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March 5, 2015

EPA to Regulate Methane Emissions Despite Huge Decline

March 5, 2015
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The Environmental Protection Agency (EPA) has proposed to regulate methane emissions from the oil and gas sector as part of its ongoing climate change initiatives, mandating a reduction of 40 to 45 percent from 2012 levels by 2025. Methane is the principal component of natural gas. The new rules are expected to be proposed this summer and completed by 2016. These rules would apply to new or modified sites. At existing oil and gas operations, EPA would rely mostly on voluntary measures for reducing methane emissions.[i]

Even before EPA started promulgating these regulations, according to EPA’s own data report, oil and gas operations are doing exceedingly well at cutting methane emissions. Since 2007, methane emissions fell by 35 percent from natural gas operations, while natural gas production increased by 22 percent. According to EPA, voluntary implementation of new technologies by the oil and natural gas industry is a major reason for the decline in emissions.[ii] This new regulation will accomplish very little but risk being a drain on one of the few booming industries in a stagnant economy.

The Proposed Regulations

EPA has yet to determine many of the technical details behind its proposal to reduce methane emissions by 40 to 45 percent from 2012 levels over the next decade. The agency is planning to meet with stakeholders in the coming months before issuing a proposed methane rule this summer and a final rule next year. [iii]

President Obama’s Department of Interior is also proposing to reduce leaks of methane, the second largest source of greenhouse gas emissions, from new drilling equipment and from old and new production facilities on public lands. The Interior Department’s Bureau of Land Management is planning to modify its standards for new and existing wells on public lands to reduce venting, flaring and leaks of natural gas, which is comprised mostly of methane, from oil and gas wells.

Many believe the new regulations are politically motivated in order to meet an administration commitment to reduce U.S. greenhouse-gas emissions that it announced in China last November and to spur a new climate agreement at the U. N. summit to be held later this year in Paris. Last November, the Administration unveiled a goal to reduce U.S. greenhouse gas emissions by 26 to 28 percent below 2005 levels by 2025.  To reduce methane emissions, oil and gas companies will have to install technology that prevents methane from being inadvertently leaked and to monitor their operations if leaks were to appear. According to industry executives and EPA, many companies are already using that equipment voluntarily, because they do not want to waste an otherwise valuable product – natural gas.

Methane emissions have accounted for about 9 percent of the greenhouse gases emitted in the United States; while carbon dioxide emissions have accounted for the vast majority of greenhouse gas emissions–82 percent[iv] Of the 9 percent of greenhouse gas emissions that methane constitutes, only about 3 percent are subject to the proposed EPA regulations, of which EPA wants to reduce about half. If the United States was to eliminate all carbon dioxide emissions now and forever, the amount of global warming that would be “saved” according to computer models, would be just 0.10°C by the end of the century. So, reducing 1.5 percent of our greenhouse gas emissions would produce just 0.002°C of temperature savings. Thus, the new EPA regulations would only avert two-thousandths of a degree of warming –an extremely miniscule amount.[v]

EPA Data and Other Research

EPA publishes its Greenhouse Gas Inventory annually, incorporating new data and methodologies to improve its accuracy. The decline trend in methane emissions that EPA is reporting in its most recent draft inventory has also been reported in its earlier inventory reports. The most recent inventory also notes that methane emissions from activities associated with livestock (e.g. cow flatulence) are overtaking methane emissions from natural gas operations, as it reported last year.

New research shows that methane emissions in major shale basins are far lower than previously thought. Energy In Depth late last year reported declines in methane emissions associated with oil and natural gas production in many of the most significant producing shale basins, while production from those basins has increased substantially. Last fall, the EPA reported that methane emissions associated with hydraulic fracturing declined by 73 percent between 2011 and 2013.[vi]

Source: Energy Collective, http://theenergycollective.com/saeverley/2199301/epa-methane-emissions-natural-gas-production-fell-35-2007

Methane Leaks and Flaring

Methane is a gas, which can be converted to energy. In fact, the vast majority of natural gas is methane. Because the conversion process produces more energy than it uses, it is profitable to convert it under most circumstances. As a result, methane leaks can represent lost revenue. However, because the price of natural gas is low in many regions where oil is being extracted from tight shale deposits (for example, the Bakken region of North Dakota), and there is insufficient pipeline capacity to carry the gas to market, the methane that is produced with the oil is flared (burned) on site, rather than being captured and sold.  So far, it has been more expensive to develop the necessary transport infrastructure to bring the gas to market than the return on the sale of the natural gas would garner.[vii] This is expected to change as more pipeline capacity is added.

According to the U.S. Energy Information Administration, in 2013, more than 260 billion cubic feet of methane was flared in the United States. In essence, this methane represented more “unwanted” energy than “wasted” energy. When it comes to climate change, on a per unit basis, leaked methane is more important than flared methane, because the flaring process converts the methane to carbon dioxide, which has a much lower “global warming potential” than does methane.

Conclusion

Because natural gas producers want to limit losses of natural gas, they have developed new technologies to prevent leakage from drilling, transportation, and processing. Thus, the newly proposed methane regulations from the EPA are completely unnecessary. Therefore, they are being imposed for political reasons only—to increase clout during December’s United Nations climate meeting in Paris.

Having already targeted power plants, cars and other sources of emissions, the Obama administration is pushing to regulate the oil and gas sector–one of the greatest economic success stories of the past 10 years. The United States is now once again the largest oil and gas producer in the world.

[i] Wall Street Journal, EPA Set to Regulate Oil and Gas Methane Emissions, January 14, 2015, http://www.wsj.com/articles/epa-set-to-regulate-oil-and-gas-methane-emissions-1421239861?autologin=y

[ii] The Energy Collective, Methane Emissions from Natural Gas Production Fell 35% Since 2007, March 3, 2015, http://theenergycollective.com/saeverley/2199301/epa-methane-emissions-natural-gas-production-fell-35-2007

[iii] Washington Times, Obama targets oil and gas industry, demands massive reduction in methane emissions, January 14, 2015, http://www.washingtontimes.com/news/2015/jan/14/obama-hits-oil-and-gas-industry-demands-massive-re/print/

[iv] EPA, Inventory of U.S. Greenhouse Gases and Sinks, April 15, 2014, http://www.epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventory-2014-Main-Text.pdf

[v] Cato Institute, Proposed EPA Methane Emissions Regulations Are a Waste of Time and Money, January 16, 2015, http://www.cato.org/blog/proposed-epa-methane-emissions-regulations-are-waste-time-energy

[vi] Energy In depth, Methane Emissions from Hydraulic Fracturing Down 73 Percent, September 30, 2014, http://energyindepth.org/national/epa-methane-emissions-from-hydraulic-fracturing-down-73-percent/

[vii] Cato Institute, Proposed EPA Methane Emissions Regulations Are a Waste of Time and Money, January 16, 2015, http://www.cato.org/blog/proposed-epa-methane-emissions-regulations-are-waste-time-energy

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