Methane Leak Management

What Is Methane Leak Management Policy?

Methane (CH4) is a potent greenhouse gas (GHG). It has over 80 times the warming power of carbon dioxide over a 20-year timeframe, and roughly 25-30 times the warming power over a 100-year timeframe. According to the U.S. Environmental Protection Agency, natural gas and petroleum systems emitted more than 175 million metric tons of carbon dioxide-equivalent emissions in 2018 – and that is just what we were able to detect.

Methane leaks, also referred to as “fugitive emissions,” are unplanned losses of methane from pipes, valves, and other equipment. Since leaks are estimated to account for roughly half of methane emissions from the oil and gas sector,[1] government policies that require companies to monitor and manage leaks can reduce methane emissions substantially.

How Does Methane Leak Management Policy Work?

Methane leak management policy works by requiring oil and gas companies to implement two activities across their operations: Leak detection and repair (LDAR). Detection consists of surveying and monitoring natural gas and oil systems, including extraction sites and pipeline networks, for sources of inadvertent methane leakage. Repair refers to the implementation of emissions control technologies, including the replacement of leaky equipment. Policy dictates the frequency of these activities and the performance or technology requirements for components of oil and gas systems. For instance, California’s methane regulations require daily audio/visual inspection, quarterly leak measurement, and standards for components like pumps, natural gas compressors, and tanks.

Companies typically comply with these policies by hiring contractors to conduct inspections on a quarterly, semi-annual, or annual basis. Multiple studies have found contractor-implemented LDAR to be a cost-effective approach to methane emissions reduction.[2]

Key Design Considerations

Should standards for leak management be technology-specific or performance-based? Should the policy require use of the best available control technologies (BACT) to enable ongoing improvement?

How often should monitoring and inspection be required?

How reasonable and equitable are the costs of compliance with the policy? Does the policy favor larger companies with more ability to pay for LDAR over smaller operators?

Should the policy come with technical or financial assistance to help operators comply?

U.S. Experience

The U.S. Environmental Protection Agency (EPA) has authority to regulate methane emissions from oil and gas systems. In 2016, the EPA established new source performance standards (NSPS) for methane leakage, with the goal of cutting methane emissions from the oil and gas sector to 40-45% below 2012 levels by 2025. The rule required owners and operators to abide by a fixed schedule for LDAR. In 2019, the EPA proposed to rescind the 2016 methane leak management rule, and that rollback is expected to become final in July 2020.[3]

A number of U.S. states have also implemented methane leak management policy. California, Colorado, Massachusetts, Ohio, along with Pennsylvania and Wyoming – two top oil and gas producing states –have implemented regulations to curb methane leaks in the oil and gas industry.[4]

Related Policies

Performance Standards (General)