Preparing for the First GHG Report Under the Revised Subpart W Provisions

As we talked about in our December 2015 blog post, U.S. EPA finalized amendments to the 40 CFR Part 98 Mandatory Greenhouse Gas (GHG) Reporting Rule on October 22, 2015, which affected facilities in the Petroleum and Natural Gas Systems industry which are regulated under Subpart W of the rule.  The amendments have expanded the scope of Subpart W in a number of ways:

• Two new regulated industry segments were added: Onshore Petroleum and Natural Gas Gathering and Boosting; and Onshore Natural Gas Transmission Pipelines.
• Reporting of emissions from oil well completions and workovers with hydraulic fracturing is now required for Subpart W Onshore Petroleum and Natural Gas Production segment.
• Onshore Petroleum and Natural Gas Production facilities are required to report well identification numbers associated with certain source types.

The amendments have been in effect since January 1, 2016 and the first report under the revised rule is due in March 2017 for emissions occurring during calendar year 2016.  With the end of the calendar year fast approaching, here are some questions you should be asking yourself:

1. Do I have a compliant GHG monitoring plan in place?
   The Mandatory GHG Reporting Rule requires that regulated facilities maintain written GHG monitoring plans detailing how the data needed for emissions estimates and annual reports will be collected and quality-assured.  With two new segments added to the rule, GHG monitoring plans must be in place for newly-regulated facilities in those segments.  In addition, existing GHG monitoring plans may need to be updated to address the new oil well completion and workover source type and the new requirement to report well identification numbers for facilities in the onshore production segment.
2. Have I conducted an applicability analysis?
   The U.S. EPA has made a downloadable emissions screening utility available for the new gathering and boosting segment here (run the applicability tool for calendar year 2016 and select the  Onshore Petroleum and Natural Gas Gathering and Boosting segment to access the utility’s download page).  However, in our experience with a similar tool developed by U.S. EPA for the onshore production segment, emissions estimates generated by these tools are useful only for a first level evaluation.  With the exception of facilities with very low screening emissions estimates, we recommend either a hybrid approach, using both the tool and external calculations where the tool is believed to be inaccurately estimating emissions, or “full-blown” emissions estimates conducted in accordance with Subpart W requirements.
3. Do I have complete equipment inventories?
   Up-to-date equipment inventories are key to accurate emissions estimates and reporting under Subpart W of the GHG Mandatory Reporting Rule.  New equipment inventories or updates to existing inventories may be needed to collect information on previously-exempt gathering and boosting facilities or in situations where existing inventories do not provide sufficient information to determine if equipment falls under the production segment or gathering and boosting segment.
4. Have I collected data for emissions estimates and reporting?
   U.S. EPA is allowing reporters to use Best Available Monitoring Methods (BAMM) for calendar year 2016 for facilities or sources that are newly-subject to reporting requirements under the rule revisions. Using the BAMM provisions essentially means using engineering estimates and alternative compliance methods in lieu of complying with rule requirements. We have found that over-reliance on BAMM can create reporting challenges:
   • Estimating emissions under the BAMM provisions can be challenging if no actual, real-world data have been collected as a basis for those estimates.  This is particularly important for sporadic emissions events such as blowdowns and non-routine flaring, for which there may be limited opportunities to gather real data.
   • It is always in your best interest to estimate emissions as accurately as possible.  If emissions for newly-regulated gathering and boosting facilities are overestimated due to lack of real data, you may find yourself required to report for the next three or five calendar years under the continued reporting provisions of the rule when your actual emissions may have been under the reporting threshold to begin with.

ALL4 has extensive experience assisting oil and gas clients with GHG emissions calculations and reporting, and can help you navigate the new rule requirements.  If you have any questions, contact JP Kleinle at (610) 933-5246 extension 120 or jkleinle@all4inc.com