The U.S. Environmental Protection Agency (EPA) has proposed new standards to reduce greenhouse gas emissions (GHG) and volatile organic compounds (VOC) from the oil and natural gas industry. The proposal is a part of the Obama administration’s strategy to reduce methane emissions from the oil and gas sector by 40 to 45% from 2012 levels by 2025.
Methane, the key constituent of natural gas, is a potent GHG with a global warming potential more than 25 times greater than that of carbon dioxide. Methane is the second most prevalent greenhouse gas emitted in the United States from human activities. The EPA said nearly 30% of those emissions come from oil production and the production, transmission and distribution of natural gas. Drilling and fracking operations are the single largest source of U.S. methane emissions, which account for about 9% of the greenhouse gas emissions.
The proposal is an expansion of standards issued in 2012 and is expected to reduce the equivalent of 7.7 million to 9 million metric tonnes of carbon dioxide in 2025 at new and modified facilities, according to the EPA.
The release of the proposed standards came about two weeks after the EPA unveiled a sweeping rule that aims to reduce national carbon emissions from the power sector to 32% below 2005 levels by 2030.
“We can continue to accelerate the transition to a clean-energy economy by capturing fuel that would otherwise be wasted, while also preventing pollution that harms our climate and the health of our families and communities,” said Janet McCabe, acting assistant administrator for the EPA’s Office of Air and Radiation.
However, the proposal would only achieve up to a 30% reduction in methane emissions, McCabe said. The proposed standards will complement voluntary efforts, including EPA’s Methane Challenge Program, and are based on practices and technology currently used by industry.
To cut methane and VOC emissions, the proposal requires:
- Finding and repairing leaks;
- Capturing natural gas from the completion of hydraulically fractured oil wells;
- Limiting emissions from new and modified pneumatic pumps, and;
- Limiting emissions from several types of equipment used at natural gas transmission compressor stations, including compressors and pneumatic controllers.
Around 15,000 wells will be covered under the regulations, the EPA said. Existing sources will account for 90% of oil and gas industry emissions in 2018, and not regulating them will mean the United States will struggle to meet its United Nations climate talks pledge.
The EPA has estimated that the cost for companies to achieve the proposed standards will be USD 170-180 million in 2020 and USD 280-330 million in 2025. The benefits however, outweigh the costs. The EPA estimated those benefits to be in the range of USD 200-210 million in 2020 and USD 460-550 million in 2025.