Noose Tightens Around Fugitive Emissions

This week, the US Environmental Protection proposed a new rule for the oil and natural gas industry to report data on greenhouse gas emissions from their operations. If it goes into effect as planned next year, the data will go a long way toward settling the question of whether natural gas is a cleaner alternative to oil or coal.

Natural gas is composed primarily of methane, a powerful greenhouse gas, but nevertheless it has been touted as a “cleaner” fuel based on its relatively low emissions when burned. If you factor in fugitive emissions and other releases of burned and unburned gas all along the fuel supply chain, including production, processing, transmission, storage, and distribution, some studies strongly suggest that natural gas isn’t such a green hero after all.

A New Rule For Fugitive Emissions

The proposed rule for emissions reporting was published on Monday in the Federal Register, but for those of you on the go a handy EPA factsheet has most of the lowdown.

The rule is part of a much broader greenhouse gas reporting requirement that EPA established back in 2009, covering greenhouse gasses from 29 different source categories cutting across a wide range of industry sectors.

Conspicuously absent from that list of 29 was the petroleum and natural gas systems category. Requirements specific to that sector were rolled out starting in 2010 and they have been tweaked since then.

The new rule is aimed at improving the quality of the data and making it more accessible to analysis by EPA and the public.

Of particular interest, EPA specifically notes that these latest revisions will improve its ability to respond to media inquiries.

Here are some key areas that will be modified:

1. Units of measure, terms, and definitions will be revised for consistency and clarity, while presenting a more accurate accounting of a facility’s operations. The revisions will also clearly identify the form of data required for each source type.

2. Calculation methods for certain operations will be revised for clarity and simplicity. Gas venting and flaring is one of several operations included in this category.

3. Site-specific gas composition data for natural gas transmission compression and underground natural gas storage facilities will be expanded.

4. Safety issues relating to the reporting process will be addressed. The revisions will also replace the current requirement for Best Available Monitoring Methods (BAMM). Despite its name, BAMM has proved to be an obstacle to transparency according to our friends over at the Environmental Defense Fund.

5. Procedures for estimating missing data will be refined.

Shell Quits Shale Ahead Of New Rule

For the record, as of 2012 the greenhouse gas reporting rule covered more than 2,000 oil and gas activities, and EPA does not expect the revisions to result in the addition of previously unrecorded facilities.

Actually, considering the looming natural gas bubble in the US, that list could end up being somewhat shorter in a few years.

Just yesterday our friends over at Fuel Fix reported that Shell has taken the knife to its shale gas operations in the Americas, citing disappointing results in Eagle Ford Shale in South Texas and the Rocky Mountain region as well as areas of Kansas and Oklahoma (yes, that Shell).

Fuel Fix takes note of the fact that Shell is far from alone in its concern over persistently low profit margins in the shale sector.

Meanwhile EPA has been flexing its regulatory muscle more aggressively (see here and here for related issues).

With improved transparency and more public access to fugitive emissions data from oil and gas operations, you can expect a lot more focus on fracking after the rules go into effect. Coincidence or not, Shell’s exit from the shale scene could be the start of a stampede.

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