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February 26, 2013
EPA underestimates O&G emissions, says OIG

The explosive growth of the domestic onshore oil and gas (O&G) industry has outpaced EPA’s ability to accurately measure and/or confidently estimate regulated emissions from the sector, reports the Agency’s Office of Inspector General (OIG).

This has resulted in an underestimation of O&G emissions in EPA’s National Emissions Inventory (NEI), a critical tool in the Agency’s risk assessments and development of rules.  Moreover, the EPA does not have a comprehensive strategy for improving its O&G emissions inventory, which, EPA staff told the OIG, results from Agency failure to anticipate both the growth in the sector and additional staff and resources that must be committed to the job. 

11,000 new wells a year

O&G’s growth has indeed been remarkable.  The OIG notes that the number of producing gas wells in the United States grew by 76 percent from 1992 to 2010; about 11,000 new wells were drilled annually over the same period; and the country had nearly 1.1 million producing wells in 2009.  Growth in gas production has been particularly significant in EPA Regions 3, 6, and 8.  For example, in the plains and mountain states comprising Region 8, the number of gas wells increased by 416 percent and gross withdrawals increased by 163 percent between 1992 and 2010. 

In contrast, onshore production of crude oil decreased by over 40 percent between 1992 and 2010, but an increase is expected in future years. 

Full-time employees

The OIG noted that three EPA offices—the Office of Air Quality Planning and Standards (OAQPS), the Office of Atmospheric Programs (OAP), and the Office of Research and Development (ORD)—are responsible for collecting emissions data and developing methods to measure and/or estimate emissions.  There have been some recent increases in resources and staff devoted to O&G activities, but the EPA is still playing catch-up.  As an example, the OIG notes that from 2010 to 2011, the OAQPS had about five full-time employees per year devoted to such O&G activities as rulemaking development.  

The OIG concedes that emissions of air pollutants from O&G operations are difficult to quantify.  Emissions can vary widely based on the type of geological formation (e.g., coalbed methane or conventional gas well), the age of the well, and the season and temperature.  Emissions can be effectively measured directly, but this can be physically difficult and risky.  Alternatively, regulated parties may use emissions factors developed by the Agency.  These are representative values that relate the quantity of a pollutant released with an activity associated with its release. 

Emissions factors

But the OIG reports that about half of EPA’s emissions factors for O&G production are rated poor or below average or are unrated. Consequently, the use of O&G emissions factors has resulted in incomplete data reported by states and industry for use in the NEI.  For example, only nine states submitted criteria pollutant emissions data for small stationary O&G sources for the 2008 NEI, the most recent inventory.

“Because so few states submitted data for this sector, we believe the NEI likely underestimates oil and gas emissions,” states the OIG.  “This hampers EPA’s ability to accurately assess risks and air quality impacts from oil and gas production activities.”

NESHAP and NSPS

Questionable emissions data lead to questionable regulatory decisions, notes the OIG, which points to the Agency’s 2012 revisions to the New Source Performance Standards (NSPS) and National Emission Standards for Hazardous Air Pollutants (NESHAP) and other rules affecting the sector (e.g., NESHAP for reciprocating internal combustion engines, and NSPS for stationary spark ignition internal combustion engines). 

For example, the OIG reports that the OAQPS lacked data on well completions and evaporative ponds in conducting analyses for the proposed revised 2011 NSPS and NESHAP rules.  Due to the lack of directly measured VOC data, OAQPS staff used GHG inventory estimates of methane emissions to derive estimates of VOC emissions coming from well completions.  In addition, the EPA stated in the proposed rules that it could not regulate evaporative ponds (fugitive emissions) due to a lack of emissions data.

The OIG recognizes that the EPA is engaging in efforts to collect additional emissions data, but these efforts have been limited in scope and future funding is limited.  The OIG recommends that the Agency prioritize which data limitations are most significant and address these through a comprehensive cross-office strategy.  Equally important is the need to update emissions factors for O&G production and develop new factors for key processes that lack emissions factors.  Recommendations to improve emission reporting by states were also made.

Click here for the OIG report.

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