White House to Tackle Methane Emissions from Oil & Gas Sector

On January 14, the White House announced a new initiative to cut methane emissions in the United States. The initiative is an important part of President Obama’s Climate Action Plan, originally announced in June 2013 and updated in March 2014 to include a specific strategy for cutting methane emissions. Methane, a potent greenhouse gas which is able to warm the climate 28 times more than carbon dioxide over 100 years, is a primary component of natural gas – making up 95-98 percent of it. The new initiative’s overall goal is to reduce methane emissions from the oil and gas sector 40 to 45 percent below 2012 levels by 2025.

Currently, the United States is producing more natural gas than any other country in the world, and producing oil at a higher rate than at any point in the last 30 years. The White House’s initiative is specifically targeted to guide these industries towards reducing their climate impact, through a combination of guidelines, voluntary measures, and regulations to be set by various Federal agencies.

The main regulatory agenda is a draft rule the Environmental Protection Agency (EPA) will release this summer on methane emissions and volatile organic compounds (VOCs) emissions. These regulations will focus on new and “modified” oil and gas operations, as well as natural gas processing and transmission. There is not yet a strong definition for what “modified” sources are, though they would likely include well sites that are “refracked” or that add new equipment. Following a comment period, the final rule will be released in 2016. The rule will be offered under the authority of the Clean Air Act, section 111(b), which also provided standing for last year’s draft regulations of carbon emissions from new and proposed power plants.

While EPA’s regulations will not affect any existing sources of methane emissions, the White House initiative also states that the Department of Interior’s (DOI) Bureau of Land Management (BLM) will propose an update to standards on natural gas venting, flaring and leaks from new and existing oil and gas wells on federal lands. DOI is set to release those standards this spring.

The initiative also calls for the following actions:

• Ozone standards: The EPA will release new guidelines for states which are currently in noncompliance with the ozone health standard, or are located in the Ozone Transport Region. The guidelines aim to help states reduce ozone-forming pollutants from existing oil and gas operations. As a secondary benefit, the guidelines will reduce methane emissions.
• Voluntary reductions: Later in 2015, EPA will release details on new partnerships to expand its Natural Gas STAR Program, which develops and verifies industry commitments to cut methane emissions.
• Reporting: By the end of 2015, the EPA will finalize updates to its Greenhouse Gas Reporting Program, strengthening its requirements to require reporting from existing emissions sources in the entire oil and gas industry. In addition, the EPA will explore the potential for requiring remote sensor technology on oil and gas operations to identify and quantify emissions.
• Pipeline safety: Sometime in 2015, the Department of Transportation will propose natural gas pipeline safety standards, which should also lead to reduced methane emissions from pipelines.
• Research and Development: In the President’s FY 2016 budget, due to be released February 2, the Department of Energy (DOE) will request $15 million to demonstrate and develop cost-effective technologies to reduce natural gas leaks from transmission and distribution lines.
• In addition, DOE will take the following actions to encourage emissions reductions from transmission and distribution:
  • Energy efficiency standards for natural gas and air compressors
  • Do research and development to reduce costs of leak detection
  • Partner with the Federal Energy Regulatory Commission (FERC) to improve natural gas infrastructure
  • Work with the National Association of Regulatory Utility Commissioners (NARUC) and distribution companies to ensure pipelines are repaired rapidly.

Finally, in DOE’s upcoming Quadrennial Energy Review, planned for release sometime in February, there will be a strong focus on the modernization of energy transportation and storage infrastructure. The report will have policy recommendations specifically for the natural gas industry.

The methane actions outlined by the White House will play a crucial part in achieving the President’s goal of reducing greenhouse gas emissions 26-28 percent below 2005 levels by 2025. The current steps to reduce methane emissions are a good start, and promise to slow the rapid ramping up of methane emissions as natural gas and oil exploitation continues to increase across the United States. However, methane emissions from the vast majority of current oil and gas operations will remain unregulated. In a press call about the new initiative, Dan Utech, the special assistant to the President on energy and climate change, said, “We need to get reductions from existing sources; there’s no question about that.”

Author: Laura Small