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Subpart W Greenhouse Gas Reporting for Natural Gas
Distribution, LNG & Underground Storage
Pamela Lacey, AGA Senior Managing Counsel
AGA Subpart W WebinarMarch 13, 2012
OVERVIEW OF WEBINAR
A. Pam Lacey will cover:
1. Sector & Facility Definitions
2. What to Leak Survey & What to Report – by Sector and Facility (Distribution, Compression, LNG, Underground Storage)
3. Best Available Monitoring Methods (BAMM)
4. Confidential Business Information (CBI) & Reporting Deferral Proposed Rule
B. Greg Gasperecz will cover:
1. Equipment-Specific Calculation -- Changes, Challenges and Solutions
2. Leak Detection & Techniques
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Legal Note
The content of this Presentation is not intended as, nor is it a substitute for, legal advice. You should consult with legal counsel for advice specific to your circumstances.
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Subpart W
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First, where’s the rule?? – It’s in 3 or 4 pieces:
1. Nov. 30, 2010 Subpart W Final Rule, as revised by:
2. Dec. 23, 2012 Subpart W Technical Revisions ……with further changes to be made by:
3. Feb. 24, 2012 Subpart W Confidential Business Information (CBI) and Reporting Deferral Proposed Rule (Final later this spring) – may postpone some reporting until 2015!
4. Fall 2012 Rule Changes? -- additional changes to come in response to AGA’s negotiations with EPA to settle our court challenge
See AGA’s “Redline” Subpart W on www.aga.orgTitle 40 Code of Federal Regulations (C.F.R.) Part 98, Subpart W
I. Source Category and Facility Definitions
• Remember – Just because something is in the “source category” does NOT mean it has to be reported for a particular “facility” in that sector
• Source Categories = Industry Sectors
• Source Categories are Defined in 40 C.F.R. 98.230:– Production – Onshore and Offshore Petroleum and Natural Gas
– Processing
– Transmission Compression
– Underground Natural Gas Storage
– Liquefied Natural Gas (LNG) Import/Export
– LNG “Storage” – i.e. Peak Shaving
– Distribution
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Source Categories, continued
Natural Gas Distribution Source Category is defined as:
“the distribution pipelines and
metering and regulating equipment at
metering-regulating stations
that are operated by a Local Distribution Company (LDC)
within a single state
that is regulated as a separate operating company by a public utility commission or
that is operated as an independent municipally-owned distribution system.”
40 C.F.R. 98.230(a)(8), as revised by Technical Revisions, 76 Fed. Reg. at 80574 (Dec. 23, 2012)
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Source Categories, continued
Natural Gas Distribution Source Category excludes:
“This segment also excludes
customer meters and regulators, infrastructure,
and pipelines (both interstate and intrastate)
delivering natural gas directly to
major industrial users and
farm taps
upstream of the local distribution company inlet.”
40 C.F.R. 98.230(a)(8), as revised by Technical Revisions, 76 Fed. Reg. at 80574 (Dec. 23, 2012)
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II. Distribution Facility – Definition & What to Report
• Not just a piece of contiguous property with a fence around it
• Expansive and unprecedented definition of “facility” for both production and distribution in Subpart W
• Subpart W defines a Natural Gas Distribution “Facility” as:– “the collection of all distribution pipelines and – metering-regulating stations – that are operated by a Local Distribution Company (LDC) – within a single state – that is regulated as a separate operating company by a public
utility commission or – that are operated as an independent municipally-owned
distribution system.”
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Leak Detection Survey
Both 2010 and 2011 Final Rules allow several options (98.234):
1. Optical gas imaging instrument (infrared camera)*
2. Method 21 – can use soap solution and wand- An instrument reading of 10,000 ppm or greater is a leak- Question is whether you must measure – or can you assume any leak detected with soap solution is a “leak” (for convenience)
3. Infrared Laser Beam Illuminated Instrument*4. Optical Gas Imaging Instrument*5. Acoustic Leak Detection Device*
* Any emissions detected is a leak unless screened using Method 21, (40 C.F.R. Part 60, appendix A-7) in which case 10,000 ppm or greater is designated as a leak
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What did you leak survey in 2011?
For Distribution – Consensus approach/ interpretation:Reminder: The content of this Presentation is not intended as, nor is it a substitute for, legal advice. You should consult with legal counsel for advice specific to your circumstances. The following was the consensus approach:
Leak survey components at “custody transfer city gates” where LDC owns and operates a meter – 98.232(i) from Nov. 2010 Final Rule --– Connectors– Block valves– Control valves– Pressure relief valves– Orifice meters– Regulators – Open-ended lines (defined in Subpart A – 98.6)
“Any valve, except pressure relief valves, having one side of the valve seat in contact with process fluid and one side open to atmosphere, either directly or through open piping” 9
What did you leak survey in 2011? – continued(Nov. 2010 Final Rule)
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What’s a “Custody Transfer City Gate Station”??
• Different meanings to different companies• No definition in the rule• Vague – not possible to determine what the rule required
you to leak survey• Therefore, AGA challenged the rule in Jan. 2011• Settlement negotiations during 2011• But still supposed to be leak surveying in 2011 …• AGA members reached consensus about how to cope
with the uncertainty pending revisions by EPA…– Stations where custody of natural gas transfers from
upstream supplier to local distribution company (LDC) and
– Where the LDC owns or operates a meter
– Excluding industrial and commercial meter sets & farm taps
SGTC City GateLaughlin, NV
Inlet MAOP 1008 psigOutlet pressure 730 psig
Inlet MAOP 936 psigOutlet pressure 240 psig
Gasline Road City GateVictorville, CA
Gypsum Plant M&RLas Vegas, NV
APEX Industrial M&R StationLas Vegas, NV
Couplings
LDC Leak Surveys under Dec. 2011 Final Rule
• Surprise! Dec. 23, 2011 Subpart W Technical Revisions say ‘oh no, that’s not what EPA had in mind’
• Instead, EPA says they really meant all along for you to leak survey …
– Transmission to Distribution Pressure Regulator Stations (T-D’s)
– With or without a meter
– Could be where you accept natural gas transfer from supplier – or not…
– Oh yeah, … and by the way, this Dec. 23, 2011 rule is retroactive back to Jan. 1, 2011 (!)
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So… What to do about 2011 Leak Surveys?
• No time machine
• So EPA says – use Best Available Monitoring Methods (BAMM)
• Basically, you did what you did. Now call it BAMM.
• BAMM is automatically available for monitoring – i.e. leak survey data for emissions in 2011 – no application required
• To use it for 2012 emissions, you must have filed a Notice of Intent (NOI) at the end of 2011, and you must file a BAMM application by March 30, 2012
• See BAMM Final Rule §98.234(f)(5), and preamble at 76 Fed. Reg. 59533, 59535 (Sept. 27, 2011)
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What Do you Leak Survey in 2012?T-D Stations. What’s that?
• “Transmission-distribution (T-D) transfer station means – a metering-regulating station
– where a local distribution company takes part or all of the natural gas from
– a transmission pipeline and puts it into
– a distribution pipeline.”
– 98.238 Definitions, as revised by Technical Revisions Rule, 76 Fed. Reg. at 80591 (Dec. 23, 2011).
• What’s a Metering-Regulating Station? – “a station that meters the flowrate,– regulates the pressure, – or both, – of natural gas in a natural gas distribution facility.”
• [Remember, if the LDC does not own or operate something, it is not in the LDC’s “Facility”]
– “This does not include [industrial, commercial or residential] customer meters, customer regulators, or farm taps.”
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T-D Station, cont.
• What’s a “transmission pipeline”?– A rate regulated inter-state pipeline regulated by FERC; or – An intra-state pipeline that is rate-regulated by a state utility
commission; or– A pipeline that falls under the “Hinshaw Exemption” under the
Natural Gas Act.– See new definition in Technical Revisions Rule, 76 Fed. Reg. at
80591• What’s a “distribution pipeline”?
– EPA meant to define as anything that DOT PHMSA says is a distribution pipeline
– See preamble and proposed rule– EPA forgot to include this in the final rule – they will have to
correct this omission• Note: A few LDC lines may be “transmission” (20% of SMYS)
for PHMSA, but not transmission under Subpart W definition. EPA is aware of this, but kept the definition of transmission preferred by upstream sectors.
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T-D STATION
TRANSMISSION(FERC/PUC)
DISTRIBUTION(PHMSA)
T-D Station: What Components to Leak Survey?
• 98.238(q) says “you must use the methods described … to conduct leak detection(s) of equipment leaks from all component types listed” in 98.232 for that type of facility.
• Above Ground T-D Stations – Leak Survey: meters, regulators and associated equipment, including equipment leaks from:
– Connectors– Block valves– Control valves– Pressure relief valves– Orifice meters– Regulators, and– Open-ended lines
See 98.238(q) and 98.232(i)(1) in Technical Revisions Rule, 76 Fed. Reg. at 80574 and 80583 - same list as in Nov. 2010 Final Rule, but now you survey T-D Stations rather than custody transfer stations.
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Equation W-30B and Multi-Year Survey Option
• LDCs use Equation W-30B in Technical Revisions Rule to calculate equipment leak emissions per component type “per reporting facility” [not clear – probably meant per station?]
• Multiply number of leaking components by applicable leaker default emission factors in Table W-7
• Input the number of years over which one complete cycle of leak detection is conducted over all the T-D stations – e.g. 5 years
• 5-year Option: effectively reduces the annual survey burden by 80% - because you only survey 20% of your T-Ds per year
• ... AGA is seeking additional flexibility for companies with thousands of T-Ds … one option is to file a BAMM application by March 30, 2012.
• Equations: Greg Gasparecz will discuss problems and challenges with the equations.
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Company-Specific Emission Factor perMeter-Regulator Run
• 98.233(r)(6)(ii) – Population Count and Emission Factors
• Plug the results from Equation W-30B into Equation W-32 to calculate a company-specific emission factor for all your metering-regulating stations – including the T-Ds you leak surveyed. See 76 Fed. Reg. at 80584.
• Lots of problems with the equations. More on that from Greg Gasparecz.
• What if you have No above grade T-Ds?– Just report a count of above grade metering-regulating
stations.
– You “do not have to comply with §98.236(c)(16)(xix)” – which calls for reporting emissions from above grade metering-regulating stations.
– See 98.233(r)(6(ii), 76 Fed. Reg. at 80584 (top of middle column)
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What Else Do LDCs Report?
See §98.232(i) and §98.236(c)(16) in Technical Revisions Rule –
1) in addition to emissions from leak surveys at above ground T-D stations, using Table W-7 emission factors for any components found to be leaking (>10,000 ppm= a “leak”) also report emissions from…
2) Below grade T-D stations (using default emission factor from Table W-7);
3) Above grade metering regulating stations (using company-specific emission factor for those that are not T-Ds);
4) Equipment leaks from vaults at below grade metering-regulating stations (default emission factor from Table W-7)
5) Distribution mains
6) Distribution services
7) Plus CO2, methane and N2O emissions from combustionsources – report under 98.233(z)
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What may reporting may be deferred to 2015?
• Confidential Business Information (CBI) Proposed Reporting Deferral Rule (Feb. 24, 2012)
– comments due April 9, 2012
• What would be deferred for LDCs? – Inputs to Equations:– Miles of pipe
– Annual CO2 and methane emissions from all above grade T-D stations
• So you would collect that information in 2012, but not report it until 2015
• See Pam Lacey’s recent alert for more details for LDCs and other sectors
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Distribution Combustion Emissions – 98.233(z)
• Note – Transmission Compression Stations, LNG and underground storage facilities report combustion emissions under Subpart C
• In contrast, production and distribution facilities report combustion emissions under Subpart W – 98.233(z) and 98.236(c)
• See Equations W-39A, 39B and 40)
• Exemption – No emissions reporting required for small:– Boilers (external combustion) < 5 MMBtu
– Engines (internal combustion) < 1 MMBtu (or 130 horsepower) (NEW in Technical Revisions)
• But… you have to report the type and number of each exempted boiler or engine. 98.233(z)(3) and (4).
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IV. Underground Storage Source Category
• Source definition – see 98.230(a)(5): Underground natural gas storage means:
– Subsurface storage, including depleted gas or oil reservoirs and salt dome caverns that
– Store natural gas – That has been transferred from its original location for the
primary purpose of load balancing…– Natural gas underground storage processes and operations,
including:• Compression• Dehydration• Flow measurement, and• All the wellheads connected to the compression units located at
the facility that inject and recover natural gas into and from the underground reservoirs
– But Excluding:• Transmission pipelines.
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Underground Storage Facility and Reporting Threshold
• Facility definition – standard definition - contiguous boundaries, common ownership
• Reporting Threshold: 25,000 tons per year CO2e• If your underground storage facility’s combustion emissions
tripped over the 25,000 ton per year threshold in 2010: – You reported combustion emissions under Subpart C in 2011, and– In 2012 you need to report both combustion CO2 and methane
leaks for 2011 – by Sept. 30, 2012.– Yes, even if your methane leaks are below the 25,000 tpy CO2e
threshold standing alone, you have to report them, because you are already over the line for combustion emissions.
• If you did not trip over the threshold for combustion emissions,– you could nevertheless trip the threshold now under Subpart W if
your combined CO2 combustion and methane leaks exceed 25,000 tpy CO2e… and
– you would have to report 2011 combustion emissions under Subpart C and methane under W by Sept. 30, 2012
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Underground Storage – What to Report
98.232(f) – CO2 and methane and N2O from:1. Reciprocating compressor rod packing venting2. Centrifugal compressor rod packing venting3. Natural gas pneumatic device venting4. Reserved5. Equipment leaks from (and thus leak surveys)
1. Valves2. Connectors3. Open ended lines4. Pressure relief valves and5. Meters
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LNG Storage (Peak Shaving)
• Source definition – see 98.230(a)(6) – LNG Storage Vessels located above ground– Equipment for liquefying natural gas– Compressors to capture and re-liquefy boil-off gas– Re-condensors and– Vaporization units for re-gasification
• Facility definition – contiguous boundaries, common ownership• Reporting threshold – 25,000 tpy CO2e – No facility in this
sector is likely to be anywhere near that level• Leak surveys in 2011 – will help demonstrate that fact• We want to confirm that you don’t have to repeat that effort –
once should be enough to demonstrate exemption• AGA will use the data to ask EPA to just take this dead letter off
the books
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LNG Import/Export
• Source definition – see 98.230(a)(7) – All onshore and offshore LNG storage vessels located above ground
– Equipment for liquefying natural gas
– Compressors to capture and re-liquefy boil-off gas
– Re-condensors and
– Vaporization units for re-gasification
• Reporting threshold – 25,000 tpy – combined combustion and methane – most are already on the hook under Subpart C…
• AGA working to secure relief from leak surveys, given tiny amount of methane leaks from tight LNG facilities
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What to Report for LNG Import/Export
What to report - 98.232(h) – CO2, methane and N2O from:
1. Reciprocating compressor rod packing venting2. Centrifugal compressor rod packing venting3. Blow down vent stacks4. Equipment leaks from (and thus leak surveys)
1. Valves2. Pump seals3. Connectors4. Vapor recovery compressors and5. Other equipment leak sources
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CONCLUSION
• While the Technical Revisions and other changes have improved the rule
• New errors and problems were also created
• AGA working on these
• Come to the Operations Conference in San Francisco May 2-4, 2012 to hear what’s next
• Now- Greg Gasperecz will help you make sense of the equations and reporting calculations…
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