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Researchers Say EPA Overestimated Cost, Effectiveness of Methane Rules

Researchers from Stanford University said the U.S. Environmental Protection Agency (EPA) overestimated how much it would cost the oil and gas industry to monitor and repair methane leaks at its facilities, and how many leaks would be found, when it updated embattled rules governing emissions last year.

Arvind Ravikumar and Adam Brandt, co-authors of a study published Wednesday in IOP Publishing's Environmental Research Letters, contend that the use of optical gas imaging (OGI) technology in leak detection and repair (LDAR) surveys "varies significantly with environmental conditions, operator practices and characteristics of the facility." They said additional study of OGI technology, which includes infrared cameras, is needed to understand its effectiveness in reducing emissions.

EPA issued three rules, collectively updates to the New Source Performance Standards (NSPS), in May 2016, during the Obama administration. The rules were designed to reduce methane, volatile organic compounds (VOC) and toxic air pollutants. Earlier this week, EPA Administrator Scott Pruitt said the agency will reconsider the rules and invited petitioners, including representatives of the oil and gas industry, to submit comments.

When EPA unveiled the rules last May, it revised its estimate for climate benefits to $690 million (in 2012 dollars) in 2025, with the benefits outweighing an estimated $530 million in costs to industry. The agency estimated net climate benefits would total $170 million in 2025. But Ravikumar and Brandt disagreed, saying their model shows the costs would be 27% less, or roughly $386.9 million.

"The difference arises because EPA has higher repair and resurvey costs compared to our model," the researchers said. "This occurs because the EPA likely overestimates the number of leaks found through an OGI-based LDAR survey...

"It should be noted that both models assume repair and resurvey costs are based on the number of leaks detected rather than the leak size -- a reasonable assumption given that studies have shown no correlation between repair costs and leak size."

EPA's updated rules called for requiring leak monitoring on a fixed schedule: twice a year at well sites, and on a quarterly basis at compressor stations. The agency also planned to allow operators to deploy a portable VOC monitoring instrument -- such as an organic vapor analyzer, or methane "sniffer" -- as an alternative for finding and repairing leaks with a repair threshold of 500 parts per million (ppm), a process the EPA calls "Method 21."

Ravikumar and Brandt said EPA, in its attempt to estimate repair and resurvey costs, assumed that operators using OGI technology would find 1.18% of its components are leaking methane. But that estimate was based on prior measurements of valves at oil refineries using a Method 21 device at a 10,000 ppm screening level.

"This Method 21 leak definition cannot be directly applied to natural gas well sites on an OGI monitoring schedule because of significant differences in detection thresholds," the researchers said, citing other surveys. "Available evidence suggests that the number of components found to be leaking will be an order of magnitude lower using OGI (0.1-0.3%) rather than Method 21 (1-2%). This difference translates to significantly lower repair and resurvey costs, and hence, lower LDAR implementation costs."

The researchers added that environmental factors, especially air temperature and wind velocity, can also impact OGI.

"It would seem logical to specifically target and repair as quickly as possible the small number of ['super-emitting' leaks], resulting in large marginal abatement benefits," the researchers said. "In this regard, OGI technology is ideally suited due to its ease in finding large leaks.

"However...the performance of this technology is sensitive to environmental conditions and 'detection' relies on the subjective judgment of the operator. Moreover, a semi-annual LDAR schedule could mean that large leaks go unnoticed for up to six months. When looking for super-emitters, continuous monitoring technologies can trade-off sensitivity for lower cost, paving the way for real-time leak detection and mitigation."

On March 28, President Trump issued an executive order that included a directive for EPA to immediately review regulations on energy sources, and then to either suspend, revise or rescind them. The administration also asked an appellate court to delay a series of lawsuits over the rules.

The rules were designed to help meet a goal by the Obama administration to slash by 2025 methane emissions from the oil and gas sector by 40-45% from 2012 levels. EPA previously said it expected NSPS to reduce 510,000 short tons of methane in 2025, which is the equivalent of reducing 11 million metric tons of carbon dioxide. The rules were also expected to reduce other pollutants, including 210,000 tons of VOCs and 3,900 tons of air toxics, by 2025.

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