Reducing methane emissions from the oil and gas sector

Federal agencies are pursuing regulatory and voluntary steps to reduce methane emissions from the oil and natural gas production system, the largest manmade source of this potent greenhouse gas.

On January 14, 2015, the Environmental Protection Agency (EPA) announced a goal to cut methane emissions from the oil and gas sector by 40–45 percent from 2012 levels by 2025.

As part of achieving this goal, EPA adopted regulations on May 12, 2016, for new and modified sources of methane emissions from the oil and natural gas sector.  This builds on the agency’s 2012 rule for new source performance standards (NSPS) and hazardous air pollutant regulations for oil and gas production and gas processing, transmission and storage facilities.

Separately, the Department of the Interior (DOI) has proposed its own regulations to be finalized in 2016 to reduce methane emissions from certain wells.
EPA also plans to work collaboratively with industry and states, including expanding its voluntary Natural Gas Star program, to reduce methane from existing oil and gas operations.

Steps to reduce methane from other sources, such as landfills and coal mines, are also part of President Obama’s Climate Action Plan.

What is methane?

Methane, or CH4, is the main component of natural gas. When combusted as fuel, natural gas produces half as much carbon dioxide emissions as coal, and one-third less than oil (per unit of energy produced). However, natural gas that is released into the atmosphere without being combusted is a potent greenhouse gas.

Why is it important to reduce methane emissions?

Methane is the second biggest driver of climate change. It is much more potent than carbon dioxide (CO2) at increasing the atmosphere’s heat-trapping ability, but it remains in the atmosphere a much shorter time (a little more than a decade compared with hundreds of years for CO2).

Averaged over a 100-year time frame, the warming potential of methane is about 21 times stronger than that of CO2. However, in a 20-year time frame, it is 72 times more potent. (The most recent report by the Intergovernmental Panel on Climate Change raises estimates of the global warming potential of methane to 34 times stronger than CO2 for the 100-year time frame, and 86 times stronger for the 20-year time frame. However, the earlier estimates are still used to maintain comparability among U.S. greenhouse gas inventory reports.)
Because methane is potent and short-lived, reducing methane emissions can have a more immediate benefit, and is especially important at a time of growing U.S. oil and natural gas production.

What are the primary sources of methane emissions in the United States?

Natural gas and petroleum systems are the largest emitters of methane in the U.S., according to EPA estimates. These emissions come from intentional and unintentional releases.

Agriculture, solid waste landfills, and coal mines are also major sources and are addressed by other EPA programs.

Figure 1: 2014 U.S. Methane Emissions, By Source

In 2014, U.S. methane emissions totaled 731 million metric tons of carbon dioxide equivalent.

Source: U.S. Environmental Protection Agency, “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2013” (Washington, DC: U.S. Environmental Protection Agency, 2015),

How much methane is released in oil and natural gas production and how will EPA improve the accuracy of measurements?

Methane is released unintentionally and intentionally from oil and gas systems. According to EPA, natural gas and petroleum systems were responsible for nearly one-third of methane emissions in 2014. The rate of methane emissions from the sector has decreased in recent years, even as natural gas production has surged.

However, independent studies estimate a wide range of leak rates from natural gas production, from 0.71 to 7.9 percent. More comprehensive studies are needed for accurate results.

EPA has committed to examining options for applying remote sensing and other technologies to improve methane emissions data accuracy and transparency, and strengthening reporting requirements for methane in its Greenhouse Gas Reporting Program.

Why is methane intentionally released?

In the production process, small amounts of methane can leak unintentionally. In addition, methane may be intentionally released or vented to the atmosphere for safety reasons at the wellhead or to reduce pressure from equipment or pipelines.

How does EPA address methane emissions from new oil and natural gas wells?

EPA adopted a rule in May 2016 under Section 111(b) of the Clean Air Act. It requires operators of new oil and gas wells to find and repair leaks, capture natural gas from the completion of hydraulically fractured oil and gas wells, limit emissions from new and modified pneumatic pumps, and limit emissions from several types of equipment used at natural gas transmission compressor stations, including compressors and pneumatic controllers. EPA estimates that this rule could prevent the emission of 510,000 short tons of methane in 2025, which is the equivalent of 11 million metric tons of carbon dioxide.

EPA already regulates Volatile Organic Compounds (VOCs, which are ozone-forming pollutants) from new oil and gas production sources, which has the side benefit of also reducing methane. The new rule is also expected to reduce other pollutants, including 210,000 tons of VOCs and 3,900 tons of air toxics in 2025.In addition, on January 22, 2016, the Department of the Interior proposed a Methane Waste and Reduction Rule to reduce methane emissions from all wells on lands managed by the Bureau of Land Management and Indian lands.

The proposal from DOI will update rules and require oil and gas producers to reduce methane emissions from operations. It proposes the first-ever limits for flaring of natural gas as well as increased disclosure requirements. The DOI proposal would prohibit venting except in specified circumstances, require pre-drill planning for leak reduction, and increased use of leak-detection technology.

What entities will be covered by the regulations?

The EPA rule covers new and modified oil and gas production sources, and natural gas processing and transmission sources. EPA seeks to reduce emissions from five specific sources:

  • natural gas well completion
  • oil well completions
  • gathering and boosting stations
  • natural gas processing plants
  • natural gas compressor stations

In developing new standards, EPA focused on in-use technologies, current industry practices, emerging innovations and streamlined and flexible regulatory approaches to ensure that emissions reductions can be achieved as oil and gas production and operations continue to grow.

The DOI proposal would affect all oil and gas wells on federally owned onshore lands, amounting to 100,000 wells responsible for 5 percent of US oil supply and 11 percent of gas supply.

How do EPA’s methane actions complement existing regulation?

The actions work with EPA’s new source performance standards (NSPS) and hazardous air pollutant regulations, finalized in 2012. They already apply to oil and gas production and gas processing, transmission, and storage facilities, and the 2016 rule applies them directly to methane as well.

While primarily aimed at reducing smog-forming and toxic air pollutants, known as volatile organic compounds (VOCs), the NSPS rules also had the indirect effect of reducing methane emissions. They include the requirement to use "green completions" at natural gas wells to limit emissions from hydraulic fracturing, a rapidly growing means of drilling and production. In a “green completion,” special equipment separates hydrocarbons from the used hydraulic fracturing fluid, or flowback, that comes back up from the well as it is being prepared for production. This step allows for the collection (and sale or use) of methane that may be mixed with the flowback and would otherwise be released to the atmosphere. Because the same technologies in place to reduce VOC emissions would also be used to reduce methane, no additional steps would be necessary to reduce methane.

In its January 2015 announcement, EPA said it will develop new guidelines to assist states in reducing VOCs from existing oil and gas systems in areas that do not meet the ozone health standard and in states in the Ozone Transport Region. Like the earlier NSPS, these guidelines will also reduce methane emissions.
The final regulation issued in May 2016 will extend emission reductions further downstream from the 2012 rules and cover certain equipment used in the natural gas transmission sector in addition to equipment covered by regulation in 2012.

How does EPA propose to address methane emissions from existing oil and gas wells?

On March 10, 2016, President Obama and Canadian Prime Minister Justin Trudeau issued a joint statement including several actions to reduce methane emissions from existing oil and gas wells. EPA announced it would immediately begin developing regulations for existing oil and gas wells and would, in April 2016, begin the formal process to require companies operating methane emissions sources to provide information to assist in development of standards to decrease those emissions.

On May 12, 2016, EPA issued a draft information collection request (ICR) that would require oil and gas companies to provide extensive information needed to reduce methane emissions from existing oil and gas sources. This will help EPA identify the most significant sources of emissions, the kinds of technologies that work best to reduce them, and how those technologies can be applied effectively. In addition, EPA plans to issue a voluntary request for information on innovative strategies to accurately and cost-effectively locate, measure and reduce methane emissions.

Canada intends to publish an initial phase of proposed regulations of methane from new and existing oil and gas wells by early 2017.

The countries committed to work collaboratively to improve methane data collection and emissions quantification, and transparency of emissions reporting in North America, and share knowledge of cost-effective methane reduction technologies and practices. They also agreed to jointly endorse the World Bank’s Zero Routine Flaring by 2030 Initiative, and report annually on progress.  

What other non-regulatory steps has the administration announced it will take?

The president requested in his fiscal year 2017 budget proposal $15 million for the Department of Energy (DOE) to develop and demonstrate more cost-effective technologies to detect and reduce losses from natural gas transmission and distribution systems, including leak repairs, and developing next-generation compressors. The president’s budget also proposes $10 million to launch a program at DOE to enhance the quantification of emissions from natural gas infrastructure for inclusion in the national Greenhouse Gas Inventory in coordination with EPA. Congress must appropriate funding for these programs for them to be implemented. DOE will also be responsible for other recommendations to reduce emissions from the natural gas system.