Overview of EPA Oil and Gas Activities. October 2015

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1 Overview of EPA Oil and Gas Activities October 2015

2 Background March 2014 White House releases the Strategy to Reduce Methane Emissions Outlined regulatory and voluntary actions in the oil and gas sector International and domestic actions January 2015 Administration announces a new goal to cut methane emissions from the oil and gas sector by percent from 2012 levels by 2025 Included series of regulatory and voluntary steps that EPA and other federal agencies are pursuing 2

3 New Source Performance Standards (NSPS) In August 2015, the EPA proposed standards for certain new and modified sources in the oil & gas sector This proposal builds on the 2012 NSPS for the oil and gas industry to reduce methane emissions and to achieve additional reductions in VOCs The proposed standards are cost-effective, commonsense requirements for new and modified oil and gas sources that are significant emitters of methane and VOCs. The proposal focuses on sources covered in the White Papers issued in 2014 for peer review and public comment: Compressors Emissions from completions of hydraulically fractured oil wells Leaks Pneumatic devices EPA will take public comment on the proposal until Nov. 17. The agency plans to issue a final rule in

4 NSPS Proposal: Details Building on the 2012 New Source Performance Standards (NSPS) for VOC emissions for the oil and natural gas industry, EPA s proposed updates would: Require that the industry reduce methane Add emissions reduction requirements for sources of methane and VOC pollution that were not covered in the 2012 rules. These include requirements that owners/operators: Capture natural gas from the completion of hydraulically fractured oil wells Natural gas wells were covered in the 2012 rule Green completion/reduced emissions completion required; exemptions for some types of wells (those would have to reduce emissions using combustion) Find and repair leaks (fugitive emissions) Limit emissions from new and modified pneumatic pumps Expand coverage to limit emissions from several types of equipment used at natural gas transmission compressor stations and gas storage facilities Includes compressors and pneumatic controllers that were not covered by the 2012 rule Would reduce and estimated 340,000 to 400,000 short tons of methane by 2025 (the equivalent of reducing 7.7 to 9 million metric tons of carbon dioxide) 4

5 Control Technique Guidelines (CTGs) In August 2015, the EPA also issued draft Control Technique Guidelines for the oil & gas sector These are guidelines for the states to require reasonably available control technology to achieve VOC reductions from existing sources in ozone nonattainment areas that are classified as Moderate and above, and in states in the Ozone Transport Region The draft guidelines identify commonsense recommendations for reducing emissions requirements for significant emission sources The draft guidelines are now available for public review and comment and will be finalized in

6 CTG Draft: Details CTG provide recommendations for state/local air agencies to assist them in determining RACT Are not regulations and do not impose legal requirements on sources States may use different technology and approaches, subject to EPA approval Other approaches must achieve required pollution reductions Draft guidelines include EPA s RACT recommendations for storage tanks, pneumatic controllers, pneumatic pumps, centrifugal and reciprocating compressors, equipment leaks from natural gas processing plants, and fugitive emissions Recommendations consistent with oil and gas 2012 NSPS and 2015 NSPS proposal Draft includes detailed information on the cost of available controls to assist states in determining RACT for their sources Draft includes model rule language 6

7 EPA s Greenhouse Gas Reporting Program EPA has collected its fourth year of Greenhouse Gas Reporting Program (GHGRP) data from the oil and gas sector Through this successful program, EPA collects annual greenhouse gas emissions data from facilities across the natural gas value chain that are above the emissions threshold for reporting EPA is addressing gaps in the GHGRP Final Rule establishes new reporting requirements for onshore petroleum and natural gas gathering and boosting activities, onshore natural gas transmission pipelines, completions and workovers of oil wells with hydraulic fracturing EPA is exploring opportunities to apply innovative monitoring technologies such as leak detection and remote sensing technologies 7

8 2014 Greenhouse Gas Reporting Program Data Today, the Greenhouse Gas Reporting Program is releasing its 2014 GHG data, which covers 41 industrial sectors including petroleum and natural gas systems Over 2,400 facilities with petroleum and natural gas systems activities submitted reports for 2014 In total, these facilities accounted for GHG emissions of 236 million metric tons of carbon dioxide equivalent (MMT CO 2 e) This is an increase of 3.5% compared to 2013 GHG emissions from this sector Facilities reported new activity data that underlies the GHG emissions from key oil and gas sources Segment Number of Facilities GHG Emissions (Million Metric Tons CO 2 e) Onshore Production Offshore Production Natural Gas Processing Natural Gas Transmission Underground Natural Gas Storage 54 2 Natural Gas Distribution LNG Import/Export 8 1 LNG Storage 5 < 1 Other Oil and Gas Combustion Total 2, GHGRP data as of 8/16/15 8

9 EPA s U.S. GHG Inventory Substantial amounts of new information on the oil and gas sector EPA's Greenhouse Gas Reporting Program Research studies by government, academic, and industry researchers, and industry organizations EPA makes annual updates to the Inventory of U.S. GHG Emissions and Sinks (GHG Inventory) Official U.S. estimate submitted to UNFCCC Expert, public, and international reviews of GHG Inventory estimates EPA continues to review new data for potential updates to its emission estimates in the GHG Inventory Stakeholder workshop on GHG data on petroleum and natural gas systems (November 19, Pittsburgh and via webinar) EPA presentation of 2014 Greenhouse Gas Reporting Program data (including newly available activity data) EPA presentation of GHG Inventory methods and planned improvements under consideration Stakeholder presentations on new data for potential improvements to the GHG Inventory 9

10 Voluntary Efforts: Natural Gas STAR Methane Challenge In July 2015, EPA proposed a new voluntary program, the Natural Gas STAR Methane Challenge This program would expand the successful Natural Gas STAR Program Under the new partnership, EPA plans to enter into voluntary agreements with individual companies to do the following: Achieve ambitious, meaningful methane reductions across company operations Provide accountability and transparency for tracking progress Provide company-level recognition of commitments and progress Encourage innovation and demonstrate continuous improvement To enhance flexibility, the proposed program offers two commitment options: Best Management Practice (BMP) Commitment One Future Emissions Intensity Commitment The program would cover onshore oil production and the entire value chain from onshore production through natural gas distribution 10

11 Proposed Standards - Timeline March 2014: The President s Climate Action Plan: Strategy to Reduce Methane Emissions directed EPA to determine how best to pursue methane reductions from the oil and gas sector April 2014: As part of the Methane Strategy, EPA issued a series of technical white papers, focusing on emissions and mitigation techniques that targeted methane and VOCs January 2015: EPA and the Administration announced a strategy to for reducing methane and VOCs from the oil and gas sector March-May, 2015: Sought input from state and local air agencies and tribes that volunteered to participate in discussions July 2015: Released proposal for Natural Gas STAR Methane Challenge August 2015: Proposed standards, FIP and draft Control Techniques Guidelines (CTG) announced September October 2015: Public hearings in Denver, Dallas and Pittsburgh; GHGRP Final Rule to Expand Reporting Requirements November 2015: Natural Gas STAR Annual Implementation Workshop 2016: Issue final rules and final CTG 11

Industries. March 2014. Prepared for Environmental Defense Fund 257 Park Avenue South New York, NY 10010

Industries. March 2014. Prepared for Environmental Defense Fund 257 Park Avenue South New York, NY 10010 Economic Analysis of Methane Emission Reduction Opportunities in the U.S. Onshore Oil and Natural Gas March 2014 Prepared for Environmental Defense Fund 257 Park Avenue South New York, NY 10010 Prepared