On October 30, 2009 U.S. EPA finalized the first mandatory rule related to climate change- Greenhouse Gas (GHG) Mandatory Reporting Rule. Beginning this year 31 industries must track and report their emissions. Overall, the original GHG mandatory reporting rule required reporting for an estimated 85 percent of the total GHG emissions in the U.S.
Only a few months later, U.S. EPA has already decided to expand the scope of their GHG mandatory reporting rule. Under the proposal, new source categories will have to begin collecting data January 1, 2011. New source covered would include:
- Expansion of Oil & Gas Production/Storage/Transmission- Vented, flared and fugitive emissions from petroleum and natural gas facilities that emit equal to or greater than 25,000 metric tons of CO2 equivalent per year . This sector was in the original rule but has been expanded to include the following facilities: offshore & onshore production facilities and LNG import and export facilities and natural gas distribution facilities owned or operated by local distribution facilities
- Carbon Sequestration– Facilities that inject carbon dioxide (CO2) underground for the purpose of long-term geologic sequestration (GS) or to enhance oil and gas recovery
- Large sources of fluorinated greenhouse gases (F-GHGs) – GHG covered include: hydrofluorocarbons (HFCs), nitrogen trifluoride (NF3), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). Source include: electronic manufacturers (semiconductors, phot voltaic, liquid crystal display and micro-electo-mechanical systems), flurinated gas production, manufacture and use of electric transmissiona and distribution equipment
Focus on Natural Gas and Petroleum Industry
Why does EPA say it is focusing on the natural gas and petroleum industry? The primary GHG emitted in methane which is 20 time as potent as CO2 at warming the atmosphere. The potency of methane makes this sector the fifth largest source category covered by the mandatory reporting rule. Also, the vast infrastructure associated with the industry. This from EPA’s preamble:
The U.S. petroleum and natural gas industry encompasses hundreds of thousands of wells, hundreds of processing facilities, and over a million miles of
transmission and distribution pipelines.
While the scope of emissions may argue for inclusion in the rule, the difficulty always has been making accurate calculations of fugitive methane emissions from the oil & gas sector. Through this rulemaking EPA wants to change some of the methodologies for measuring fugitive and vented emissions. This from EPA:
Whereas the initial proposal focused on comprehensive leak detection and direct measurement, this proposal includes direct measurement of emissions for only the most significant emissions sources, and the use of engineering estimates, emission modeling software, and emission factors, as appropriate, for other sources.
These fugitive emissions from leaks in valves in hundreds of miles of pipes has always made this a difficult area to measure accurately. No doubt this will be the most complex area to measure.
Over the last several years, interest in addressing fugitive emissions of methane from natural gas storage and piping were strong carbon offset projects. The question now arises whether EPA is contemplating mandatory standards for this sector versus placing incentives for voluntary projects.
Is the reporting rule an indication EPA may enact mandatory rules that include specifications for the design of valves on piping to reduce GHG emission? Can you imagine the complexities involved in writing such a rule? Further evidence that command and control regulation is not the right approach to reducing GHG emissions.