The head of the Pennsylvania Department of Environmental Protection (DEP) said the agency could possibly hire more inspectors to help implement its proposed four-part plan for reducing methane emissions at oil and gas facilities, but for now the burden for leak detection will be handled by the industry.
In a webinar Wednesday, DEP Secretary John Quigley added that he had been in discussions "with some of the industry's leading companies" about a performance-based alternative to complying with the state's proposed methane rules. He also criticized the Marcellus Shale Coalition (MSC) for saying the industry had made progress on reducing methane, despite supportive data from a DEP report.
On Tuesday, Gov. Tom Wolf announced a four-part plan to address methane emissions from the oil and gas industry (see Shale Daily, Jan. 19). The first two parts of the plan call for the DEP to develop a new general permit for new unconventional natural gas well pads, and to revise its current general permit for new compressor stations and processing facilities.
Meanwhile, the third part of the plan calls for the DEP to develop a rule covering methane leaks from existing oil and gas facilities, and for that rule to be taken under consideration by the state Environmental Quality Board. The fourth part of the plan calls for the DEP to establish best management practices, including leak detection and repair programs, in order to reduce methane emissions along production, gathering, transmission and distribution lines.
The proposed rules would apply to unconventional wells, not conventional ones, Quigley said.
"We must have effective and cost-effective controls on methane and VOC [volatile organic compound] emissions," Quigley said. "This is an immense industry. The cost of these new controls will initially be minimal, given the size of the industry. Many of these measures will pay for themselves almost immediately, but all of them will pay for themselves, perhaps many times over, over time."
Last August, the U.S. Environmental Protection Agency (EPA) proposed rules designed to cut methane emissions by as much as 400,000 short tons by 2025 (see Shale Daily, Aug. 18, 2015). But last week the EPA announced it was extending a public comment period associated with the proposed rules until March 11.
When asked why the DEP was taking action before the EPA rules are finalized, Quigley said the DEP thought the rules "could be improved upon," adding that Pennsylvania has "an obligation" to go beyond what the EPA has proposed "if we think it makes sense."
"It's very clear that the nation's number two natural gas producing state must take focused action to minimize methane emissions," Quigley said. He later added that "our experience has shown that without requirements, the industry won't take comprehensive action to address the methane problem."
Quigley said that while it was still very early in the process, it was possible that the DEP -- an agency that state officials from several administrations have said is understaffed -- could hire additional inspectors (see Shale Daily, March 13, 2015). But in the meantime, the proposed methane rules are going to require that operators perform "more work, more frequent inspections and more frequent leak detection protocols. We're putting the burden of detecting these leaks on the industry [while we] evaluate what additional staffing might be needed."
In a nod to Southwestern Energy Co., Quigley said the company's leak detection and repair (LDAR) program shows it is "leading internationally and putting their money where their mouths are. They have deployed the kinds of technologies and practices and equipment that we will require of the industry in this new initiative." He also lauded Chevron Corp., Royal Dutch Shell plc and Consol Energy Inc., all certified members of the Center for Sustainable Shale Development (CSSD), for "taking strong action to reduce methane emissions."
"Frankly, if leading companies can sharply reduce methane and VOC emissions, so can the rest of them," Quigley said. "This is about raising the bar, ensuring responsible development of Pennsylvania's rich natural gas reserves."
Quigley added that he has been in talks with members of the Our Nation's Energy (ONE) Future Coalition, which is trying to develop a performance-based approach to managing methane emissions. The coalition, based in Washington, DC, wants to achieve an average rate of methane emissions across the entire natural gas value chain of 1% or less.
"DEP is exploring the potential of a performance-based approach that, when fully developed, could serve as a parallel alternative pathway to achieving methane emission reduction," Quigley said. "The industry is not there yet, but our door is open to a conversation about performance-based approaches with a regulatory backstop."
According to the DEP, there are currently 545 compressor stations at Marcellus Shale facilities, along with 3,264 well pads -- most with multiple wells -- and 12,000 miles of pipeline. Quigley said the agency expects the industry will add hundreds more compressor stations and thousands of miles of new pipeline in the state.
Although the DEP estimated more than 5 MMcf, almost 115,000 tons, of methane emissions were released from unconventional wells and midstream operations in 2014, Quigley said "that number is undoubtedly low.
"Fugitive emissions are very difficult to quantify. Many studies have been done on this issue nationally and the results, frankly, are all over the board. We don't know what the actual emissions in Pennsylvania are, but we know they are far higher than the emissions reported to our inventory."
Quigley said that if the estimate of 115,000 tons of methane were lost every year, it would equate to a loss of more than $8 million, even at today's low commodity prices. He added that while some of the aforementioned national studies estimate a methane leakage rate of at least 2%, an "absurdly low" leakage rate of 1% would equate to a loss of more than 900,000 tons of methane, worth $60 million. On an environmental scale, a 1% methane leak rate would equate to the climate impacts from five coal-fired power plants.
During the Q&A, Quigley took issue with the MSC's claim that the industry had reduced methane emissions. "Frankly, we don't know where that claim comes from," he said. "It's very easy for a trade group to claim that they are doing the right thing, [especially] with a lack of monitoring. I'd like to say 'prove that' to them.
Quigley's remarks appear in contravention to a DEP report from April 2015, which found that despite an increase in natural gas drilling and several types of air emissions between 2012 and 2013, methane emissions decreased 13% and carbon monoxide emissions fell 10% (see Shale Daily, April 20, 2015).
Last December, the Wolf administration acknowledged that it was working to get the state into compliance with the federal government's proposed Clean Power Plan and its proposal to cut methane emissions for new and modified oil and gas industry sources (see Shale Daily, Dec. 4, 2015; Aug. 18, 2015).