August 14, 2014

As Climate Debate Rages On, A New Focus on Methane Emissions

While carbon dioxide emissions have garnered most of the attention in recent months, the Obama administration has also turned its focus to emissions of another greenhouse gas: methane. In March, the administration released a 15-page interagency guidance document that laid out preliminary steps for reducing methane emissions. According to that document, methane currently accounts for approximately 9 percent of greenhouse gas emissions in the United States and is 20 times more potent as a greenhouse gas than carbon dioxide.

In the United States, emissions of methane come from the following sectors: agriculture (36 percent); natural gas systems (23 percent); landfills (18 percent); coal mining (10 percent); petroleum systems (6 percent); and wastewater treatment systems (2 percent). This update focuses specifically on methane emissions from natural gas systems, but stakeholders from each of the above-referenced industries should closely monitor actions taken on methane in the coming months. The administration is already undertaking action to reduce methane emissions across multiple sectors and industries, which could impact regulatory compliance decisions to avoid enforcement action by federal regulators.

Below is a brief summary of actions that have been taken to date, further actions that are expected in the coming months from the administration, and additional informational items relevant to natural gas industry stakeholders.

  • The administration has convened a series of roundtables, led by Energy Secretary Moniz, to discuss ways to reduce methane emissions from the natural gas sector.
  • In April, the Environmental Protection Agency (EPA) began reviewing several technical white papers looking at methane emissions from the oil and natural gas sectors, and potential mitigation options.
  • In July, the EPA inspector general released a report claiming that EPA has done an insufficient job of reducing methane emissions from natural gas pipelines. The report went on to say that voluntary programs at EPA have not done much to reduce emissions, and argued that EPA should collect new data on the issue.
  • In late July, the Department of Energy (DOE) announced steps to prevent methane leaks from natural gas transmission and distribution systems. Examples are:
    • New DOE energy efficiency standards for new natural gas compressors.
    • DOE will advise the Federal Energy Regulatory Commission (FERC) to examine methods by which industry can achieve enhanced cost recovery, in order to modernize transmission infrastructure.
    • DOE will conduct outreach to industry stakeholders to promote federal loan guarantees for reducing methane emissions from the transmission and distribution systems.
  • This fall, after evaluating the technical white papers, the EPA will determine if regulatory action is necessary to reduce emissions. EPA could utilize Sections 111 and 182 of the Clean Air Act, among other provisions of law.
  • In January of 2015, DOE will release its first installment of the Quadrennial Energy Review (QER), which will identify opportunities to reduce methane emissions from natural gas processing, transmission, storage and distribution.

President Obama has placed a major focus on his Climate Action Plan to reduce the causes and impacts of climate change. The president's environmental legacy, in part, depends on completing many action items related to climate change before the end of 2016. Given methane's potency as a greenhouse gas, and the fact that the administration has focused almost entirely on carbon dioxide up to this point, stakeholders should be prepared for the administration to move forward aggressively and quickly on methane emissions from the natural gas sector in the coming months.

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