Tuesday, January 13, 2015

Science and Strategies to Curb Methane Emissions from the Oil and Natural Gas Sector

According to a December 2014 policy brief from the Institute for Policy Integrity http://policyintegrity.org/
The oil and natural gas sector is the nation’s largest industrial emitter of methane: this primary component of natural gas is a potent climate pollutant up to 86 times more powerful than carbon dioxide on a 20-year timeframe.

Currently the United States loses at least 1 to 3 percent of its total natural gas production each year when methane is leaked or vented to the atmosphere during the production, processing, transmission, storage, and distribution of natural gas and oil. This is a waste of a valuable resource, as well as a source of greenhouse gas pollution. Curbing methane pollution is critical to meeting the nation’s climate protection targets, as well as the Administration’s new agreement with China, which commits the United States to reducing its total greenhouse gas emissions 26 to 28 percent below 2005 levels by 2025.

The U.S. Environmental Protection Agency’s (EPA) proposed Clean Power Plan is expected to result in increased use of natural gas, as combined cycle gas power plants will likely replace coal-fired power plants in some states. Reducing methane emissions from the oil and natural gas sector would further increase the climate benefits of switching from coal to natural gas.

Recent studies show that EPA can reduce methane pollution from the oil and gas industry by nearly 50 percent, using available, low-cost measures. Because of the commercial value of the natural gas that can be conserved, many of these measures pay for themselves by redirecting natural gas back to productive use as a fuel source for electricity and heating. And even without the resale value of natural gas, these measures can still be cost-benefit justified due to the social cost of methane emissions,4 as well as the health benefits of reduced smog and hazardous air pollutants, which are co-emitted with methane during oil and natural gas production.

This policy brief provides an overview of the science of methane, oil and gas sector methane emissions, the history of federal action, available methane emission reduction opportunities, and potential regulatory pathways to secure methane reductions under the Clean Air Act. Because methane is so potent in the near-term, federal regulation to curb its release can reduce imminent climate effects and lower the overall cost of climate mitigation.
Available Methane Reduction Opportunities

Available, low-cost technologies and practices can be deployed throughout the oil and natural gas lifecycle to capture methane currently lost due to leaks, venting, and flaring. Because methane is the primary component of natural gas, it can be sold for end use—capturing value while reducing climate-forcing pollution.

Recent studies show that substantial reductions in methane and volatile organic compounds (VOCs) are achievable at low or zero cost (assuming the captured gas is sold), using available technology:
• A 2014 report by ICF International found that a 40 percent reduction in fugitive methane releases and 44 percent reductions in VOCs and hazardous air pollutants could be attained at a cost of one cent per thousand cubic feet (mcf) of natural gas. Ninety percent of the reductions achievable were described in EPA’s five technical papers released this spring;
• A 2014 report issued by Clean Air Taskforce, Natural Resources Defense Council, and Sierra Club found that fugitive methane can be reduced by 42 to 48 percent using available methods at an annual cost equal to 1.5 percent of the industry’s annual revenue;
• A 2013 report by the World Resources Institute found that three methane capture and avoidance technologies (plunger lifts, low-bleed pneumatic devices, and leak detection and repair systems) could cut methane emissions across the natural gas system by 30 percent; and
• A 2012 report by the Natural Resources Defense Council identified ten commercially available, low-cost ways for operators to capture methane that would otherwise be leaked or vented from oil and gas production, processing, and transportation systems. Many of these technologies pay for themselves or turn a profit in one to two years, due to the resale value of the captured gas.

The voluntary participants in EPA’s Natural Gas STAR program have also shared information on methane emission reduction technologies and practices, and their revenue-generating potential at different natural gas prices and timelines. Available control measures include:

Leak detection and repair (“LDAR”)
• Process: Infrared cameras and other advanced equipment is used to detect and repair methane leaks from well-pads, processing plants, compressor stations, and distribution facilities.
• Reduction capacity: Approximately 1.70-1.80 million metric tons of methane per year.
• Economics: Using a gas price of $4/mcf, these measures are usually profitable, due to the value of the gas conserved by finding and fixing leaks.

Green completions for oil wells
• Process: Closed-loop systems capture liquids and gases coming out of the well during the initial “completion” stage of production, then route fluids and gases to a tank for separation to enable the sale or reuse of gas.
• Reduction capacity: Approximately 0.26-0.50 million metric tons of methane per year.
• Economics: Green completions cost between $8,700 and $33,000 per well, and can generate between $28,000 and $90,000 per year, per well, in captured natural gas revenue.

Minimizing well venting during liquids unloading
• Process: Water from underground formations can accumulate in oil and gas wells, slowing production. Instead of “blowing down” such wells by opening them to the atmosphere—a process that vents large amounts of methane—automated plunger lifts can efficiently lift liquids out of the well, reducing vented emissions during liquids unloading by up to 90 percent.
• Reduction capacity: Approximately 0.12 million metric tons of methane per year.
• Economics: Installing automated plunger systems costs between $7,000 and $15,000 per well, and can return up to three times that investment within the first year, when accounting for the resale value of the captured gas.

Low-bleed/no-bleed pneumatic equipment
• Process: Gas-driven pneumatic equipment is used to operate pumps, regulate gas flow and pressure, and control valves throughout the natural gas production, processing, and distribution lifecycle. Replacing high-bleed pneumatic equipment, which is designed to continuously vent methane, with low-bleed or no-bleed devices, can sharply reduce methane emissions from pneumatic equipment.
• Reduction capacity: Approximately 0.72-0.87 million metric tons of methane per year.
• Economics: Based on projected gas capture and natural gas resale values, low-bleed devices, which cost about $3,000 per replacement, can generate a modest profit within one year, and no-bleed devices within two years.
The full report is available free of charge here: Download PDF.
by Jayni Foley Hein
Institute for Policy Integrity http://policyintegrity.org
Published: December 19th, 2014

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