Greenhouse Gas Reporting for E&P

December 13, 2011 Deanne D. Hughes, PE Principal GHG: What’s The Big Fuss?

GHG Reporting for the Independent Producer
Overview/Recap
Oil and Gas Related GHG MRR Subparts
Subpart W (Petroleum and Natural Gas Systems)
Source Categories in Subpart W
BAMM Timeline Reminders
Questions and Discussion

Mandatory Reporting Rule
Purpose – To create a nationally-comparable database for use by Congress, EPA, states and the public in designing GHG Policy
Proposal – April 10, 2009
Finalization – September 22, 2009
Effective Date – December 29, 2009
Data gathering began 1/1/2010, first report due 9/30/2011 for some categories
First reporting year for Onshore Petroleum and Natural Gas Production is 2011 with reports due September 2012.

Mandatory Reporting Rule
Data gathering beginning January 2010, first reports due September 2011:
Subpart C (Stationary Combustion)
Subpart Y (Petroleum Refineries)
Subpart MM (Suppliers of Petroleum Products)
Subpart NN (Natural Gas and Natural Gas Liquids)
Subpart PP (Suppliers of Carbon Dioxide)
Data gathering beginning January 2011, first reports due September 2012:
Subpart W (Petroleum & Natural Gas Systems)
Subpart RR (Geologic Sequestration)
Subpart UU (Carbon Dioxide Injection)

Subpart W – Petroleum & Natural Gas Systems
Includes Reporting of:
CO 2 , CH 4 released through venting and equipment leaks
CO 2 , CH 4 , N 2 O emissions due to flaring
CO 2 , CH 4 , N 2 O stationary combustion emissions for onshore production and LDCs
Threshold category
To determine applicability, all “threshold” categories are additive

Subpart W – Segments
Includes the following industry segments:
Petroleum & natural gas production – offshore & onshore
Onshore natural gas processing plants
Onshore natural gas transmission compression
Underground natural gas storage
LNG storage
LNG import and export equipment
Natural gas distribution (LDCs)

Subpart W – Onshore Production
Onshore production includes portable non-self propelled equipment, EOR operations using CO2 or natural gas
Facility definition is basin level
All equipment on well pad or associated with a well pad, under common ownership or control, including leased, rented or contracted activities by a production owner or operator located in a single hydrocarbon basin
Basin is American Association of Petroleum Geologist Provinces Code Map
Assets will be classified within each basin by sub-basins based on the type of hydrocarbon formation and county boundaries.
Oil, high permeability gas, shale gas, coal seam, or other tight reservoir rock.

Subpart W – Onshore Production
Natural Gas pneumatic device venting
Natural Gas driven pneumatic pump venting
AGR vent stack
Dehy vent stack
Well venting for liquids unloading
Well completion/workover venting
Storage tanks
Well testing venting/flaring
Associated gas venting/flaring
Flares
Compressor venting
Equipment leaks
EOR dissolved CO2
EOR injection pump blowdowns
Combustion Emissions

So What?
Significant data collection, assurance, and management issues.
Some of the activities for which reporting is required are grouped by “sub basin and well type combinations”
Devon provided very good summary at Fall Conference. Its GHG Applicability Tool suggests that reporting under Subpart W could be triggered with as few as 40-50 wells in a basin.
The EPA Applicability Tool significantly underestimates emissions from sources meaning that some operators may think his/her company is exempt from reporting when, in fact, the CO2e emissions exceed thresholds.

Onshore Production – Devon Applicability Tool Details
Natural Gas pneumatic device venting
Natural Gas driven pneumatic pump venting
AGR vent stack
Dehy vent stack
Well venting for liquids unloading
Well completion/workover venting
Storage tanks
Well testing venting/flaring
Associated gas venting/flaring
Flares
Compressor venting
Equipment leaks
EOR dissolved CO2
EOR injection pump blowdowns
Combustion Emissions

Subpart W – Natural Gas Processing
December 2, 2011 amendments to the rule revise the definition to include one or a combination of the following:
Separation of NGLs from produced natural gas
Separation of non methane gases from produced natural gas
Separation of NGLs into one or more component mixtures
Separation can be extraction of NGLs, S or CO2 removal, fractionation of NGLs, or capture of CO2
Applies only to plants with >25 MMscf annual average daily throughput .
Includes owned or operated residue compression

How can I get all this done?
This grouping approach is not consistent with how most operators structure their business, their people, or their data.
Inventories of equipment are ever-changing in response to field and well needs.
Will take numerous trained people to collect the required data
It is a continuous process of determining rule applicability that essentially requires the same level of effort as reporting.

What Do I Need to Do NOW?
Organize and Plan
What do you need? – Rule, Guidance, Internal and External Resources
What do you have? – Spreadsheets of information, purchase records, production records…
How are you going to manage the data? – software, database, spreadsheet….
Who is on the team and what is each person’s role?
How can I have more time?

Apply for BAMM
For 2011, Best Available Monitoring Methods can be used to obtain the information to perform the calculations for reporting.
Automatic
Note – this is not an opportunity to calculate the GHG emissions any way you want --- you have to use the calculation methodology as described in the rule.
BAMM gives you the flexibility for how you determine the inputs to the equations.

BAMM Process
If desired for 2012, need to apply on e-GGRT
Notice of Intent to apply for BAMM must be submitted by December 31, 2011.
The BAMM request is due by March 30, 2012.
BAMM is automatically approved through June 30, 2012 for facilities submitting NOI and BAMM Request.
EPA must approve facility to use BAMM past June 30, 2012.

BAMM e-NOI
Identification of all facilities for which BAMM is needed.
What source categories apply to the facilities
Application comes from the Designated Representative.

BAMM Extension Request
Detailed information on what source categories apply and the data required.
Explain each data parameter for which BAMM is requested and why.
“ Unusual or Unique Circumstances”
Timeline for complying with the reporting requirements.
This could be a very significant submittal – don’t wait to start it.
Anything NOT in the BAMM request? Begin collecting data in accordance with Subpart W on 1/1/12.

Questions?
Deanne Hughes, PE
[email_address]
918.895.9766 or 405.202.9605
Kristine Baranski, PE
[email_address]
405.842.1066
www.CardinalEngineers.com

Acknowledgements
EPA Greenhouse Gas Mandatory Reporting Rule - Darren Smith and Bill Bailey, Devon Energy, Presenters at Fall Conference, November 2011, Oklahoma City, OK.
http://www.oipa.com/custom/shownewsmulti.php?action=detail&id=334
Kristine Baranski, PE, Cardinal Engineering, Inc.

Helpful Links
www.oipa.com –
Applicability Tool for portions of Onshore Production source category
Presentations made at Fall Conference and Air Emissions Workshop
Links to BAMM information
http://www.epa.gov/climatechange/emissions/ghgrulemaking.html - EPA website for GHG reporting rule.

Questions?
Deanne Hughes, PE
[email_address]
918.895.9766 or 405.202.9605
Kristine Baranski, PE
[email_address]
405.842.1066
www.CardinalEngineers.com

Greenhouse Gas Reporting for E&P

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