The President and several states recently proposed measures to reduce methane emissions associated with oil and gas facilities, particularly from drilling activities.  After CO2, methane is thought to be the most common greenhouse gas (estimated at 8.7% of emissions for 2012 as compared to 82.5% for CO2).  Methane degrades more quickly than CO2, but it has a more significant effect on the atmospheric ozone layer before degrading.  The primary source of methane is from natural sources, followed by agriculture.  Human activity is estimated to contribute over 60% of methane emissions globally, and of that approximately 29% from oil and gas operations (6% oil; 23% natural gas).  Methane leaks and releases may occur throughout the oil and natural gas supply chain and can be mitigated through the implementation of control technologies and leak detection monitoring.  While EPA promulgated new source performance standards (NSPS) in 2012 to limit volatile organic compounds (VOCs) associated with natural gas wells and production facilities, the President’s new plan and new state regulations go further in specifically target methane emissions from a broader range of emission sources in the oil and natural gas sectors.

The President’s Climate Action Plan – Strategy to Reduce Methane Emissions (Plan), part of the Administration’s broader climate change agenda, sets forth an interagency strategy to cut methane emissions across numerous industry sectors by 17% by 2020.  While the Plan primarily targets methane emissions from production facilities, such as wells, storage, and processing and handling equipment, it also addresses emissions from downstream sources.  The Plan identifies the following “key steps” for reducing those emissions:

  • EPA
    • In recently released EPA whitepapers, the Agency analyzed significant methane sources in the oil and gas sector, including compressor stations, production of hydraulically fractured oil wells, leaks, liquids unloading, and pneumatic devices.  These papers present methane emission data from these sources and mitigation techniques beyond those covered by EPA’s 2012 VOC performance standards.  By the Fall of 2014, EPA will obtain peer review input and determine what regulatory action should be applied to emissions from these sources and, if appropriate, issue final regulations by 2016.
    • Expand the Agency’s Natural Gas STAR voluntary methane emission reduction program that encourages adoption of cost-effective technologies and practices to reduce methane emissions.
  • Bureau of Land Management:  Issue a proposed rule to reduce venting and flaring from oil and gas production on federal lands (to be published later this year and referred to as “Onshore Order 9”).
  • Department of Energy:  Building on the Department’s stakeholder roundtable meetings associated with the Quadrennial Energy Review (QER), established by Presidential Memorandum in January 2014, the QER to be released in January 2015 will evaluate opportunities to reduce “downstream” methane emissions (i.e., natural gas processing, transmission, storage and distribution activities) and identify cost effective mitigation options.
  • PHMSA:  Continue to monitor natural gas pipeline systems for safety, including requiring operators to take steps to eliminate leaks and prevent accidental releases of methane (noting PHMSA’s cast iron pipe replacement survey).

Meanwhile, ColoradoWyoming and, most recently, Ohio have issued regulations to reduce methane emissions associated with oil and gas production wells.  These regulations address gaps in federal EPA regulations, namely that EPA’s 2012 NSPS standards do not apply to existing wells, do not specifically address methane, do not extend to oil wells, and do not require leak detection for wells and gathering systems.  The Colorado, Wyoming, and Ohio regulations target methane emissions associated with oil and gas collection, storage, processing and handling through quarterly monitoring for fugitive emissions as well as leak detection and repair plans.  While Colorado and Ohio issued statewide regulations, Wyoming’s regulations are currently limited to a new production wells in a western region of the State that has struggled with ozone attainment.

In addition to the EPA whitepapers, recent studies published by the University of Texas, the National Academy of Sciences, and Science, among others, have reached different conclusions regarding the significance of methane emissions from shale gas and oil production, underscoring the dynamic range of issues and challenges associated with quantifying the environmental effects of the U.S. shale boom.