Sizing Up EPA's New Voluntary Methane Reduction Program

The U.S. oil and gas industry released more than 7.3 million metric tons of methane into the atmosphere in 2013, a three percent increase over 2012 - that's an amount of gas worth nearly $2 billion, and enough to supply about 6 million American homes. The sector is the largest source of industrial methane pollution in the country. And not even the industry disputes that methane is a potent greenhouse gas.

So what are we going to do about it?

Earlier this year, the Administration took the first and most important step so far, setting a national goal to reduce oil and gas methane emissions by 40 to 45 percent over the next ten years (to achieve this, rules will need to cover both new and existing emitters, but that's another story). The first round of proposed regulations is due later this summer.

In the meantime, yesterday EPA released the draft framework for its updated voluntary Natural Gas STAR Methane Challenge Program. Well-designed voluntary initiatives like this one have always been a potential complement to concrete rules, helping to define and showcase best practices. We commend the agency on this new effort.

But did EPA hit the mark - will this program achieve real, measurable, verifiable benefits for the environment? Does it fairly recognize and reward those companies that step up to innovate and lead? Let's take a closer look at the proposal against a list of critical elements necessary for an effective voluntary program. (Short answer: It's a good start, with some clear opportunities for improvement.)

1. EPA's monitoring and repair requirements must be rigorous

We have said it's critical to include frequent monitoring and repair of methane leaks as a bedrock piece of any program in order to achieve reductions. The record on this is clear. Research has found, for example, that monthly leak inspections reduce methane emissions by 80 percent, while annual inspections cut them by less than half.

In its new proposal, EPA lists monitoring and repair programs as a best management practice (BMP) being considered as an optional commitment for companies, but hasn't provided specifics on frequency, methodology, or scope of coverage (although they say there will be more specific guidance in the final proposal). We are glad to see monitoring and repair included as a BMP, and urge EPA to provide rigorous specifics around the how, when, and where of that practice to ensure it is maximally effective in reducing leaks.

2. EPA should continue to provide guidance for setting goals early and meeting them promptly

We recommended that EPA's program should require companies to set concrete, near-term goals, taking advantage of one of the biggest opportunities of voluntary programs: that they provide an opportunity to move quickly. Specifically, we suggested requiring two- to three-year initial objectives, with five-year targets being the absolute latest.

EPA's proposed framework reflects the importance of swift action, stating in its proposal that "timing for full completion of commitments should not exceed five (5) years from the commitment date," and encouraging companies to "complete commitments in a shorter timeframe when appropriate."

3. Technology measures for key sources and continuous improvement are included, but management practices are overlooked

We recommended EPA include a comprehensive set of technologies and deployment practices to reduce emissions, while also including training, incentives, and other management practices to boost capability, motivation, and performance. The new proposal includes such measures for many key emissions sources, and we're glad to see EPA supporting continuous improvement, including development for tomorrow's leak detection technologies.

In the final framework, we urge EPA to incorporate training, incentives, and related management practices to ensure that technologies and processes are deployed correctly and consistently to maximize emission reductions in the field. A true "best management practice" approach should take this broader lens. The program could offer a genuine opportunity to showcase and spread effective approaches that the best-run companies instill through their management systems.

4. EPA is improving the transparency of the program by proposing annual reporting, but should provide more context around what defines progress

The state of methane disclosure badly needs improvement- a topic EDF will explore more deeply in the coming months. We have said that for any voluntary program to be meaningful, it needs standard metrics and regular reporting by both the EPA and participating companies. We also noted that an improvement to Natural Gas STAR would be to require reporting on an annual basis.

EPA's new proposal takes steps toward this goal, providing guidelines for both agencies and participating companies to report on progress yearly. It makes sense for Subpart W of the Greenhouse Gas Reporting Program, which includes facility-level methane reporting for certain sites, to be leveraged for efficiency's sake, but because Subpart W is often based on emissions factors - not company-specific measurements - it is important that the "supplemental information" EPA refers to includes direct quantification of actual emissions.

We also encourage EPA to think carefully about the key metrics to be reported, as Subpart W itself is a mass of data - not streamlined, actionable performance metrics. A positive attribute of the One Future option is its focus on methane intensity as a trackable key metric for emissions reductions. Standardized metrics enable comparisons of both individual company performance over time and performance between different companies.

What's Next?

We're glad to see that EPA has taken some significant steps to improve its voluntary methane reduction program for those in the oil and gas industry, and look forward to the proposal being further developed and strengthened as it is finalized. EPA asked for stakeholder feedback on the draft by September 1st, which it plans to incorporate into a final framework.

We hope that more companies will demonstrate leadership by joining the program, and making and keeping commitments to dramatically reduce emissions. We hope to give credit where credit is due. But given the realistic rate of participation (using years of experience as our guide), it's clear that comprehensive standards are necessary to protect the health of all communities, put the brakes on the rate of climate change, and allow gas to play a credible role in transitioning to a low carbon economy.

This blog is cross-posted with EDF's blog, Energy Exchange.

Photo credit: Earthworks