The Environmental Protection Agency (EPA) this week finalized greenhouse gas (GHG) reporting requirements for the petroleum and natural gas industries as part of its mandatory reporting program.

On Jan. 1, 2011, petroleum and gas facilities that emit more than 25,000 tons of carbon dioxide (CO2) equivalent per year will be required to begin monitoring and reporting GHG emissions to the agency. The first annual reports will be due at the EPA on March 31, 2012. “Very few small businesses in this sector will be affected since most are not likely to meet the emissions threshold for reporting,” the EPA said.

Petroleum and natural gas facilities will be required to report annual methane (CH4) and CO2 emissions from equipment leaks and venting; emissions of CO2, CH4 and nitrous oxide from flaring; onshore production stationary and portable combustion emissions; and combustion emissions from stationary equipment involved in natural gas distribution.

The petroleum and natural gas industries are “one of the largest human-related sources of methane in the United States,” comparable to “annual emissions from more than 40 million passenger cars,” the EPA said.

The EPA estimates that the new rule will cover 85% of the total GHG emissions from the U.S. petroleum and natural gas industries, with approximately 2,800 facilities reporting. The rule would apply to a wide range of facilities involved in offshore and onshore petroleum and gas production, onshore gas production, processing, onshore gas transmission compression, underground gas storage, liquefied natural gas storage (LNG) storage and LNG import and export, as well as natural gas distribution.

The agency estimates that the cost of the new requirements for the private sector will be about $62 million for the first year and $19 million in subsequent years. This would translate into an average cost of about $16,000 per facility for the first year and $7,000 in following years, according to the EPA.

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