U.S. Will Seek to Cut Upstream Methane Emissions Up to 45% by 2025

The Obama administration announced on Jan. 14 that the Environmental Protection Agency (EPA) will propose new regulations to cut emissions of methane from the oil and gas industry, as well as other measures, with a goal of reducing total U.S. methane emissions 40% to 45% by 2025. The proposed rule is expected this summer.

Emissions of methane from the production, transmission, and distribution of natural gas have become a hotly debated issue in recent years, as the nation’s gas production has risen sharply with the development of methods to extract gas from shale formations. Though methane makes up only 10% of total U.S. emissions of greenhouse gases, it is thought to be 20 to 25 times more effective at trapping atmospheric heat than carbon dioxide over a 100-year period.

Just how much methane is lost between well and end user is not clear, with wildly varying results from a series of recent studies. The EPA has estimated losses at about 1.5% of gross production, but studies from outside researchers have not always agreed with those estimates. Some studies have found results anywhere from 50% to 1,000% higher than EPA figures, while an ongoing study by the Environmental Defense Fund (EDF) and the University of Texas has mostly supported EPA data. Much of the disparity is likely due to differing methodologies.

The announcement noted that the industry has made progress in limiting emissions of methane, with EPA figures showing emissions down 16% since 1990 despite a 37% increase in production over the same period. “Nevertheless, emissions from the oil and gas sector are projected to rise more than 25 percent by 2025 without additional steps to lower them,” it said. “For these reasons, a strategy for cutting methane emissions from the oil and gas sector is an important component of efforts to address climate change.”

Though the initial EPA rulemaking will focus on the oil and gas sector, several other actions are planned to cut emissions across the entire delivery chain:

  • New guidelines to reduce ozone-forming pollutants from existing oil and gas systems.
  • New standards from the Department of the Interior to reduce venting, flaring, and leaks from wells on federal lands.
  • Efforts to improve monitoring of gas leaks, including possible regulatory action.
  • New pipeline standards from the Department of Transportation to include leak reduction in addition to safety.
  • $25 million in funding for Department of Energy (DOE) research to improve leak detection technologies and enhance the quantification of emissions from natural gas infrastructure.
  • Additional steps by the DOE to reduce emissions during transmission and distribution, such as energy efficiency standards for compressors, and partnering with the Federal Energy Regulatory Commission, the National Association of Regulatory Utility Commissioners, and local distribution companies to modernize natural gas infrastructure and accelerate pipeline repair and replacement.

Reactions to the announcement largely fell along predictable lines. Marty Durban, president and CEO of gas industry group America’s Natural Gas Alliance said he was “disappointed” with the decision to take a regulatory approach over voluntary measures. “Given that methane is also the product we sell and, therefore, want to capture, this was an opportunity to work with willing partners toward a shared goal.”

Environmental groups by contrast hailed the move. “This is a landmark moment: direct federal regulation of methane is essential, and the administration has set the right goal and launched solid steps to get started,” EDF President Fred Krupp said.  “However, we will need a clearer roadmap and more decisive action to ensure the administration tackles the most important part of the problem—emissions from existing wells, pipelines and facilities.”

Unlike proposed carbon emission standards for power plants, the pushback from the industry on this move may be limited, since as Durban noted gas producers and distributors have economic incentives to eliminate leaks and leak reduction measures can pay for themselves through increased gas production.

New standards for well completions with hydraulic fracturing have been less controversial than first expected, with some companies finding that the net cost of compliance was essentially zero. Durban hailed the fact that emissions from hydraulically fractured wells have fallen 73% since 2011, according to EPA data. “The natural gas industry has demonstrated its ability to significantly reduce methane emissions and our commitment to making further reductions through innovation,” he said.

A 2014 study performed by consulting firm ICF International as part of the EDF’s methane emissions project found that 40% reduction in emissions was achievable by replacing leaky valves and pumps at a net total cost of about $0.01/Mcf.

 —Thomas W. Overton, JD is a POWER associate editor (@thomas_overton, @POWERmagazine).