Category Archives: environment

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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Chris McGill Natural Gas Market Indicators: August 28, 2015

The Environmental Protection Agency (EPA) released its new methane reduction rules aimed at limiting emissions from oil and natural gas operations from the wellhead to the distribution city gate. The rule includes elements targeting hydraulically fractured oil wells—something the New Source Performance Standards did not cover in 2012. The new standards would be expected to cost the industry about $370 million to implement annually by 2025, but bring in $460 to $550 million in benefits. It is not expected (at least by EPA) to be a limiting factor for future domestic production.

U.S. production averaged 72 Bcf per day in August. An extended maintenance season this summer has moderated some production growth in all areas of the country. Still, current average daily production year to date has been 4.0 Bcf higher than the same period in 2014.

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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Richard Meyer Natural Gas Market Indicators: June 15, 2015

The release of the nearly 1,000 page EPA study on hydraulic fracturing and drinking water begs the question, “what will be next?” Perhaps the environmental focal point will shift to continued analysis of methane emissions within the value chain.  Only time will tell.

Natural gas acquisition prices are currently quite modest and the domestic storage position is back to more normal. In fact, from the end of May through the balance of the traditional net injection season daily injections would only have to average about 11.5 Bcf per day to bring national inventories to 4 Tcf entering the winter for the first time in history. Production fundamentals and requirements for natural gas to serve cooling loads will make that determination as the summer progresses.

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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Dave McCurdy National Journal Blog Post: Is Aging Energy Infrastructure a Problem?

This week, AGA President and CEO Dave McCurdy participated in the National Journal’s Energy Insiders blog to respond to their question, “How Best Can We Use Natural Gas? Should We At All?” His response is posted below and you can also visit the National Journal Energy Insiders blog to view the entire comments thread.

“Our nation is fortunate to lead the world not only in domestic energy resources but also in energy delivery infrastructure. America’s abundance of natural gas, which continues to grow according to the latest Potential Gas Committee report released this month, holds the key to meeting America’s energy needs and growing our economy while improving our environment. As the final link between this game-changing resource and homes and businesses, America’s local natural gas utilities are committed to ensuring that it can be delivered to customers safely, reliably and at affordable prices. While I am pleased to see the Administration’s continued support for natural gas in our clean energy future and their recognition of the critical importance of robust and reliable energy infrastructure, it is imperative to recognize the significant work already underway and the contributions current industry efforts are making.

Every natural gas utility works every day to monitor, maintain and identify ways to expand and invest in smart modernization and enhancements to the more than 2.1 million miles of natural gas pipeline and infrastructure they operate. Since 1990, natural gas utilities added more than 600,000 miles of pipeline to serve over 17 million new customers. This has included installing updated plastic lines at a rate of 30,000 miles per year in the past decade. These efforts have led to an approximately 40 percent decline in pipeline incidents over the past ten years. A recently published study led by a team from Washington State University found that emissions from local natural gas distribution systems in cities and towns throughout the U.S. have decreased in the past 20 years, to levels 36 to 70 percent lower than the 2011 U.S. Environmental Protection Agency inventory. The study concludes that as little as 0.1 percent of the natural gas delivered nationwide is emitted from local distribution systems.

38 states now have specific programs in place to foster accelerated replacement of pipelines. We appreciate the recognition that most of the authorities for energy infrastructure reside at the state and local level, and we will continue our efforts on these local fronts, while continuing to work with President Obama, the U.S. Department of Energy and other key stakeholders in addressing the energy challenges that face our nation through the use of clean, reliable natural gas.”

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