US EPA Proposes to Expand Greenhouse Gas Reporting—Petroleum and Natural Gas Systems among the Targeted Industries

Author:Mr Roger Patrick
Profession:Mayer Brown

Originally published March 29, 2010

Keywords: EPA, GHG, mandatory, petroleum, natural gas systems, targeted industries, emission sources, offshore, onshore

On March 23, 2010, the US Environmental Protection Agency (EPA or the Agency) announced that it is proposing to add emission sources to its mandatory greenhouse gas (GHG) reporting system. As finalized in October 2009, those reporting rules cover approximately 30 source categories, including a "catch-all" for fuel combustion in boilers, turbines, engines, and other stationary equipment.1 Through four separate proposals, the Agency now is looking to add three sectors—petroleum and natural gas systems, underground carbon dioxide (CO2) injection, and fluorinated gases—and to require all reporting facilities to provide information on their corporate ownership.

These developments will be of particular interest to entities that operate petroleum and natural gas wells, engage in enhanced oil recovery, or distribute natural gas as well as to operators of electricity transmission and distribution systems with gas-insulated equipment.

EPA started down the path to mandatory GHG reporting with an April 2009 proposal.2 There, EPA had included petroleum and natural gas along with fluorinated gases. In response to the comments on that proposal, the Agency decided to pull those sectors from the final rule and to re-propose their reporting requirements.

As before, the latest proposal would require petroleum and natural gas facilities that emit greater than or equal to 25,000 metric tons of CO2 equivalent in a year to report. Covered facilities would include offshore petroleum and natural gas production, onshore natural gas processing, natural gas transmission, underground natural gas storage, liquefied natural gas (LNG) storage, and LNG import and export, plus, in a departure from the April 2009 proposal, natural gas distribution and on-shore petroleum and natural gas production. At present, however, the Agency is not proposing to include crude oil transportation in its reporting system.

For onshore production, offshore production, and natural gas distribution, EPA is proposing customized definitions of the term "facility." Onshore, the term would include all petroleum or natural gas production equipment associated with wells under common ownership or control that are located in a single hydrocarbon basin as defined by the American Association of Petroleum Geologists. As an alternative, EPA is taking comments on...

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