Barriers to Implementation ofMethane Emissions ReductionProjects in Gas Transmission

and Distribution

Jerome BlackmanUS EPA, Natural Gas STAR

Program Manager

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Contact InformationJerome Blackman202-343-9630blackman.jerome@epa.gov

Carey Bylin202-343-9669bylin.carey@epa.gov

Roger Fernandez202-343-9386fernandez.roger@epa.gov

Suzie Waltzer202-343-9544waltzer.suzanne@epa.gov

www.epa.gov/gasstar

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AgendaWhy Focus on Methane?U.S. Greenhouse Gas Emissions

Transmission and Distribution Sector Methane EmissionsMethane Emissions Reduction Technologies and Practices

Leak Detection and MeasurementTransmission SectorDistribution Sector

Barriers to ImplementationTransmissionDistribution

Conclusions

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Why Focus on Methane?A potent greenhouse gas (GHG) with atmospheric lifetime of~12 years

100-year Global Warming Potential (GWP) of 251

20-year GWP of 721

A primary component of natural gas and a valuable, clean-burning energy source

Proven, viable technologies and practices exist to reduce methaneemissions cost-effectively

Methane emissions from oil and natural gas operations are asignificant source of total U.S. GHG emissions (over 5%) on a20-year GWP basisReducing methane emissions increases the amount of usablefuel in the U.S.

1 – IPCC. Fourth Assessment Report, Chapter 2 - Changes in Atmospheric Constituents and in RadiativeForcing. 2007.

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U.S. Natural Gas Industry GHG Emissions:20 year Global Warming Potential Basis

Methane emissions comprise 71% of total U.S.Natural Gas industry GHG emissions

N2O Emissions are negligibleEPA. Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990 – 2007. April, 2009.Updated with 20-year GWP from IPCC. Changes in Atmospheric Constituents and in Radiative Forcing. 2007.

CH471%

CO229%

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2007 Transmission Sector Methane EmissionsMajority of emissions from fugitives and venting at compressorstations

EPA. Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990 – 2007. April, 2009. Available on the web at:epa.gov/climatechange/emissions/usinventoryreport.html

PneumaticDevices11 Bcf

CentrifugalCompressors

8 Bcf

Pipeline Leaks8 Bcf

Gas EngineExhaust12 Bcf

ReciprocatingCompressors

41 BcfStation Venting8 Bcf

OtherSources

4 Bcf

StationFugitives

8 Bcf

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2007 Distribution Sector Methane EmissionsMajority of emissions from underground pipe leaks andfugitives from metering and regulator stations

EPA. Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990 – 2007. April, 2009. Available on the web at:epa.gov/climatechange/emissions/usinventoryreport.html

Unprotected SteelMains/Services

17 Bcf

Cast IronMains9 Bcf

CustomerMeter Leaks

6 Bcf

RegulatorStations11 Bcf

M&R Stations18 Bcf

PlasticMains/Services

6 Bcf

Other Sources2 Bcf

Protected SteelMains/Services

4 Bcf

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Technologies Exist Today to:Detect methane emissionsMeasure methane emissionReduce methane emissions

Primary barrier to reducing methane emissions in gastransmission and distribution is policy, nottechnology.

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Leak Detection Technologies

Screening - find the leaksSoap bubble screeningElectronic screening (“sniffer”)Toxic vapor analyzer (TVA)Organic vapor analyzer (OVA)Ultrasound leak detectionAcoustic leak detectionInfrared leak detection

Acoustic Leak Detection

Leak Imaging Camera

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Measurement Technologies

Evaluate the leaks detected - measure resultsHigh volume samplerToxic vapor analyzer(correlation factors)Rotameters/AnemometersCalibrated bagging

Leak Measurement Using High Volume Sampler

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Transmission SectorMethane Emissions Reduction Technologies

Natural Gas STAR Partners have reported utilizing a numberof technologies and practices to reduce methane emissions

Economic rod packing replacement in reciprocating compressorsAir/fuel ratio controls on compressorsReplace high-bleed pneumatics with low-bleed pneumatic devicesReplace wet seals with dry seals in centrifugal compressorsInfrared leak detection devices

Hand-heldAerial

Hot tapsComposite wrap

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Distribution SectorMethane Emissions Reduction Technologies

Natural Gas STAR Partners have reported utilizing anumber of emission reduction technologies including

Identification and replacement of leaky distribution pipeInfrared leak detection devicesFlexible plastic inserts for cast iron mainsSeam-sealing robot for cast iron mainsAutomated control systems for reducing distributionsystem pressure

smart regulatorsclocking solenoids

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Partner Experience - Northern Natural GasDetection - Screened 659 rodpackings with IR camera to identifyleaksMeasurement - High volumesampler, Rotameter, and Muellerutilized to measure leaksLeak rates ranged as high as3,155 Mcf/yrReduction Technology/Practice -Regular monitoring and economicreplacement keeps rod packingemissions lowAnnual savings of 71MMcf in 2006by replacing compressor rodpacking Source: Northern Natural Gas

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DI&M - Aerial Leak SurveysAerial leak surveys withinfrared leak detectiondevices can aid in leakidentification over largesections of pipelinesAerial surveys can beconducted in helicoptersor fixed wing aircraftsusing both active andpassive IR detectiondevices

Source: LaSen Inc.

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Partner Experience - Northern Natural Gas1,183 miles of pipeline surveyedusing ITT ANGEL Service(Airborne Natural Gas EmissionLidar) withData collection time: 13.4 hoursDifferential Absorption LIDAR(DIAL) laser technologyprovides accurate leak detectionColor digital geospatial video ofrights-of-way and surroundingareasDatasets show completepipeline leak survey coverageLeaks found and verified in 27locations

Source: Northern Natural Gas

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Partner Experience - Northern Natural Gas

Source: Northern Natural Gas

Underground leak detected by DIAL, Kansas

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Technology / Practice HighlightsPlastic Inserts for Cast Iron Mains

Cured in Place LinersStarline

Surface preparation / Pipe cleaningAdhesive MixingLiner wet–out / Adhesive applicationLiner Inversion

Tight Fit PolyethyleneRolldown

Size for Size InsertionReduction of Capacity

SublineSize for SizeMinimal Reduction of Capacity

Source: ConEd

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Technology / Practice Highlights - cont.Cast Iron Seam-Sealing Robot (CISBOT)

ConEd has reported using CISBOT to seal joints in live castiron mains between 6 – 12 inches in diameterCISBOT can seal joints in up to 300 feet of pipeline through asingle excavation (150 feet in each direction from launchingpit)Equipped with:

Video cameraPointer lightsSupport armsDrill headSealant injector

Uses anaerobic sealant forlong term repairs

Source: ULC Robotics

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Limited Penetration of Methane EmissionsReductions in Transmission/Distribution

Technologies and practices toreduce methane emissions arematureHowever, penetration of reductionoptions has been low

19% reduction from transmission2% reduction from distributionIn comparison production hasreported methane emissionsreduction of 41%

The issue seems to bemore policy related thentechnology related

EPA. Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990 – 2007. April, 2009. Available on the web at:epa.gov/climatechange/emissions/usinventoryreport.htmlNote: Natural Gas STAR reductions from gathering and boosting operations are reflected in the production sector.

EmissionsReductions

Transmission & Storage100 Bcf

Production123 Bcf

Processing33 Bcf

Distribution73 Bcf

89 Bcf

1 Bcf

23 Bcf

5 Bcf

Oil Downstream2 Bcf

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Policy Barriers to Implementing EmissionsReduction Projects

EPA is working to understand what barriers exist such that itcan effectively promote the implementation of thetechnologies and practices available to reduce methaneemissions

Feedback is welcome from industry, trade associations, keygovernment agencies, and other stakeholders to further understandand address these barriers

EPA does not endorse a specific solution to remove barriersto implementing emissions reduction projects

However, EPA wants to highlight the fact that without overcomingthese policy barriers significant penetration of reduction options will behindered

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Policy Barriers: Transmission Sector

Costs and risks associated with a rate caseThe cost of pipeline investments in emission reductionscan only be recovered via a rate case

Or from the creation of a “rate tracker,” which also requires aregulatory proceeding

The pipeline’s achieved earnings can be reduced as aresult of a rate case.

This can occur if there has been an extended period of time sincethe last case resulting in accumulated depreciation of the pipelinerate base that would result in new rates that are lower than theexisting rates.Rate case opens the door to other issues.

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Policy Barriers: Transmission Sector

No revenue from emissions reductions recovered bythe pipeline

Benefits from emissions reductions/gas savings arepassed on to the shipper (pipeline customer)

A fully contracted pipeline realizes full revenueirrespective of loading of pipeline

Transmission company gas transportation rates are basedon capacity (reservation or demand charge) of pipelinesrather than actual loads of gas moved (volumetric charge)Hence, there is little or no incentive invest capital to saveoff-peak leakage

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Policy Barriers: Distribution Sector

Customers must pay for reduction projectsCosts/benefits from emissions reductions/gas savings arepassed on to the consumerConsumers are short-sited: generally unwilling to accepthigher rates for infrastructure improvements that lead tomore efficient operation and lower rates in later years

Capital recovery through volumetric ratesRecovery of capital investment is often linked to volumetricrates despite efforts to “decouple” rates that have beenproposed in many states

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Policy Barriers: Distribution SectorFinancing projects

Capital investments for emission reduction projects are largelyfinanced through borrowed moneyWithout clear cost recovery, this could result in downward evaluationof the company’s credit rating, which in and of itself can increase theoverall cost of capital

Investment prioritiesEconomic choice on investment in existing infrastructure improvementversus investment in expansion to new customersInvesting in improvement to existing infrastructure increases rates,economically deters consumption, potentially result in lost revenueInvestment in new customers moves more gas, lowers rates, andearns more revenue

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ConclusionsMethane emissions are the major source of GHG emissions inthe natural gas and oil industries

Emissions reduction efforts should focus on methane emissions as itwill have the largest impact on overall emissions and is a valuableresource

Proven technologies and practices for identifying, measuringand reducing methane emissions are currently available foruse in the transmission and distribution sectorsPolicy barriers exist which inhibit the implementation of thesetechnologies and practices

Understanding of these barriers must be improved so that solutionsmay be developed