Natural Gas Emissions Continuing the Downward Trend

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Sep 23, 2014 - Gas Utilities. • Pipeline ... natural gas is emitted from systems operated by natural gas utilities ...
GTI Methane Conference Sept. 23, 2014

Natural Gas Emissions Continuing the Downward Trend

Bringing it Home

• Safe and Reliable Gas Delivery is Core Business of Natural Gas Utilities

• Pipeline Safety Initiatives are Driving Natural Gas Emissions Down • AGA: Focus on Data Driven Decisions

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Natural gas systems represent a small share of annual GHGs

Source: Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990-2012, Environmental Protection Agency 3

U.S. Methane Emissions by Source

Enteric Fermentation 25% Other 9%

Petroleum Systems Manure 6% Management 9%

Natural Gas Systems 23% Landfills 18%

Coal Mining 10% 4

Technological advances, industry best practices, and infrastructure investment… add up to a declining emissions trend Natural Gas Distribution Systems Methane Emissions (Million Metric Tons of Carbon Dioxide Equivalent)

40 35 30 25 20 15 10 5 -

33

1990

30

2005

30

29

28

28

26

2008

2009

2010

2011

2012

EPA Estimates of Natural Gas System Methane Emissions Show a Continued Decline Source: Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990-2012, Environmental Protection Agency

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Emissions Leakage Rates

Only

0.24%

Production 130 Bcf 0.41%

of produced natural gas is emitted from systems operated by natural gas utilities

Processing 122 Bcf 0.38%

Approximately 1.3% of gross natural gas production (31 Tcf) is estimated to be emitted throughout the supply chain.

Transmission & Storage 84 Bcf 0.27%

Distribution 66 Bcf 0.24%

Source: U.S. Department of Energy and U.S. Environmental Protection Agency

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EPA Inventory • Annual Inventory of Greenhouse Gas Emissions in the U.S. (April 15, 2014) covers emissions 1990-2012 • Emissions from entire natural gas value chain in 2012 = 1.3% of annual produced natural gas • Of this – only 0.24% of produced natural gas was emitted from distribution systems

• Estimates are based on 20-year old emission factors for plastic pipe, cast iron, bare steel, etc. • Newer data should show distribution system emissions are actually much lower

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Methane Emissions from Natural Gas Systems (million metric tons of CO2 equivalent) Change 1990 56

2005 67

2008 64

2009 54

2010 48

2011 43

2012 42

1990 2012 -25%

Processing

18

14

15

16

15

18

19

4%

Transmission and Storage

49

41

43

44

43

45

44

-12%

Distribution

33

30

30

29

28

28

26

-22%

156

152

152

143

135

133

130

-17%

Stage Field Production

Total

Source: Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990-2012, Environmental Protection Agency 8

Emissions Have Declined Even as Pipeline Miles Have Grown Pipeline Replacement Lowers Emissions Million Metric Tons CO2equivalent

Estimated Potential Emissions from Main Pipe

Thousand Miles of Main

Installed Main Pipe

13

1,300

12

1,200 1,100

11

1,000 10

900 9

800 700

7

600

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

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Source: AGA Analysis based on Department of Transportation data and EPA Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990-2012 9

Are EPA’s Numbers Too High? Yes • We think EPA’s Inventory numbers are still too high – based on 20year old emission factors • “Bottom-up” studies – • Measure emissions directly from specific sources • Multiply average measured emissions times number of widgets or miles of pipe to estimate overall emissions • Environmental Defense Fund (EDF) Methane Studies: • Production: Texas University (TU)- EDF Production study published Sept. 2013 – • showed emissions from well completions much lower than EPA estimated • Partly offset by higher emissions from pneumatic valves • Net result somewhat lower than EPA Inventory estimate

• Distribution: Washington State University (WSU) – EDF MultiCity Distribution Study – expected Fall/Winter 2014

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Emission Measurement Debate • “Top-Down” Studies – measure methane concentrations in atmosphere – with devices mounted on towers or airplanes or vehicles • Fly-over studies by NOAA and others • Colorado & Utah - 2012 • Denver-Julesburg Basin in Colorado – 2013 • Marcellus – April 2014 • Drive-by studies • Boston • Washington, D.C. • Reconciling Top-Down with Bottom-Up: DOE National Energy Technology Laboratory (NETL) – Penn State Marcellus Shale Study

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Major AGA Initiatives: Principles Continuing the Declining Trend – Approved by AGA Board Jan. 2014 • • • • • •

Safety First Balance Consumer Costs Support Accelerated Cost Recovery for Pipeline Replacement Support Emissions Measurement Research Identify Effective Emission Reduction Practices Encourage Upstream Suppliers to Identify and Deploy Costeffective Best Practices for Reducing Natural Gas Emissions

• See www.aga.org Our Issues/Natural Gas Emissions

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Major AGA Initiatives: Guidelines • AGA Natural Gas Emission Reduction Guidelines • Approved by AGA Board – May 17, 2014 • Outlines voluntary practices for continuing the downward trend in emissions, focusing on safety and system integrity • List of 8 practices – not all are applicable everywhere:

1.

2. 3. 4.

Modernize Distribution Systems – Replace cast iron, bare steel, or other pipe based on fitness for service, at a pace approved by state utility commission Replace High Bleed Pneumatic Devices Damage Prevention Programs Reduce Venting during Blow Downs

5.

Annual Inspection & Maintenance at Stations

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Major AGA Initiatives: Guidelines Plus three measures that may make sense in some circumstances: 6. Composite wrap to repair non-leaking pipe defects, to avoid venting the line. 7. Encapsulate or replace joints. 8. Modernize systems by lining existing pipe as appropriate.

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Marginal Abatement Cost Curve For Methane Emissions

Source: ICF International, Economic Analysis of Methane Emission Reduction Opportunities in the U.S. Onshore Oil and Natural Gas Industries, March 2014

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States with Accelerated Infrastructure Replacement Programs

• The overall trend is positive • Nine states moved to adopt programs in 2013, alone

• NJ, MA, PA & DC have adopted pipeline safety measures in 2014 • States address this issue differently • The basis for these decisions is always just and reasonable rates for consumers

EPA Gold STAR Proposal • “Facility” = same definition under Subpart W Greenhouse Gas Reporting Rule = • Processing plant • Compressor station… • Entire distribution system within a single state • Distribution – to earn Gold STAR for your “facility” – key items: 1. Replace 10% per year of your total inventory of cast iron and bare steel pipe… AGA comments: This is Not Feasible 2. Replace high bleed pneumatic valves 3. Do things that reduce methane venting during pipe blow down operations • Platinum Level – If you roll this out to other “facilities” •

http://www.epa.gov/gasstar/documents/Gas_STAR_Gold_proposedframework.pdf

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EPA Gold STAR • AGA has proposed a more workable approach • Sliding scale for percentage pipe replacement – • Some older distribution systems have large inventories of cast iron and unprotected steel pipe • Gas utilities must have state utility commission approval – balancing safety and cost to consumers

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AGA Gold Star Counter-Proposal Replace cast iron and/or protected steel (not cathodically protected) distribution mains at the following rates:

Tier • Tier 1 • Tier 2 • Tier 3 • Tier 4

Inventory < 500 Miles 500-1,000 Miles 1,001-1,500 miles ≥ 1,500 Miles

% Annual Replacement Rate 6.5% 5% 3% 2%

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Natural Gas: A Climate Solution 2012 Study by Dr. Ramon Alvarez: Immediate climate benefits for fuel switching to natural gas if methane emissions – • 3.2 % - Power Plants – Coal to Nat Gas • 1.4% - Light Duty Vehicles – Gasoline to Nat Gas • 1% - Heavy Duty Vehicles • EPA Inventory: Methane already down to 1.3% • … and we think it is actually lower

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EPA Proposed 111(d) CO2 Rule for Existing Power Plants • AGA not commenting on how to set the state emission reduction goals • AGA is advocating for flexible compliance options: • Natural gas not just for power plants • Reduce cost by looking outside the fence for compliance: • Demand side management • Renewable Energy, and yes… • Natural Gas for homes and businesses Natural gas used for direct thermal load  heating water and space  Cuts net CO2 emissions by 50% on average

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Direct Use of Natural Gas

Is the Clean, Efficient Choice The direct use of natural gas in America’s homes and businesses maintains about 92% of its usable energy, and a household with natural gas versus all-electric appliances produces 37% lower greenhouse gas emissions. Consumers can save on their monthly utility bills through converting their households to natural gas.

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Converting natural gas or any other fossil fuel into electricity to power comparable electric enduse products and appliances only maintains 32% of usable energy.

Extraordinarily Efficient • America’s natural gas delivery system is extraordinarily efficient with 92% of the natural gas produced at the wellhead being delivered to customers as usable energy.

• In typical home appliances, the direct use of natural gas results in energy consumption that is 28% less than a similar home with all-electric appliances. • Natural gas water heaters are nearly 50% more efficient on a full-fuel-cycle energy comparison. Natural gas furnaces and boilers are up to 96% efficient. “For appliances for which there is a choice of fuel, such as storage water heaters and heating equipment, efficiency ratings should be calculated using the extended site measure of energy consumption…” Recommendation of the National Academies

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Source: Gas Technology Institute

Pamela A. Lacey Senior Managing Counsel, Environment [email protected] 202.824.7340

Find Us Online www.aga.org www.truebluenaturalgas.org http://twitter.com/AGA_naturalgas www.facebook.com/naturalgas www.linkedin.com/company/50905 ?trk=tyah

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