Monthly Archives: May 2017

Richard Meyer Understanding Updates to the EPA Inventory of Greenhouse Gas Emissions from Natural Gas Systems

Understanding Updates to EPA Inventory of GHG EmissionsThis month, I released an update to my report on the Environmental Protection Agency (EPA) Inventory of Greenhouse Gas Emissions and Sinks and what it says about methane emissions from natural gas systems. In this post, I’ll cover some of its conclusions and the role gas utility distribution systems play in the emissions story.

The increasing prominence of natural gas in the U.S. energy economy has focused public and academic attention on the role of methane emissions in shaping our understanding of the environmental benefits of natural gas. We can only do this through good science, solid measurements, and quality data.

Importantly, the Inventory is continuously updated. The EPA routinely incorporates new data from field studies of natural gas systems and industry data to help refine our understanding of emissions in the sector. Each iteration gives us a new yet evolving insight into the industry’s greenhouse gas emissions.

What did we find this year? The Inventory shows, once again, that natural gas systems have low methane emissions shaped by a declining trend.

Industry-wide Emissions Have Declined

The U.S. natural gas industry is made up of thousands of wells and drilling rigs, well completion equipment, gathering systems, processing facilities, underground gas storage formations, LNG terminals and storage, and a 2.5 million mile transmission and distribution network. The natural gas “industry” is in reality at least nine separate sub-industries, all with distinct processes and markets.

The EPA inventory simplifies this picture. Adhering to protocols from the United Nations Framework Convention on Climate Change, the natural gas industry is often reported as one major category, though the EPA divides it into four distinct stages: field production, processing, transmission and storage, and distribution.Natural Gas Delivery System Playbook 2016The Inventory shows that annual methane emissions from natural gas systems have fallen 15 percent since 1990, driven in part by large declines from the processing, transmission, storage and distribution stages.

Methane Emissions from Natural Gas Systems

Industry wide, the natural gas emissions as a rate of production (the “leakage rate”) is now 1.2 percent—a level still well below even the most stringent thresholds for immediate climate benefits achieved through coal to natural gas switching.

Field production accounts for two-thirds of system-wide emissions. Despite annual emissions from this stage having grown since 1990, methane released field production activities has been largely flat during the past decade even as gross withdrawals of natural gas climbed by more than 40 percent.

These trends reflect improved efficiency of how natural gas is produced, processed and transported to consumers. The amount of methane emissions per unit of natural gas produced has declined continuously since 1990, having dropped 46 percent during that time.Methane Emissions per Mcf of Gas Produced

Flat emissions and growing production coincide with the rise of shale gas production. Consequently, new wells have been drilled with improved equipment that emits less, better practices, and increased efficiency as operators compete to develop lower-cost supplies.

Distribution Systems Methane Emissions Have Dropped. A Lot.

The natural gas distribution stage, which is owned and operated by natural gas utilities, exist at the end of the entire gas system. This sector serves most customers, predominantly households and businesses, and was responsible for 58 percent of all natural gas delivered in 2015. It’s comprised of 2.2 million miles of pipeline, compressor stations, meter and regulating facilities, customer meters and other equipment.

These systems combined emit only 0.1 percent of annually produced natural gas. In other words, distribution systems have a small impact on methane emissions.

The long-term trend shows that methane released from distribution systems has declined significantly during the past two decades. Annual emissions from systems owned and operated by natural gas utilities have declined 75 percent since 1990, a stunning drop that is the direct consequence of infrastructure replacement programs, better operating practices and voluntary measures.

Methane Emissions from Natural Gas Distribution Systems

These emissions reductions took place even as the system itself has grown 35 percent. More than 19 million more customers enjoy natural gas service today than in 1990—bringing the total to 73  million customers across residential, commercial, and industrial sectors. To serve these homes and businesses, natural gas utilities have expanded infrastructure. Companies have placed more than 600,000 miles of new pipeline into operation during the past 25 years.

Even as the system has expanded, the existing infrastructure has been modernized. Older pipeline materials such as cast iron bare steel have been upgraded to protected steel and state-of-the-art polyethylene (plastic).

This exceptional record is the result of safety and modernization programs implemented by natural gas utilities that continue to be vigilant and committed to upgrading infrastructure through risk-based integrity management programs. As of May 2017, there are 40 states and the District of Columbia that have a program in place to accelerate the replacement of natural gas infrastructure

The industry also engages in voluntary practices. Natural gas utilities reduce methane emissions each year through voluntary measures reported to the EPA Natural Gas Star Program. In March 2016, 41 natural gas companies pledged support as founding partners for EPA’s Methane Challenge Program to achieve emissions reductions through a voluntary best management practice commitment framework. I anticipate that control technologies for methane emissions will continue to improve and proliferate over time.

Conclusion

Natural gas distribution systems have low methane emissions and have been on a declining trend for decades. Similarly, the natural gas industry has decreased annual methane emissions and has a shrinking emissions footprint. As new wells are drilled and pipelines are replaced the industry has a natural tendency toward adopting new technology and better practices, all of which contributes to lower emissions.

Finally, the EPA Inventory is a work in progress. New information offers the industry, the public, and policymakers a chance to understand better industry performance and identify cost-effective and pragmatic opportunities to reduce emissions. The Inventory is one component of a broader suite of tools that includes better science, new technologies, and industry engagement that helps lay the foundation for natural gas as a critical component of the energy mix for years to come.

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Richard Meyer Natural Gas Market Indicators: May 26, 2017

Edition No. 300

Year-to-date natural gas demand for the power, industrial, and small volume residential and commercial sectors is down by more than 4 Bcf per day compared with 2016. A warm first quarter in most parts of the country reduced home heating loads and the winter-related peaks to gas-fired power generation.

These domestic demand declines have been largely offset by exports though. The consumption deficit compared to last year would be even larger if liquefied natural gas (LNG) exports and pipeline gas to Mexico were not running more than 2 Bcf per day ahead of the 2016 pace.

As noted at the top of this blog article, this is the 300th edition of the Natural Gas Market Indicators. This marks more than 12 years of information and observations regarding natural gas markets by the AGA Energy Analysis team, as well as your interest. Thank you for your readership and including this publication as a resource as you develop your understanding of energy markets in the United States.

Visit this link to download the full Natural Gas Market Indicators report. Topics covered in this week’s report include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Shale Gas, Rig Counts, Pipeline Imports and Exports, and LNG Markets.

Please direct questions and comments to Chris McGill at cmcgill@aga.org or Richard Meyer at rmeyer@aga.org.

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Jackie Bavaro Infrastructure Week 2017: #TimetoBuild

Today marks the beginning of the fifth anniversary of Infrastructure Week, a national week of education and advocacy focused around the #TimetoBuild theme. From May 15-19, advocates from across infrastructure sectors will gather in Washington D.C., and throughout the nation to highlight the importance of policies and investments essential for keeping our infrastructure functioning safely and reliably into the future—things like natural gas pipelines, airports, bridges, roads, rails, and the power grid. There are more than 70 events being held this week that will help highlight the “Time to Build” theme.

infra

There is nothing more important to America’s natural gas utilities than the safety of the customers we serve and the communities in which we operate. Throughout the country we are seeing public utility commissions recognize that low natural gas bills present an opportunity to continue to enhance the safety of the delivery network by upgrading pipes that may no longer be fit for service and replacing them with ones made from more modern materials. While all natural gas utilities upgrade and modernize their infrastructure using risk-based integrity management programs, 41 states and the District of Columbia now have specific rate mechanisms that foster accelerated replacement of pipelines.

Follow the AGA Twitter and Facebook pages for updates on events and to follow our progress on Capitol Hill and communities nationwide. Use the hashtag #TimetoBuild to join the conversation. You can learn more about how to participate in Infrastructure Week 2017 here.

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Jackie Bavaro Natural Gas Utilities Raise the Bar on Safety

The May issue of American Gas Magazine titled, “Worker Safety: Yours, Mine and Ours,” focuses on the safety programs at three AGA member companies: Xcel Energy, Pacific Gas & Electric (PG&E) and Vectren, and how they are drawing on new research, insights and processes to strengthen safety at every level within their organizations.

Over the past nine years, Xcel Energy has made impressive strides when it comes to bolstering safety values within the company. Employee safety efforts have reduced Occupational Safety and Health Administration incidents by half—preventing injuries to approximately 700 employees. During this time, Xcel has changed the way it communicates with employees, emphasizing openness and providing as much information as possible in the aftermath of an incident. Xcel leadership points to honesty and transparency as fundamental elements for their safety success.

AmGASPG&E has adopted highly sophisticated, metric-driven tools and is setting a new standard when it comes to safety. The utility relies on its extensive legacy of data and procedures, which centers around four main principles: Creating a safety culture where employees follow all standards and regulations; understanding hazards to identify potential risks; managing risk by establishing procedures, training, emergency management and other aspects of operational readiness; and learning from experience by determining and correcting systemic and organizational failures.

Along with safety culture and asset management, process safety is one of the three pillars that comprise PG&E’s safety management system, titled, Gas Safety Excellence. The process safety pillar focuses on preventing and mitigating unintentional natural gas releases. PG&E’s systems also draw on international standards and research. In 2014, PG&E became the first utility to receive a double certification for asset management, and in 2015, it became the first company in the world to receive a certificate of compliance with the requirements of the American Petroleum Institute’s new standard, RP 1173.

In 2014, Vectren, conducted an employee survey to help the company understand its challenges when it came to enhancing safety culture. One outcome of this survey included restructuring its safety culture governance model. The model engages employees from the front line to the board of directors to improve in the development of its safety culture. A company-wide advisory team includes executives, directors and union officers, fostering engagement at the highest leadership levels. The tiered structure also includes guidance teams that address safety concerns across all operations, as well as local teams that address safety concerns at the operating center level. Some of the most important work takes place in the natural gas operating centers and local safety meetings. That’s where a holistic approach meets individual ownership.

Developing a safety culture means that all individuals within a company from directors to field workers—consider safety to be essential to their jobs. Employees take responsibility for monitoring their work activities and seeking better and safer ways to operate. Ongoing engagement and commitment to continuous improvement reinforces the message that safety never takes a back seat to other business metrics.  To read the entire article, click here.

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