Evolving EPA Subpart W Greenhouse Gas Reporting Rules Challenge Oil and Gas Operators

Abstract

Recent greenhouse gas (GHG) regulatory actions targeting oil and gas operations have led to complicated data collection and confusing emission calculation requirements. This presents a compliance challenge for operators, particularly in light of increased public and regulatory scrutiny of the industry. However, operators of petroleum and natural gas systems can avoid reporting pitfalls by implementing a management system to ensure compliance.

For the petroleum and natural gas industry, the key factor that makes Subpart W applicability so unique and expansive is its definition of “facility.” The regulation does not apply a traditional definition of a facility, as in the physical boundaries of contiguous or adjacent property, but instead applies to the defined segment. For example, under the Natural Gas Distribution segment, “facility” is a local distribution company as regulated by a state public utility commission, whereas the Onshore Production segment defines a facility as all emission sources on well pads, or associated with well pads, that are under common ownership or control and is located in a single hydrocarbon basin as defined by the AAPG. What is traditionally termed the Appalachian Basin is actually defined as two AAPG basins (160 and 160A).

Given that companies potentially have hundreds or thousands of wells, gathering lines and associated equipment, thousands of data sets need to be collected to report GHG emissions. The sheer volume of information collected not only represents emissions data, but also the potential for non-compliance. Successful entities look at this process as an opportunity to not only track GHG emissions but to also establish a management system to ensure compliance with the myriad of operating requirements. A well-thought-out program that embraces the operator's organizational structure, operations, and field personnel, coupled with a robust tracking system, will lead to compliant operations. Keep in mind, a system itself will not be successful without management buy-in. Experience demonstrates that is imperative for management to promote and emphasize inter-departmental collaboration to ensure that information is provided to compliance staff in a timely and complete fashion.

AAPG Datapages/Search and Discovery Article #90258 © 2016 AAPG Eastern Section Meeting, Lexington, Kentucky, September 25-27, 2016