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US cracks down on methane releases from oil, gas sector

02 November 2021 Amena Saiyid

US President Joe Biden announced a range of domestic actions aimed notably at the oil and natural gas sector that the White House said will help as part of a push to reduce nearly one-third of worldwide methane emissions by the decade's end under a global pledge launched with the EU on 2 November.

Unveiled on the second day of the UN COP26 meeting in Glasgow, the actions recognize the opportunity capturing methane presents because of its potency as a GHG. Although a short-lived GHG, methane has a global warming potential that is at least 80 times that of CO2 over a 20-year span.

The latest UN Intergovernmental Panel on Climate Change report said methane is responsible for one-third of current global warming and another UN multi-agency "United in Science" report on climate change said reductions in atmospheric methane in the short term could support reaching the goals of the Paris Agreement.

"One of the most important things we can do in this decisive decade—to keep 1.5 degrees [Celsius] in reach—is reduce our methane emissions as quickly as possible," Biden said, in formally launching the joint EU-US global pledge, which he first announced at the virtual Major Economies Forum on Energy and Climate in September.

Calling it "the single-most effective strategy we have to slow global warming in the near term," Biden said nearly 100 countries have signed onto the pledge, representing nearly half the globe's methane emissions, or 70% of global GDP.

The White House said the signees include 15 of the world's top 30 methane emitters. That group includes the US, EU, Indonesia, Pakistan, Argentina, Mexico, Nigeria, Iraq, Vietnam, and Canada.

The International Energy Agency ranks Russia, the US, the UAE, Turkmenistan, and Iraq in descending order as the top five global methane emitters from the oil and gas sector.

US Methane Emissions Reduction Action Plan

At the global pledge launch, Biden released the US Methane Emissions Reduction Action Plan, which includes various actions his administration is taking to tackle methane emissions.

The plan to a large extent targets methane leaks arising from the extraction, production, storage, transportation, and distribution of oil and gas products, but it also tackles emissions from the agriculture sector and landfills.

"There is no question that President Biden is taking a broad-based approach to tightening existing guidance on new source wells, expanding to existing production, and moving down into the transportation system, looking to improve safety, but also to lower unintentional methane releases," Kevin Birn, IHS Markit vice president for GHG estimation and production, told Net-Zero Business Daily.

As Biden noted in his 2 November speech, the plan includes a long-awaited regulation from the US Environmental Protection Agency (EPA) to limit, plug, and repair releases of methane from extracting, processing, and production of oil and gas from new and modified operations. For the first time, it also includes the same standards for existing operations.

The proposed rule builds on oil and gas industry practices already in place and then some more.

Increased monitoring

For instance, EPA is seeking increased monitoring at well sites and compressor stations to detect and plug methane leaks. At well sites with estimated methane emissions of at least 3 metric tons (mt) per year, EPA will require quarterly monitoring for leaks and prompt repairs for any that are found. This provision alone would result in routine monitoring at 300,000 well sites nationwide that are responsible for 86% of fugitive emissions.

Among other provisions, the agency also is proposing to give owners and operators the flexibility to use advanced detection technology that can find major leaks more rapidly and at lower cost than ever before. It also is proposing standards to eliminate venting of associated gas and requiring capture and sale of gas where a sales line is available—at new and existing oil wells.

Not only would EPA's proposal address existing sources nationwide for the first time, but it would also take several significant steps forward from 2016 standards that were never implemented, according to the nonprofit Clean Air Task Force.

The 2016 regulations for new and existing oil and gas operations were held up by litigation and then repealed in 2020. According to Clean Air Task Force, the 2020 replacement regulation essentially took methane out of the equation entirely and focused on plugging leaks of volatile organic compounds that are ground-level ozone precursors and also released in the production process.

However, the Democrats in the US Congress were successful in overturning the 2020 regulation in July after invoking the Congressional Review Act, a rarely used tool to overturn federal regulations by a simple majority. This enabled EPA to write the new rules, which now have a 30-day public comment period before final review.

Along with the proposed new regulation, EPA also said 2 November it will issue a supplemental rule in 2022 that will address methane leaks from abandoned and unplugged wells, opportunities to improve and minimize unintentional flares and pipeline "pigging" or maintenance, and tank-truck loading operations.

According to EPA, the impact of its proposed rules for existing and new oil and gas wells would add "pennies" to the price of a thousand cubic feet of gas or a barrel of oil and would reduce 41 million mt of methane emissions from 2023 to 2035. This is the equivalent of 920 million mt of CO2, which is "more than the amount of carbon dioxide emitted from all US passenger cars and commercial aircraft in 2019." In 2030 alone, the rule would reduce methane emissions from sources covered in the proposal by 74% compared with 2005.

The agency's regulatory impact analysis revealed that the proposal, once finalized, would yield nearly $4.5 billion in net climate benefits each year, with total net benefits valued at $48 billion to $49 billion from 2023 through 2035. It also would increase recovery of gas that otherwise would go to waste which would be valued at $690 million for 2030 alone.

"By building on existing technologies and encouraging innovative new solutions, we are committed to a durable final rule that is anchored in science and the law, that protects communities living near oil and natural gas facilities, and that advances our nation's climate goals under the Paris Agreement," EPA Administrator Michael Regan said in a statement.

The American Petroleum Institute cautiously welcomed the proposed rules for new and existing sources, calling it "sweeping in scope" and said it would work closely with EPA to "help shape a final rule that is effective, feasible, and designed to encourage further innovation."

Likewise, the American Exploration and Production Council (AXPC) said it supports "reasonable regulation" and exhorted the administration to use the EPA regulatory process, not penalties, for bringing about reductions. The AXPC was referring to the methane fee imposed on oil and gas operators for failing to plug leaks.

The White House proposed this fee as part of its Build Back Better agenda, and the House of Representatives Energy and Commerce Committee recommended its adoption in the budget reconciliation measure that would implement Biden's climate agenda. Right now, the methane fee is still in play even though Biden apparently dropped it from a pared-down compromise on the budget measure.

Birn wasn't surprised by the oil industry's reaction, saying "the oil and gas industry is also responding to pressure to compete on carbon, and they are implementing new technologies to lower the chance of fugitive emissions and in better monitoring and detection technology; so, when leaks to occur they can find them and respond more rapidly."

Environmental groups, though pleased with the administration's steps, said the EPA could have made the rules more stringent based on the advancements made in leak detection technology. They especially were disappointed with the EPA decision to write a separate rule on flaring.

Sarah Smith, program director at Clean Air Task Force, said the EPA proposal represents an "important first step" in backing the Biden administration's climate ambition with action at home.

"While there are clear opportunities to improve the rules, including by strengthening the leak inspection standards and the rules for when companies can flare gas, they put the US on solid footing as it champions the Global Methane Pledge at COP26 and set the stage for the US to ratchet up ambition and action toward final safeguards that maximally reduce emissions," Smith said in a statement.

Plugging leaks on public lands, pipelines

Biden also outlined plans for the US Department of Interior to cap nearly 40% of the 2.7 million abandoned oil wells and about 600,000 orphaned gas wells that remain unplugged and were responsible for leaking 263,000 mt of methane (6.6 million mt of CO2e) in 2019.

But those plans are based on legislation that remains stuck in the US Congress.

The Infrastructure Investment and Jobs Act (IIJA), which the US Senate passed and awaits passage in the House of Representatives includes a $4.7-billion well plugging program that, if enacted, will commission Interior to direct well plugging activities on federal, state, private, and Tribal lands.

Coinciding with the 2 November announcement of the Biden action plan, the US Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) has started to issue a series of additional rules for gas pipelines.

In addition to being a major safety hazard, the White House said ruptures are a particularly large source of pipeline methane emissions, with a single rupture from a large, high-pressure gas pipeline releasing more than 1,300 mt of methane.

As part of this plan, PHMSA also expects to finalize three rules in the coming months that would improve safety and plug leaks from pipeline and storage tank valves and ruptured pipelines, whether they transport oil and gas products from wellheads to central collection facilities, transport them across state lines or distribute them to homes.

The first rule would require automatic shut-off valves, the second would regulate at least 300,000 miles of transmission lines to reduce the frequency of leaks, and the third issued November 2 would tackle gas gathering lines. The White House said the third will curb leaks and ruptures from 400,000 miles of previously unregulated pipelines that transport oil and gas products from production wellheads to central collection sites.

PHMSA for its part estimates that its regulatory efforts have the potential to provide annual methane reductions of as much as 20 million mt of CO2e a year.

Methane reductions

A UN report released in May said existing technologies can capture about 30% of the methane emissions from oil and gas operations, coal mining, wastewater treatment processes, and landfills.

Methane Action, a nonprofit group of scientists, lawyers, and activists, delivered a Declaration on Reducing Methane to the US COP26 delegation led by Biden and delegations from other countries.

In that declaration, the scientists noted that current atmospheric methane levels at 1.9 parts per million are now higher than at any time in the last 800,000 years and rising faster than those for other climate pollutants. They called on Biden to establish governance and a specific timeline for developing, testing, and deploying methane removal technologies on an urgent basis.

Jean Su, energy justice director for the nonprofit Center for Biological Diversity, said the time has run out for the Biden administration to tinker around the edges.

"Cutting methane emissions from the oil and gas sector isn't enough to meet science-based climate targets without also limiting fossil fuel production. If Biden wants to be a true climate leader, he needs to set a near-zero methane leakage rate and end new oil and gas project approvals to avoid cataclysmic warming," Su said in a statement.

Posted 02 November 2021 by Amena Saiyid, Senior Climate and Energy Research Analyst

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