Methane emissions from hydraulically fractured natural gas wells in the United States have dropped by nearly 79% since 2005. Total methane emissions have dropped by 11%.

Companies are capturing natural gas at the wellhead after a well is completed instead of flaring it, capitalizing on what could have been wasted gas.

Proactive states—including Colorado, Ohio and Wyoming—have taken matters into their own hands by successfully implementing monitoring and repair programs.

Despite these efforts, the oil and gas sector remains one of the largest contributors of methane emissions, next to the agriculture industry. Data from the U.S. Environmental Protection Agency (EPA) estimate that methane emissions from oil and gas production, as well as natural gas processing and transmission, were 148.3 million metric tons carbon dioxide equivalent in 2013. The potent greenhouse gas—the main component of natural gas, a threat to public health and a contributor to climate change—has escaped from oil and gas sites as a result of both unintentional leaks and intentional venting.

A proposed rule unveiled recently aims to slash methane emissions from such sites by 40 to 45% from 2012 levels by 2025.

For the oil and gas sector, this could bring change to daily operations—at least for the companies that haven’t already put forth the effort. The proposal requires operators to find and repair leaks, capture natural gas from the completion of hydraulically fracked wells, lower emissions from new and modified pneumatic pumps and reduce emissions from equipment such as compressors and pneumatic controllers.

The proposed standards would apply to new well sites and modified well sites. The final rule would take effect 60 days after its publication in the Federal Register.

Views Vary

No one seems to question the fact that methane emissions are bad and that developing hydrocarbon resources responsibly is a must. But the proposal—another in a series of regulations targeting the sector—has industry groups on the defense again.

“Our industry has voluntarily led the way in its pursuit of improved operations to safely maximize the recovery and capture of these valuable oil and gas resources,” Matthew Todd, senior policy advisor for the American Petroleum Institute, said in testimony during an EPA public hearing on the regulations in Dallas. “We’re incentivized to do that, and many of these leading technologies that have been broadly used by industry were subsequently incorporated by EPA in its Natural Gas STAR program.”

He cited the improved emissions statistics, noted how a 2012 final rule indirectly governs methane by regulating “natural gas a surrogate for volatile organic compounds.” He called the EPA standards unnecessary.

Others disagree.

“There is no doubt that there are some companies that are taking a leadership role on that, and we applaud them for it,” Drew Nelson, senior manager, natural gas, for the Environmental Defense Fund (EDF) told Hart Energy. “But even with the actions that companies are taking, you can reduce emissions by 40%.”

Anyone wanting to have their say on the proposed regulations has until Nov. 17 to do so. The EPA said it plans to issue a final rule in 2016 after reviewing the public comments, including those made during three public hearings held in Dallas, Denver and Pittsburgh.

As the EPA moves to address new source performance standards, the Bureau of Land Management (BLM) is seeking comment on its plan to limit venting and flaring of natural gas on public lands. Speaking during a Christian Science Monitor breakfast on Sept. 15, Interior Secretary Sally Jewell addressed the methane issue.

“It is crazy to vent natural gas into the atmosphere when natural gas is a fuel that can produce electricity at a much lower carbon footprint than other sources like coal,” Jewell said. “It is economical in some cases for companies to flare or vent natural gas, burning it at the wellhead, because their target is oil. That is not OK.”

She acknowledged that emergency situations may require an operator to shut-in a rig, or flare or vent gas from a pressure standpoint.

“But there is no reason that we shouldn’t be looking at capturing that valuable public resource, getting a royalty on that resource and using it in a more constructive way that just either blowing it up into the atmosphere or burning it,” she added.

Proposal, Implications

The proposed EPA rule applies to compressors, pneumatic controllers and pumps, hydraulically fractured oil well completions and fugitive emissions from well sites and compressor stations. As stated in the proposed rule, released Sept. 18, the EPA proposes that:

  • New and modified well sites and compressor stations conduct fugitive emissions surveys semiannually with optical gas imaging technology and repair the sources of fugitive emissions within 15 days. The frequency of the surveys would vary depending on the percentage of fugitive emissions.
  • Green completions, or reduced emissions completions, will be required for hydraulically fractured wells when technically feasible. The proposed rule is the same as that in the final 2012 NSPS rule.
  • Methane and VOC (volatile organic compound) emissions from gas-driven chemical/methanol pumps and diaphragm pumps must be reduced to 95% if a control device is onsite. The requirement at natural gas processing plants must be dropped to zero.
  • The natural gas bleed rate must not exceed 6 standard cubic feet per hour to lower emissions from pneumatic controllers. At natural gas processing plants, the level must be lowered to zero.

After receiving feedback, the EPA is already reconsidering some of the proposed changes concerning storage vessel control device monitoring and testing, along with the compliance period for leak detection and repair for newly affected units among other areas.

The EPA thinks the proposed rule could result in a reduction of 170,000 to 180,000 tons of methane and 120,000 tons of VOC in 2020.

“We believe it is important to regulate methane from the oil and gas sources already regulated for VOC emissions to provide more consistency across the category, and that the best system of emission reduction (BSER) for methane for all these sources is the same as the BSER for VOC,” the EPA said. The proposal extends the current VOC standards to the remaining unregulated equipment.

The cost to the industry could stretch into the millions.

EPA estimates the annual cost, including capital, operating and maintenance, monitoring, reporting and recordkeeping costs, could be as much as $180 million 2020 and $330 million in 2025. Total annual engineering costs could add another $200 million to costs in 2020, and $500 million in 2025.

However, “This estimated annual cost does not take into account any producer revenues associated with the recovery of salable natural gas,” the EPA said. “The EPA estimates that about 8 million Mcf in 2020 and 16 to 19 million Mcf of natural gas in 2025 will be recovered by implementing the proposed [new source performance standards].”

The agency also stated it is working with the BLM, realizing that the some facilities could also be subject to the other agency’s rules. “We believe, to minimize confusion and unnecessary burden on the part of owners and operators, it is important that the EPA requirements not conflict with BLM requirements,” the EPA said.

Being Proactive

The proposed rules by the two agencies give credence to the industry’s woes when it comes to regulations.

“We urge EPA to coordinate its efforts with other agencies to avoid implementing duplicative requirements that could potentially hinder the continued production of the energy that our nation will continue to demand,” Todd said in the statement. “The rules we’re discussing today are a small slice of the pending regulations that our industry is facing.”

He asked the EPA to extend the comment periods by 60 days, allowing a minimum of 30 days overlap with the proposed BLM rule.

“Without this overlap, industry will not have the chance to understand the cumulative impacts and provide meaningful feedback to avoid conflicting requirements across the separate agencies,” he said.

Todd also urged the EPA to accommodate operators that are already implementing leak monitoring and repair requirements either due to existing permits, state regulations or voluntary commitments that essentially also satisfy the federal rule requirements.

According to the API, the oil and gas industry has managed to lower methane emissions while growing production. Since 2005, methane emissions from natural gas systems have dropped 11% while gas production has increased 44%.

Several oil and gas companies have even joined the EPA’s voluntary Natural Gas STAR program and have shown interest in participating in its new Methane Challenge Program, which hasn’t officially started yet.

“We are seeking feedback and comments on the proposed program until October 13, with the goal of launching the program by the end of the year,” the EPA said. “There has been significant interest in the program, but it is too soon to tell how many companies will participate.”

However, in 2013, companies in the Natural Gas STAR program reduced methane emissions from their operations by implementing nearly 50 technologies and practices, resulting in emissions reductions of 50.7 Bcf for the year, the EPA told Hart Energy.

“These methane emissions reductions have cross-cutting benefits on domestic energy supply, industrial efficiency, revenue generation, and greenhouse gas emissions reductions,” the EPA said. “The 2013 emission reductions are equivalent to the additional revenue of more than $200 million in natural gas sales (assumes an average natural gas price of $4.00 per thousand cubic feet); the avoidance of 24 million tonnes CO2 equivalent and the carbon sequestered annually by 19 million acres of U.S. forests.”

Those actions can be applauded, but only 1% of the gas industry is participating, Nelson said. A study by ICF International, commissioned by the EDF, found that oil and gas companies operating on federal and tribal lands are losing the equivalent of nearly $330 million of natural gas annually through leaks and intentional venting or flaring.

“If we really want these reductions to take place to the scale necessary, you need everyone to step up to the plate and that’s just not going to happen voluntarily,” Nelson said. “That’s why we think you need regulations.”

Contact the author, Velda Addison, at vaddison@hartenergy.com.

Want to comment?

Submit your comments, identified by Docket ID Number EPA-HQ-OAR-2010-0505, to the Federal eRulemaking Portal. Follow the online instructions.

Deadline: Nov. 17

Final rule: Expected in 2016