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US gas revolution at risk: API

THE US and Canada have announced draconian new targets to cut methane emissions from their respective gas industries by almost half, but the American Petroleum Institute says the plan won’t work and will put the US gas revolution at risk.

Haydn Black

New rules for onshore and offshore emissions come after US president Barack Obama and Canada’s prime minister Justin Trudeau forged a pact to fight climate change earlier this month, pledging to slash oil and gas related methane emissions by between 40-45% from 2012 levels by 2025.

Astonishingly, Trudeau’s trip to Washington was the first state visit by a Canadian leader in 19 years.

Offshore

On Thursday, the Bureau of Ocean Energy Management announced new regulations to cover air quality regulation for offshore oil and gas operators in the Gulf of Mexico and, thanks to a change made by Congress in its 2012 budget, in the offshore Arctic

The aim is to bring BOEM standards into line with the Obama administration’s new Clean Air Act rules, which are regulated by the Environmental Protection Agency.

The proposed regulations update air quality rules that had been in place since 1980, but had been applicable for most of those years only to operators in the Gulf of Mexico, and not the Arctic.

With BOEM in charge of air emissions regulation, requirements for controlling air pollution from offshore Arctic oil and gas operations are embedded in plan approvals rather than spelled out in separate EPA permits.

The changes proposed by BOEM would tighten air quality management, the agency said, and not apply only when drill ships were stationary in areas such as the Chukchi and Beaufort seas.

The proposed regulations also clarify that they apply to all sources associated with any given oil or gas project, meaning support vessels within some 50km of a drilling operation are covered.

The proposed regulations are subject to a 60-day public comment period.

Onshore

Onshore, the EPA is set to enact new powers to regulate emissions from the hundreds of thousands of oil and gas wells cross the nation, something that will affect Australian juniors working in the US.

Last August the US Environmental Protection Agency announced what it called “common sense” measures to cut methane emissions, forcing operators to find and repair leaks, capture natural gas from completed fracking operations and limit emissions from related infrastructure.

In January the US Interior Department then announced plans to overhaul 30-year-old regulations and require operators to use existing technologies to limit flaring at wells, to regularly check for natural gas leaks and to replace outdated equipment that allows large volumes of gas and methane to escape into the air for all wells drilled on federal and tribal lands, about 25% of all shale wells.

With the latest announcement from Obama, the EPA says it will prepare new regulations for existing wells, which account for 90% of the industry’s methane emissions.

A draft should be prepared in April, but the rules will also depend on the face for the White House.

If the Democrats retain power the rules will likely be enacted, however the Republicans want to dismantle the EPA.

Opposition

The API, for its part, says industry is already doing enough cutting emissions voluntarily and does not need further regulation.

It says US methane emissions fell by nearly 15% between 1990 and 2013, although the EPA says they will rise 25% this decade unless checked.

About 30% of US methane emissions come from the oil and gas industry, with around eight million tonnes estimated coming from faulty equipment and leaky systems, the EPA says.

AIP vice president of regulatory and economic policy Kyle Isakower warned that if oil and gas companies had to control fugitive emissions from their wells it could discourage the shale energy revolution.

“The administration is catering to environmental extremists at the expense of American consumers,” Isakower complained.

“America is already leading the world in reducing greenhouse gas emissions. Even as oil and natural gas production has risen dramatically, methane emissions have fallen, thanks to industry leadership and investment in new technologies. These industry-led efforts are a proven way to reduce methane emissions from existing sources, and they are clearly working.”

The push comes as a new study from the Environmental Integrity Project focuses on emissions from industrial developments spurred by development of unconventional oil and gas.

The report, Greenhouse Gases from a Growing Petrochemical Industry, warns that the cheapness of shale gas is encouraging other energy-intensive industries to expand.

Seven new fertiliser industry projects are scheduled to emit another 14.2MMt of carbon dioxide equivalent, and seven new chemical plants would add another 16MT.

If all 23 proposed US LNG plants go ahead they would emit 43MMTpa of CO2-e per annum, a 34% jump over releases from the entire industry in 2014.

Further, improperly completed wells can add to atmospheric emissions, and can make shale gas even more polluting than coal.

Simultaneously, new supplies of shale oil from fraccing are also causing an increase in refining petroleum.

Seven new refineries were proposed or permitted in the US last year, which would release another 4.9MMMtpa, when running.

The study strikes another blow at the strategy of both the US and British governments to rely on shale gas as a bridge between fossil fuels to renewables, the report’s authors warned.

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