Natural gas drillers in the United States would have to take steps to rein in “fugitive” greenhouse gas emissions under proposal unveiled today by the Obama administration.

The emissions that escape during drilling, transporting or storing of natural gas have stirred widespread controversy, forcing a rethinking of whether natural gas is as environmentally friendly as sometimes claimed. One of the industry’s main selling points has been that when burned at the power plant for electricity, natural gas produces half the greenhouse gas emissions of coal.

But methane, the primary constituent of natural gas, is a strong greenhouse gas – more than 20 times more potent than carbon dioxide. It has long been known that methane sometimes leaks from pipes and storage tanks. Recently, critics have focused on the emissions that occur during the completion of hydraulically fractured wells—the unconventional gas drilling that has taken off across the United States in the past six years.

A paper by researchers at Cornell questioned whether use of natural gas has any benefit at all over coal when fugitive emissions are taken into account. The natural gas industry said that Cornell’s scientists used outdated information, and shot back with its own analysis reaffirming gas’s benefits over coal.  But meanwhile, the U.S. Environmental Protection Agency’s 2011 greenhouse gas inventory said that fugitive emissions from unconventional natural gas production may be far greater than previously thought.

See a discussion on fugitive natural gas emissions at this year’s Aspen Environmental Forum.

The EPA today proposed rules that for the first time seek to make sure that natural gas truly cuts greenhouse gas emissions. Today, the EPA proposed standards that aim to cut smog-forming volatile organic compound (VOC) emissions from several types of processes and equipment used in the oil and gas industry, including a 95 percent reduction of emissions from new and modified fracked wells. It would require that producers capture the natural gas that currently escapes to the air and make that gas available for sale. So-called “green completion” technologies are already in use by several companies and required in some states, the EPA noted. Methane actually would be reduced as a side benefit of the rule’s primary aim, reduction of smog-forming VOCs. Toxic air pollutants such as benzene also would be cut.

With most proposed regulations, the EPA comes up with a cost estimate. But in this case, the agency said so much natural gas that could otherwise be sold is being wasted through emissions, the proposed rule would actually result in a net savings of $30 million annually while reducing pollution.

The information that EPA has put out with its proposal also makes clear how bad the government thinks the fugitive emissions problem is. The rules, which would require new controls for the more than 25,000 wells fractured and refractured each year, as well storage tanks and other pieces of equipment, would cut 3.4 million tons of methane. That’s equal to 65 million metric tons of carbon dioxide equivalent, about two and a quarter times more than the emissions from cement production in the United States (29 million tons CO2 equivalent).

But the EPA took the opportunity to reaffirm its support for natural gas in making the announcement. “This administration has been clear that natural gas is a key component of our clean energy future, and the steps announced today will help ensure responsible production of this domestic energy source,” said Gina McCarthy, assistant administrator for EPA’s Office of Air and Radiation.

EPA is under a court order to get a final rule in place on the natural gas air pollution problem by next February. The agency will soon release details on public hearings on the proposal o take place in three hotbed areas for natural gas fracking, Dallas, Denver and Pittsburgh.

More information on the EPA’s proposal is here: http://epa.gov/airquality/oilandgas/

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