Energy trade groups are calling proposed U.S. Environmental Protection Agency emissions rules unnecessary, citing the industry’s success in stemming emissions. The statements followed the EPA’s Aug. 18 announcement of standards intended to further cut the release of methane and volatile organic compounds from oil and gas facilities.
The EPA proposals call for:
- Finding and repairing leaks;
- Capturing gas from completion of hydraulically fractured wells;
- Limiting emissions from new and modified pneumatic pumps; and
- Limiting emissions from equipment used at compressor stations, including compressors and pneumatic controllers.
The announcement was the first part of a three-step process that could place a new mandate on the industry by the middle of 2016. Other announcements would come late this year.
“Methane emissions have fallen 38 percent since 2005 even as natural gas production soared by 26 percent. Those reductions were the result of industry innovation and voluntary measures,” Kathleen Sgamma, vice president of government and public relations for the Denver-based Western Energy Alliance, told reporters. “Now EPA wants to glom onto that success by adding costly red tape.”
The American Petroleum Institute (API) said the proposed rules are “duplicative, costly, and undermine America’s competitiveness.” The API also said that the industry has achieved significant reductions in methane releases.
“The oil and gas industry is leading the charge in reducing methane,” said Jack Gerard, API president and CEO. “The last thing we need is more duplicative and costly regulation that could increase the cost of energy for Americans. Even as oil and natural gas production has surged, methane emissions from hydraulically fractured natural gas wells have fallen nearly 79 percent since 2005, and CO2 emissions are down to 27-year lows. This is due to industry leadership and significant investments in new technologies.”
Barry Russell, president and CEO of the Independent Petroleum Association of America, also criticized the EPA move.
“The administration is proposing a costly and complicated regulatory program for few environmental benefits,” Russell said. “The unnecessary costs and added uncertainty resulting from the administration’s proposals could inflict more pain on the men and women who work in the oil and gas industry—at a time when market forces are already creating economic challenges.”
In the midstream, the Interstate Natural Gas Association of America (INGAA) also pointed to major cuts in methane emissions in its reaction to the EPA announcement, saying the gas transmission industry has reduced the number of leaks on gas pipelines by 94% in the last 30 years.
Don Santa, INGAA president and CEO, called on the EPA “to get a better idea of both the volume of methane released in the atmosphere and the sources of those releases” before setting any new standards. If well completions and frack jobs are a concern for upstream producers, then EPA-proposed pipeline replacements and construction-related blowdowns are a priority for midstream operators.
“While a critical and necessary component of pipeline construction and maintenance activities, pipeline blowdowns (which would be measured as part of the EPA reporting requirements) contribute to methane releases from transmission pipelines. This is one of the reasons why widespread replacement of pipeline will not significantly reduce releases from natural gas transmission pipelines, The pipe itself is not the source of material releases and its replacement may in fact result in greater releases,” Santa said. He then called on government agencies to work together on air-quality issues.
“As a result, we believe it’s important for the EPA to work with the federal pipeline safety regulator, the Pipeline and Hazardous Materials Safety Administration, to reduce the number of occasions where blowdowns will be required in order to comply with pipeline inspection requirements,” he said.
“INGAA and its members are involved in research efforts to develop pipeline integrity management practices and new in-line inspection tools that reduce the number and volume of blowdowns, including those in connection with testing the material strength of pipelines, and therefore reduce the amount of methane emissions.” Santa added.
EPA said the proposed rules are part of a broad Obama administration effort to slice methane emissions in the sector by 40 to 45% below 2012 levels in the next decade.
It said the proposed methane standards are expected to reduce the equivalent of 7.7 million to 9 million metric tonnes equivalent of carbon dioxide in 2025. The heat-trapping ability of methane is rated 25 times as great as carbon dioxide.
The release of the proposed oil and gas industry standards comes about two weeks after the EPA unveiled the final version of its Clean Power Plan, a sweeping rule that aims to cut carbon emissions in the U.S. from the power sector to 32% below 2005 levels by 2030 through tailored state targets.
“Through our cost-effective proposed standards, we are underscoring our commitment to reducing the pollution fueling climate change and protecting public health while supporting responsible energy development, transparency and accountability,” said EPA Administrator Gina McCarthy.
The emissions rules may not be as onerous as many in the industry fear, industry analysts at Barclays said in an Aug. 19 research report.
“We see these new standards as manageable from a cost perspective and unlikely to materially affect natural gas production levels in the U.S.,” the report said. “A number of technologies are currently in use have the ability to limit methane emissions. Most of these have relatively reasonable upfront costs and, depending on natural gas price levels, pay-back periods below three years.
“New regulations will increase compliance costs for companies, but we do not see these as being large enough to take certain production volumes from the market,” Barclays added. It pointed to state emissions regulations in Colorado that have proved less costly to meet than many in the industry had feared when they took effect in 2014.
The proposed standards build on a voluntary EPA program that enables oil and gas companies to pledge commitments to lower their methane emissions. Meanwhile, environmental groups have complained that those voluntary measures fail to address a projected growth in methane emissions of more than 25% by 2025.
The American Gas Association referred to a new study done by Washington State University found that gas emissions from local distribution systems decreased sharply in the last 20 years and are 36 to 70% lower than the EPA’s Greenhouse Gas Inventory from 2011. AGA said the study found only 0.1% of the gas delivered is emitted from local distribution systems. The study was published in the journal Environmental Science & Technology.
Separately, the Gas Processors Association (GPA) responded to a study entitled “Methane Emissions from United States Natural Gas Gathering and Processing” released by the Environmental Defense Fund and distributed in the same trade publication.
“We are encouraged that this study shows much lower emissions on the processing side,” said Mark Sutton, GPA president and CEO. “The study shows that the processing sector has [fewer] emissions than EPA’s Greenhouse Gas Inventory, which is the national inventory of greenhouse gas emissions that EPA conducts across industry segments.
Contact the author, Paul Hart, at firstname.lastname@example.org.