Should Methane Emissions Regulations Be Prescriptive or Performance Based?

Regulatory shortcomings have led to inadequate methane reductions in the U.S.

Background

In the United States, legal strictures on emissions of air pollutants from crude oil and natural gas production, processing, and transmission systems originated in 2012 with the promulgation of the New Source Performance Standards of 40 CFR 60 Subpart OOOO, which regulated emissions of volatile organic compounds (VOC). This was followed in 2016 by 40 CFR 60 Subpart OOOOa, which regulated emissions of greenhouse gases, including specifically methane. Subparts OOOO and OOOOa imposed similar, though not identical, restrictions on natural gas emissions. The measures in OOOO that limited VOC emissions also reduced methane emissions as a co-benefit.

On 13 August 2020, the U.S. Environmental Protection Agency (EPA) promulgated final rules amending 40 CFR 60 Subpart OOOO and Subpart OOOOa. Policy amendments deregulated methane emissions in the production and processing segments and deregulated both methane and volatile organic compound emissions in the transmission and storage segment. Technical amendments reduced inspection and reporting requirements and simplified the process of certifying new emission detection technology. The 2020 amendments, while rich in symbolism, are in general less substantive than both proponents and opponents have claimed.

The EPA tracks about 250 distinct sources of methane emissions in petroleum and natural gas systems. Of these, only a fraction are subject to regulatory controls prescribed by 40 CFR 60. While regulated infrastructure are among the largest emission sources, a number of very significant sources are clearly inadequately regulated for environmental protection.

Devised at a time when the technology for the measurement of natural gas emissions was relatively immature, OOOO and OOOOa regulations are highly prescriptive. Unfortunately, methane reductions resulting from these regulations have been disappointing. In 2016, the Obama administration pledged to reduce methane emissions from the oil and gas sector by 40-45% by 2025. However, methane emissions declined by only about five percent in the eight years following the promulgation of the OOOO rules meant to control emissions of natural gas.

Figure 1. Methane emissions, from emission factor estimates of OOOO and OOOOa regulated segments, 1990-2018, normalized to emissions in 2012. Data: [EPA, 2020b, Additional Information Methodology Annexes]. Further Details: Kleinberg, EPA Methane Emission Controls, Obama vs Trump vs Biden: What Needs to Be Fixed and What Should Be Left Alone.

Observations

• Older and low production facilities cannot be neglected in methane emission control regulations. Both populations (which overlap) are responsible for substantial fractions of total upstream methane emissions. Gathering pipelines, which are not regulated by EPA and inadequately regulated by the Pipeline and Hazardous Materials Safety Administration (PHMSA), have been found to be the origin of many of the largest leaks associated with the production and processing segments.
  
  
• Some very important sources of vented methane have been inadequately mitigated by both Obama- and Trump-era EPA, and by industry. These include routine emissions associated with normal and abnormal operations of pneumatic controllers and oil storage tanks, and malfunctioning and unlit flares. These sources collectively account for roughly a third of the methane emitted by the entire U.S. oil and gas industry.
  
  
• The transmission and storage segment is responsible for 14-17% of emissions of the oil and gas industry. Therefore regulation of this segment should be restored and strengthened. Emissions from liquefied natural gas facilities have not been assessed by field measurements. In view of the recent growth of this industry sector, these measurements should be given high priority.
  
  
• Newly promulgated rules that encourage the development and use of advanced means of methane emission detection and measurement are critical to the effort to reduce these emissions and should be retained in any new regulations.

Recommendations

The complexities of oil and gas production do not lend themselves to prescriptive regulation. Current regulations do not pay adequate attention to intentional and unintentional venting occurring in the course of routine operations. Thus, some of the largest emissions are due to unregulated vents. Performance-based regulation would encourage engineers to solve problems using locally appropriate solutions, rather than relying on a prescriptive checklist approach that cannot anticipate every eventuality.

The key to performance-based regulation is accurate measurement, and this capability has improved rapidly in recent years. Aircraft-based, facility-scale measurements encompassing tens of thousands of facilities spread over tens of thousands of square kilometers are increasingly common and are economically viable today. However such measurements are not compliant with the current regulatory regime, which focuses on individual components. Therefore the current regulatory regime must be completely rethought.

Very large but intermittent sources play an important role in the total methane emission budget of the oil and gas industry. Pilot studies indicate that whereas occasional surveys of individual facilities are likely to miss large emission events, company-wide surveys may well produce statistically significant data on environmental performance. The more assets a company controls, the more likely this is to be true.

Another solution to the problem of intermittency is the use of ground-based continuous monitoring. Pilot studies of such systems are underway.

Measurements are logically performed by third-party contractors using methods certified by a central authority, such as the Environmental Protection Agency. This service-company model is familiar to the oil and gas industry. Measurements most appropriate for comprehensive measurement – aircraft surveys several times a year and ground-based continuous surveillance sensors – scale well and are economic. In one model, all companies operating in a geographical area pay a proportionate share of survey expense.

At the present commercial level of measurement sensitivity at facility scale, 40-80% of total methane emissions can be found and remediated. Measurement precision and accuracy of both occasional aerial and continuous ground-based measurements are expected to improve over the next decade, allowing regulations to become more stringent in future years.

Prescriptive vs. Performance-based Regulation

Robert L. Kleinberg, a Senior Fellow of the Boston University Institute for Global Sustainability, is Principal of Presidio Energy Technology and adjunct senior research scholar at the Center on Global Energy Policy of Columbia University.

Post adapted from the author’s abstract accepted for presentation at the first International Association for Energy Economics Online Conference, 7-9 June 2021.

The opinions expressed herein are those of the author and do not necessarily represent the views of the Boston University Institute for Global Sustainability.