, where emissions
fell 73 percent. EPA expects further reductions will be achieved on full implementation of the 2012 rule.
Despite this progress, environmental
groups have insisted that the VOC rule is
not sufficient to achieve the administration's methane reduction goals because it
addresses only new and modified sources,
while omitting segments of the natural gas
value chain that several studies claim to
show emit substantial methane. These
groups have pressed EPA to issue methanetargeting regulations that would apply to
both new and existing sources. However,
EPA has declined to propose regulations
for existing sources up to now.
Clean Air Act Regulation
EPA has committed to issuing additional methane control regulations for new and
modified sources in the oil and gas sector.
The plan states that the rule will cover well
completions, pneumatic pumps, leaks at
oil and gas well sites, gathering and
boosting stations, and compressor stations.
The Obama administration acknowledges that the VOC regulations and industry-led efforts have resulted in substantial
methane reductions, but it claims additional, direct regulation is needed to avoid a
projected 25 percent rise in methane
emissions from the sector by 2025 as a result of the continued expansion of U.S. oil
and gas and operations.
Last April, EPA issued for peer review
five white papers that identified methane
emission sources and potential controls for
oil and gas production and transportation
operations. The white papers provide an
indication of the direction EPA is likely to
take on the new and modified source regulations.
When commenting on the white papers,
many industry stakeholders argued that
new regulations for methane were unnecessary, and urged the administration to rely
instead on existing VOC regulations and
several voluntary programs that had
achieved significant methane reductions.
The methane strategy announced in

January confirms that, for the present, EPA
will not set methane-specific standards for
existing sources. EPA will, however, issue
control technology guidelines (CTGs)
for VOC emissions as a means to achieve
methane co-benefits at some existing
sources. These guidelines likely will include recommendations to state regulators
on how to control existing oil and gas sector VOC sources, but only in current
ozone nonattainment areas and in the
few states located in the Ozone Transport
Region.
Under current ozone standards, the
short-term impact of the CTGs is limited.
However, the CTGs may play a more significant role if EPA finalizes its proposal
announced in November for more stringent
ozone standards, which may result in
many more areas of the country falling into
nonattainment status (see "EPA Proposes
Lower Ozone Standard," AOGR, January
2015, pg. 36).
Administration officials have said they
expect voluntary industry efforts and
state-initiated regulation to reduce the need
for future existing-source regulations. As
examples of these measures, the plan
cites two initiatives: the ONE Future Initiative and the Downstream Initiative.
Both involve collaboration among EPA,
DOT, the Department of Energy and industry to develop a regime for monitoring, reporting, and verifying methane emissions
across the natural gas value chain. In addition, EPA plans to expand its Natural Gas
STAR Program by launching a new partnership with industry stakeholders this
year.
Anticipated Requirements
Details of the administration's plans to
achieve its ambitious methane reduction
goals will not be known until EPA proposes standards this summer. However, EPA
released five white papers last April that
likely will serve as the technical basis and
justification for the new regulations. The
white papers provide insight into the
types of equipment and processes EPA
may seek to regulate under its new standards, as well as the types of technology
it believes will allow companies to achieve
its goals.
The white papers identify five subsectors as potentially significant sources of
methane and VOC emissions:
* Leaks from onshore natural gas
operations;
* Compressors;
* Completions and ongoing produc-

American Oil and Gas Reporter - February 2015

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