11 Things O&G Operators Should Know About Greenhouse Gases
July 17, 2015

Everyday there are more and more new reports and studies on greenhouse gases (GHGs), climate change and the oil and gas industry. What matters to the oil and gas industry is what are the issues, how does this affect operations and what do we need to do. The USEPA has taken a path of command and control regulations over voluntary actions in regards to reporting GHGs. Regulators are now poised to control GHG emissions from oil and gas operations.

The current GHG issues make it even more important for operators to know about GHG emissions and how the future regulations will impact their operations. Future GHG regulations for O&G operations will impact the cost of doing business in regards to needing permits, paying emission fees and possible carbon taxes and installing and operating air pollution controls.

This is not an issue for just the environmental department; management, engineering, operations and exploration and purchasing departments are involved in dealing will how to operate in a “Carbon Constrained Environment” that is expected in the future.

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1. What are the greenhouse gases of concern for oil and gas sector?

2. What are the sources of each of the GHGs?

 Carbon Dioxide (CO2) and Nitrous Oxide (N2O)

CO2 and N2O are emitted primarily from combustion of natural gas, diesel and gasoline used in O&G processes and auxiliary fuel burning equipment.  Typical emission sources include

  • Flares
  • Engines
  • Heaters
  • Reboilers 

CO2 is emitted from natural gas venting and depends on the CO2 concentration of the gas.

Methane (CH4)

CH4 is emitted from the venting of natural gas to the atmosphere. The amount of methane emitted is dependent on the percentage of CH4 in the gas vented. Typical methane venting sources include:

  • Storage tanks (crude oil, condensate, produced water)
  • Natural gas pneumatic devices
  • Natural gas driven pneumatic pumps
  • Well venting for liquids unloading
  • Glycol dehydrator vents
  • Gas well venting - well completions and workovers
  • Reciprocating and centrifugal compressor seals
  • Well test venting
  • EOR injection pump blowdown
  • Gas sweetening units (amine units)
  • EOR hydrocarbon liquids dissolved CO2
  • Fugitive emissions - equipment leaks

3. What are Global Warming Potentials (GWP) of GHGs

Each GHG gas is reported to the EPA in terms of the GHG’s carbon dioxide equivalent (CO2e). CO2e calculations require converting the mass (lbs or kilograms) of each GHG gas into its CO2e mass in kilograms using the global warming potential (GWP) factor. 

Each GHG gas is assigned a GWP to account for how much heat a greenhouse gas traps in the atmosphere.  The GWPs are found in 40 CFR 98 Subpart A, Table A-1.  The GWPs are used to convert the mass amount of the specific GHG to Carbon Dioxide Equivalent (CO2e).  The GWP factors for CH4 and N2O were updated for the 2013 reporting year.  

GHG Name

Chemical formula

Global warming potential (GWP) factor

Carbon dioxide

CO2

1

Methane

CH4

25

Nitrous oxide

N2O

298

 

For example, if a facility emits 1000 metric tons of CH4, then its CO2e would be calculated as: 

(1000 metric tons CH4)(25 tons CO2e/ton CH4) = 25,000 metric tons CO2e. 

4. What regulatory agency has jurisdiction over regulation of greenhouse gases (GHGs)?

The USEPA has jurisdiction over the regulation of GHGs.

When the USEPA promulgates GHG regulations, they can (and typically do) delegate authority to administer/enforce the regulations to a state, local or tribal authorities provided certain criteria are met. 

5. Are any limits to how much greenhouse gases an O&G production facility can emit?

At this time, there are no limits on GHG emissions from typical O&G production facilities.

O&G production facilities that trigger Prevention of Significant Deterioration (PSD) permitting and have emissions of greater than 100,000 tons CO2e per year may have to use Best Available Control Technology (BACT).

6. What are the reporting requirements for greenhouse gas emissions from O&G? 

The USEPA’s Mandatory Greenhouse Gas Reporting rules in 40 CFR Part 98 require annual GHG emissions reporting if a “facility” emits 25,000 tons or more per year of GHG. GHGs are reported in terms of CO2e of GHGs per year.

The two subparts of the GHG reporting rule affecting the oil and gas industry include: 

  • 40 CFR 98 Subpart C – separate requirement for stationary combustion sources (e.g., engines, heaters, etc.) affecting offshore, gas gathering, gas processing and transmission, gas storage, and LNG facilities.  The first reporting year for Subpart C was 2010.
  • 40 CFR 98 Subpart W – Petroleum and Natural Gas Industry – primarily flare/vent/fugitive sources.  For oil and gas production facilities, the rule includes stationary and portable combustion sources (e.g., engines, heaters, etc.).  

For the onshore petroleum and natural gas production category, operators must calculate actual GHG emissions and aggregate all GHG emissions from affected emission sources located in a “Basin.”  The aggregated emissions from each “Basin” are considered a facility and the GHG reporting unit.  The “Basin” map used is a map by the Am. Assoc. of Pet. Geol. (AAPG) Geologic Provinces Code Map: AAPG Bulletin, Vol. 75, No. 10 (October 1991).  See AAPG Basin Map Link

GHG reporting is for actual emissions during a calendar year.

Subpart W has different reporting requirements based on the source categories listed below:  

  • Onshore petroleum & natural gas production
  • Offshore petroleum & natural gas production
  • Onshore natural gas processing plants
  • Onshore natural gas transmission
  • Underground natural gas storage
  • Liquefied natural gas (LNG) storage
  • LNG gas import & export equipment
  • Natural gas distribution

7. How much is 25,000 metric tons CO2e?

 25,000 metric tons CO2e is equivalent to approximately:

  •  Combustion of approximately 1.3 million standard cubic feet per day (MMSCFD) of natural gas for an entire year (varies with BTU value of the natural gas burned)
  • Venting 143 thousand standard cubic feet per day (MSCFD) of methane for an entire year

8. What quantity of greenhouse gases are emitted by O&G operators in the United States?

The Intergovernmental Panel on Climate Change (IPCC) publishes estimates of GHG emissions from various sectors of the economy with O&G included in the estimates. Below are tables and figures from the EPA document No. 430-R-15-004, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990 – 2013, April 15, 2015. Oil and gas operations are split between “Natural Gas Systems” and “Petroleum Systems” in the figures and tables listed below.

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  • 2013 Natural gas systems:                195.2 million metric tons CO2e per year
  • 2013 Petroleum Systems:                  31.2 million metric tons CO2e per year
  • 2013 US Total GHG – all sectors:   5,636.6 million metric tons CO2e per year

9. Are there future plans to regulate the amount of GHG emissions from O&G operators?

Yes, there are plans to regulate methane emissions from O&G operations. This expected to be in the form of emission standards/limitations in how much methane emission can be emitted by an O&G facility, type of equipment and/or type of process.

In 2015, the White House posted its Climate Action Plan and other EPA related news indicated that the EPA will propose GHG regulations related to methane emissions from O&G operations. This could involve additional emission standards in 40 CFR 60 Subpart OOOO or a completely new regulation to address methane emissions.

The expected timeline is for the regulations to be proposed during the summer of 2015 and final rules in 2016.

Some potential emission sources targeted may include: oil well completions, pneumatic pumps, leaks from well sites, gathering, boosting and compressor stations.

10. Why reduce GHG emissions now?

Knowing your facilities GHG emissions and reducing methane emissions now can ensure your facilities are exempt when new rules are proposed. Note that the applicability date for the new rules are the proposal date, not the promulgation date. So reducing emission early and help you stay out of potential cumbersome recordkeeping and reporting requirements that could apply.

There have been news reports that are calling for taxes on GHG emissions, so keeping your emissions low, can save you money.

11. What are methods to reduce GHGs from O&G facilities? 

This is where HY-BON excels and can help your company identify, quantify and rectify (IQR) your facilities’ GHG emissions. Using our IQR service and Vent Gas Management (VGM) system and VRU and combustor technologies, HY-BON can:

  • Create Emission Inventory. Conduct site visits to gather inventory data to create a baseline of air emission sources for your facilities.
  • Implement Leak Detection and Repair (LDAR) Program. Find leaking components using FLIR cameras and volatile organic analyzers (e.g., thief hatches, valves, flanges, seals) so that leaks can be quickly repaired.
  • Measure tanks Vents. Measure storage tank vent gas streams to quantify methane and VOCs emissions.
  • Install and operate emission controls for storage tanks.
    • Design and install vapor recovery units (VRU) to recover the gas.
    • Install combustors to burn the methane gas.