Have You Heard? The GHG Reporting Rule May Be Changing for the Petroleum and Natural Gas Sector

It is a new year, a new beginning, and change is coming.  The U.S. Environmental Protection Agency (U.S. EPA) posted on their “Subpart W Rulemaking Resources” webpage a pre-publication proposal and associated fact sheet of their intent to amend the greenhouse gas (GHG) reporting program (GHGRP) for the petroleum and natural gas (NG) sector.  To improve is to change—right?  I will let you be the judge of that by providing just enough information to become acquainted with the proposal.

Background Information

The U.S. EPA published the GHG reporting rule for the petroleum and natural gas systems source category at 40 CFR Part 98, Subpart W on November 20, 2010 (Subpart W).  The proposed amendments were published in the Federal Register on March 10, 2014.  EPA is receiving comments during a 45-day period, which ends April 24, 2014.

Proposed Amendments Include:

Changes aimed to provide consistency throughout Subpart W calculation methods:

Units of Measure

Currently, GHG emissions are reported in metric tons of CO₂ equivalent (CO2e)

Proposed changes:

• GHG emissions would be reported in metric tons of GHG,
• Reporters would use global warming potentials (GWPs) to calculate CO₂e,
• Calculation methods would allow for calculation of individual GHG emissions in metric tons.

Terms and Definitions

Onshore petroleum and natural gas production

Adds references to:

• Engines, boilers, heaters, flares, separation and processing equipment, and maintenance and repair equipment;

Removes references to:

• Gravity separation equipment and auxiliary non-transportation-related equipment

Sub-basin category, for onshore natural gas production

• Amendments aimed to clarify that “tight gas reservoir rock” generally refers to tight reservoir rock formations that produce gas, and not tight reservoir rock formations that produce only oil, and that wells that produce liquids in a sub-basin from formations other than high permeability gas, shale gas, coal seam, or other tight gas reservoir rock are considered oil wells.

Changes to calculation methods and reporting requirements (not an all-inclusive listing):

• Reporting requirements would be restructured to align with the revised calculation methods and clarify the data elements to be reported,
• The reporting section would be reorganized by industry and source type (e.g., natural gas pneumatic device venting, acid gas removal vents, etc.),
• Allow the use of  site-specific data on gas compositions for pneumatic device venting (for the natural gas onshore transmission compression and underground storage industry segments),
• Make minor clarifying edits for acid gas removal vents ,
• Revise the dehydrator vents source to account for venting to a vapor recovery system or to a flare,
• Revise the calculation and reporting requirements for well venting from liquids unloading to allow for annualizing venting data for facilities that calculate emissions using a recording flow meter,
• Add definitions for “reduced emissions completion” and “reduced emissions workover” for gas well completions and workovers,
• Include a compressibility term for blowdown vents,
• Revise the method for estimating emissions from dump valves found to not be closing properly

Other notable changes include:

• Increase the specificity regarding how to use, treat, and report missing data for each calculation,
• Add missing data procedures specific to facilities that are newly subject to subpart W and to newly acquire existing wells,
• Removal of best available monitoring methods (BAMM) as an option by January 1, 2015,
• Add confidentiality determinations for new and substantially revised reporting data elements

So What’s Next?

The EPA is planning to publish the final amendments before the end of 2014. If finalized, these amendments would become effective on January 1, 2015.  Thus, affected facilities would be required to follow the amended rule beginning with the 2015 reporting year.  The first annual reports of emissions calculated using the amended requirements would be those submitted by March 31, 2016, which would cover the 2015 reporting year. For the 2014 reporting year, reporters would continue to calculate emissions and other relevant data in accordance with the current Subpart W requirements.

If you would like to learn more about this proposed action, please contact me at (610) 933-5246 x120 or at jkleinle@all4inc.com.