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EconomicAnalysisof

MethaneEmission
ReductionPotentialfrom
NaturalGasSystems

May2016

Preparedfor
ONEFutureInc.

Preparedby
ICFInternational
9300LeeHighway
Fairfax,VA22031

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EconomicAnalysisofMethaneEmissionReductionPotentialfromNaturalGasSystems

Contents
1. ExecutiveSummary............................................................................................11
2. ApproachandMethodology...............................................................................21
2.1. OverviewofMethodology...............................................................................21
2.2. IdentificationofTargetedEmissionSources...................................................22
2.3. SelectedMitigationTechnologies...................................................................25
2.4. TreatmentofLDCReductions........................................................................213
2.5. CompletionEmissionsfromHydraulicFracturing.........................................214
2.6. SourceCategoriesNotAddressed.................................................................214
3. AnalyticalResults...............................................................................................31
3.1. DevelopmentofEmissionControlCostCurves...............................................31
AppendixA.SummaryandComparisonofAssumptionsandResults........................A1
AppendixB.DataSources.........................................................................................B1

Figures
Figure212012OnshoreEmissions(Bcf)fromEPAInventory......................................24
Figure31ExampleMACCurve.....................................................................................34
Figure32NationalAggregateMACCurvebyMeasure...............................................35
Figure33NationalAggregateMACCurvebyIndustrySegment.................................35

Tables
Table21Highest(Top24)EmittingOnshoreMethaneSourceCategories.................23
Table22SummaryofMitigationMeasuresModeled..................................................25
Table23SummaryofMitigationMeasureCharacteristics(GulfCoastCostBasis).....28
Table24CalculatedEmissionReductionCostperMitigationTechnologyorPractice
(GulfCoastCostBasis)....................................................................................29
Table25LDARHourlyCostCalculation......................................................................211
Table26CostCalculationAnnualLDAR..................................................................212
Table31AnnualizedMethaneReductionandCostU.S...........................................32

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ExecutiveSummary

AcronymsandAbbreviations
Acronym/Abbreviation

StandsFor

AR4

UNFCCCFourthAssessmentReport

Bcf

BillionCubicFeet

CapEx

CapitalExpenditures

CH4

Methane

CO2

CarbonDioxide

CO2e

CarbonDioxideEquivalent

EDF

EnvironmentalDefenseFund

EIA

U.S.EnergyInformationAdministration

EPA

U.S.EnvironmentalProtectionAgency

ESD

EmergencyShutdown

FERC

FederalEnergyRegulatoryCommission

GHG

GreenhouseGas

GHGRP

GreenhouseGasReportingProgram

GWP

GlobalWarmingPotential

HAP

HazardousAirPollutant

hp

Horsepower

IR

Infrared

LDAR

LeakDetectionand Repair

LDCs

LocalDistributionCompanies

LNG

LiquefiedNaturalGas

MAC

MarginalAbatementCost

Mcf

ThousandCubicFeet

MMcf

MillionCubicFeet

MMTCH4

MillionMetricTonnesMethane

MMTCO2e

MillionMetricTonnesCO2 equivalent

scf

StandardCubicFeet

scfd

StandardCubicFeetperDay

scfh

StandardCubicFeetperHour

VRU

VaporRecoveryUnit

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ExecutiveSummary

1. ExecutiveSummary
OurNationsEnergyFutureCoalition(ONEFuture)1commissionedICFtoconductthisanalysisofthe
marginalabatementcost(MAC)ofvariousmethaneemissionabatementtechnologiesandwork
practicesforthenaturalgasindustry.ThegoalofthisMACanalysisisthreefold:(1)toidentifythe
emissionsourcesthatprovidethegreatestopportunityformethaneemissionreductionfromthe
naturalgassystem,(2)todevelopacomprehensivelistingofknownemissionabatementtechnologies
foreachoftheidentifiedemissionsources,and(3)tocalculatethecostofdeployingeachemission
abatementtechnologyandtodevelopaMACcurvefortheseemissionreductions.Thefindingsofthis
reportwillbeutilizedbyONEFuturetodevelopsegmentspecificmethaneemissionreductiongoals
that,whencombined,willachieveacollective1%(orless)emissiontargetinthemostcosteffective
manner.ThisreportwillalsoassisteachONEFuturemembertocustomizeitsabatementstrategytofit
itsparticularemissionprofile.
ThisanalysisisbasedonaMACcurvemodeldevelopedbyICFfortheEnvironmentalDefenseFund
(EDF)in2014.Thecurrentstudyincorporatesmorerecentinformationonemissionsandequipment
costsandmodifiedassumptionsprovidedbytheOneFutureparticipants.AppendixAsummarizesand
comparesthekeyassumptionsandresultsforthetwostudies.Thestudyutilizedthefollowing
approach:

ThebaselineformethaneemissionsfromthenaturalgassectorwasestablishedastheU.S.EPA
InventoryofGreenhouseGasEmissionsfor2012tomatchthebaselineyearemployedintheU.S.
methaneemissionsreductiongoals.2

Areviewofexistingliteratureandadditionalanalysiswasconductedtoidentifythelargestemission
reductionopportunities;acostbenefitestimateforeachofthemitigationtechnologieswas
calculated.

InterviewswithOneFuturemembers,industry,technologyinnovators,andequipmentvendors
wereconductedwithaspecificfocusonidentifyingadditionalmitigationoptionsandcharacterizing
thecostandperformanceoftheoptions.

InformationfromtheanalysiswasusedtodevelopMACcurvesforthemethanereduction
opportunities.

Theanalysisestimatesreductionsforeachsegmentofthenaturalgasindustry.TheMACanalysis
identifiedreductionstotaling88.3Bcf/yearofmethaneatatotalannualizedcostof$296millionor
$3.35/Mcfofmethanereducedforallsegmentsexceptthedistributionsegment.Thereductionsforthe
distributionsegmentwerecalculatedseparately,andtotal8.9Bcf.Anadditional12.3Bcfofreductions
wereprojectedfortheapplicationofreducedemissioncompletionsforgaswellswithhydraulic

ONEFutureisacoalitionofcompaniesthataimstoachieveanaveragerateofmethaneemissionsacrosstheentirenatural
gasvaluechainthatisonepercentorlessoftotalnaturalgasproduction.
2
ThisanalysiswascompletedpriortotheupdatestothemethodologiesincorporatedintotheU.S.GreenhouseGasInventory
(GHGI)onApril,15,2016.

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ExecutiveSummary

fracturing.Thiswasnotrequiredin2012butisnowlegallyrequired,andwasthereforeincludedasa
reductionfromthebaselinebutnotaspartoftheMACanalysis.Thisbringsthetotalindustrywide
methanereductionto109.5Bcffromthe2012baselineemissions.

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ApproachandMethodology

2. ApproachandMethodology
2.1. OverviewofMethodology
Thissectionprovidesanoverviewofthemethodologyappliedforthisstudy.Themajorstepswere:

Establishthe2012BaselineforanalysistheanalysisstartedwiththeU.S.EPAinventoryof
methaneemissionsintheEPAInventoryofU.S.GHGEmissions(GHGI)publishedinApril2014with
datafor20123.ThemostrecenteditionoftheInventory,releasedinApril2016,includessignificant
revisions,whicharenotincludedinthisanalysis.ICFexpectsfutureinventorieswillbeupdatedto
incorporateadditionalemissionsandactivitydatacollectedfromactivitiesinclude:

GreenhouseGasReportingProgram(GHGRP)inventorydatacollectedin2016fromcompanies
inthegatheringandboostingsegment;

InformationCollectionRequest(ICR)4foradditionalregulations,whichwillrequireoperatorsto
providekeyactivityandemissionsdata;and

PrivateandGovernmentsponsoredscientificstudies,includingseveralmultimilliondollar
researchprojectsfocusedonmethaneemissionsfromoilandgasoperationssponsoredby
DepartmentofEnergy5
PotentialfutureupdatestotheGHGImayrequireafutureupdateofthisanalysistoincludethose
changes.

Identificationofmajorsourcesandkeymitigationoptionsthenextstepwastoidentifythe
largestemittingsourcesintheinventoryandthemitigationoptionsthatwouldbemosteffective
andcosteffectiveforthesesources.

Characterizationofemissionreductiontechnologiesakeypartofthestudywastoreviewand
updateinformationonthecostandperformanceoftheselectedmitigationtechnologies.
InformationwasgatheredfromONEFutureMembers,equipmentmanufacturers,otheroilandgas
companies,andotherknowledgeableparties.

Developmentofthemarginalabatementcostcurvesthetechnologyinformationwasappliedto
theemissionsinventorytocalculatethepotentialemissionreductionandcost.Theresultswere
displayedinaseriesofmarginalabatementcostcurves.

Theanalysiscalculatestheannualizedcostofemissionreductionsbasedonthecapitalandoperating
costsoftheemissionreductiontechnologiesandthevalueofrecoveredgasintheproductionsegment.
Thisannualizedcostisdividedbytheemissionreductionstocalculatetheprimaryfigureofmerit

U.S.EPA,InventoryofU.S.GreenhouseGasEmissionsAndSinks:19902012,
http://www.epa.gov/climatechange/ghgemissions/usinventoryreport.html
4
https://www3.epa.gov/airquality/oilandgas/methane.html
5
http://www.netl.doe.gov/research/oilandgas/projectsummaries/naturalgasresources

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ApproachandMethodology

$/unitofemissionsreduced.Thisisexpressedas$/Mcfmethanereduced,$/tonnemethanereduced,or
$/tonneCO2equivalentreduced.Thisfigureofmeritisconsistentwiththeformatusedinother
pollutioncontrolprograms(SO2,NOx,VOC,etc.),whichtypicallyfocuson$/tonofpollutantreduced.
Inthe2014reportforEDF,ICFconcludedthattheweightedaveragemethanereductioncostwas
$0.66/Mcfofmethanereduced.Theannualcostswerealsopresentedasnormalizedbygrossnatural
gasproduction,dividingtheannualcostbytotalU.S.naturalgasproduction.Sincemethaneemissions
areonlyafewpercentoftotalproduction,thisvalueisverysmalllessthan$0.01/Mcfofgasproduced
intheU.S.,dependingonthespecificassumptions.Howeverthissecondmetricisdifferentfromthe
approachtypicallyusedbyindustryandregulatorstocharacterizethecosteffectivenessofemission
reductiontechnologiesandshouldnotbecomparedtoa$/unitofmethanereduced.Inaddition,the
ONEFuturesponsorcompaniesreportedthatthemetricthatfocusesonmethanereducedismore
usefultocompaniesoperatingindifferentsegmentsinassessingtechnologiesandopportunitiesatnew
andexistingfacilitieswithineachsegment.Therefore,thisreportemploysonlythemorecommonly
usedweightedannualcostpermethanereduced.

2.2. IdentificationofTargetedEmissionSources
Table21summarizesthelargestemittingsourcecategoriesfortheoilandgassectorsbymajorsource
categoryintheEPAinventoryfor2012.Duetothelackofspecificdataontheemissionsourcesfor
offshoreoilandgasproduction,thestudyfocusedononshoreproductionandoffshoreemissionsare
excludedfromthislist.Thetop24sourcecategoriesaccountfornearly90%ofthetotal2012onshore
methaneemissionsof353Bcfandweretheprimaryfocusofthisanalysis.Theremaining100+
categorieseachaccountfor1%orlessofthetotalemissions.Althoughtherearedemonstrated
methanereductiontechnologiesthatcanprovidecosteffectivereductionsformanyofthesesmaller
sources,thesesourcecategorieswerenotincludedinthisanalysisduetotheirrelativeminor
contributiontotheoverallemissionsandreductionopportunity.Inaddition,the2014inventoryfor
2012hasalimitedrepresentation6ofthegatheringsegmentandthereforetheanalysislikelydoesnot
representthefullpotentialreductionsthatcouldbeachievedfromthissegment.
ThedistributionofemissionsourcesisshowninTable21andFigure21.Fugitiveemissionsarethe
largestemissionsourcecategoryoverallacrosstheoilandnaturalgassystems.Ventedemissionsfrom
pneumaticcontrollersandpumps,andventingfromwetsealcentrifugalcompressorsaresomeofthe
significantmethaneemissionsventingsourcesfromthenaturalgasindustry.Completionemissionsfrom
hydraulicfracturingwereasignificantsourceatthistimehoweverhavesincebeenregulated.

SeeTable1,InventoryofU.S.GHGEmissionsandSinks:RevisionUnderConsiderationforGatheringandBoostingEmissions,
February2016

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Table21Highest(Top24)EmittingOnshoreMethaneSourceCategories

2012
Cumulative
Emissions
Bcf
(Bcf)

Source

2012
Emissions
(MM
tonnes)

Percent Cumulative
Type*
ofTotal
%

ReciprocatingCompressorsFugitives

56.6

56.6

1.1

16%

16%

IntermittentBleedPneumaticDevices

28.5

85.1

0.5

8%

24%

EngineExhaust

26.6

111.7

0.5

8%

32%

CentrifugalCompressors(wetseals)

20.2

131.9

0.4

6%

37%

MeterandRegulatorStations

19.9

151.9

0.4

6%

43%

HighBleedPneumaticDevices

15.4

167.3

0.3

4%

47%

ReciprocatingCompressorsRodPacking

14.4

181.7

0.3

4%

51%

GasWellCompletionswithHydraulic
Fracturing

13.1

194.8

0.3

4%

55%

OilWelltanks

12.6

207.4

0.2

4%

59%

Regulators

9.4

216.7

0.2

3%

61%

KimrayPumps

8.8

225.5

0.2

2%

64%

StationVenting

8.4

233.9

0.2

2%

66%

LiquidsUnloading(withoutplungerlifts)

8.0

241.9

0.2

2%

69%

StationFugitives

7.9

249.8

0.2

2%

71%

MainsCastIron

7.7

257.5

0.1

2%

73%

IntermittentBleedPneumaticDevices
DumpValves

7.4

264.9

0.1

2%

75%

MainsUnprotectedsteel

6.7

271.6

0.1

2%

77%

CondensateTankswithoutControl
Devices

6.6

278.2

0.1

2%

79%

ServicesUnprotectedsteel

6.4

284.6

0.1

2%

81%

MainsPlastic

6.3

290.9

0.1

2%

82%

LiquidsUnloading(withplungerlifts)

6.2

297.1

0.1

2%

84%

ChemicalInjectionPumps

5.7

302.8

0.1

2%

86%

ResidentialMeters

4.9

307.7

0.1

1%

87%

Pipelineventing

4.4

312.1

0.1

1%

88%

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ApproachandMethodology

Figure212012OnshoreEmissions(Bcf)fromEPAInventory

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2.3. SelectedMitigationTechnologies
Thefollowingsectionsdescribethemitigationmeasuresincludedinthisanalysistoaddressthehigh
emittingsourcecategoriesidentifiedinTable21.Thesmallersourcesindividuallywerejudgedtohave
aninsignificanteffectontheoverallemissionsanalysisevenifcosteffectivemitigationtechnologies
wereavailable.Muchofthecostandperformancedataforthetechnologiesisbasedoninformation
fromtheEPANaturalGasSTARprogram7butwasupdatedandaugmentedwithinformationprovidedby
industryandequipmentvendorsourcesconsultedduringtheEDFstudy.Furtherupdatesand
informationwereprovidedbyONEFuturemembersforthisstudy.
Thisanalysisattemptstodefinereasonableestimatesofaveragecostandperformancebasedonthe
availabledataandexperiencesofoperators,includingONEFuturemembers.Thecostsandperformance
ofanactualindividualprojectmaynotbedirectlycomparabletotheaveragesemployedinthisanalysis
becauseimplementationcostsandtechnologyeffectivenessarehighlysitespecific.Sometechnologies,
liketheefficiencyofplungerliftsforliquidsunloadingtoreduceemissions,dependontheoperating
conditionsofthewell.Further,certainlowproductionorlowerutilizedcompressorstationsmayhave
loweremissions.Costsforspecificactualfacilitiescouldbehigherorlowerthantheaveragesusedin
thisanalysis.
SeveralofthesourcesidentifiedinTable21donothavecommerciallyavailablemitigationtechnologies
(e.g.,engineexhaust)orarenotcurrentlycosteffective(e.g.castironmainreplacement).ICFanalyzed
variousmitigationoptionsforeachofthe24sourcesbasedoncost,reductionpotentialandmarket
penetrationandconsidered16sourcesandmitigationmeasuresforfurthermodelingandevaluation.
Table22summarizesthemitigationmeasuresappliedintheanalysisforeachofthe16majoremission
sources.
Table22SummaryofMitigationMeasuresModeled

Source

MitigationMeasure

CondensateTanksw/oControlDevices

Installvaporrecoveryunits

WellheadOilTanksw/oControlDevices

Installvaporrecoveryunits

LiquidsUnloadingWellsw/oPlungerLifts

Installplungerliftsystemsingaswells

HighBleedPneumaticDevices

Earlyreplacementofhighbleeddeviceswithlowbleed
devices
Replacewithinstrument air systemsintermittent

IntermittentBleedPneumaticDevices
ChemicalInjectionPumps
KimrayPumps

ReplacepneumaticchemicalinjectionpumpswithSolar
electricpumps
ReplaceKimraypumpswithelectricpumps

http://www.epa.gov/gasstar/

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Source

MitigationMeasure

PipelineVenting

Pipelinepumpdown beforemaintenance

CentrifugalCompressors(wetseals)

Wetsealgascapture ordryseals

TransmissionStationVenting

RedesignblowdownsystemsandalterESDpractice

GasWellCompletionswithFracturing

Installflares portable

ReciprocatingCompressorRodPacking

Replacement ofcompressorrodpackingsystems

ReciprocatingCompressorFugitives8

Leakdetectionandrepair(LDAR)9

CompressorStationFugitives10

Leakdetectionandrepair(LDAR)

WellFugitives

Leakdetectionandrepair(LDAR)

GatheringStationFugitives

Leakdetectionandrepair(LDAR)

Includesblowdownandunitisolationvalves,connectors,othervalves,meters,openendedlines,andPRVsthatare
associatedwiththecompressors.
9
LDARhereisusedgenericallytomeanawiderangeofleakdetection,inspection,andrepairactivities.
10
Includesvalves,connectors,meters,openendedlines,andpressurereducingvalves(PRVs)thatarelocatedthroughoutthe
stationandnotassociatedwiththecompressors.

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Table23summarizesthekeycharacteristics(i.e.capitalcosts,operatingcostsandreductionefficiency)
ofthe16measuresmodeled.(TheassumptionsandanalyticalapproachforLDARareaddressedfurther
below.)ThecostsareforU.S.GulfCoastandareadjustedbyregionalcostfactorsintheMACcurve
analysisinSection3.ThesourcesandderivationofthesevaluesarelistedinAppendixB.Table24
showsthebaselinecosteffectiveness($/Mcf,tonnes,orCO2eofmethaneremoved)foreachmeasure
modeledwithandwithoutcreditforanyrecoveredgas.Thecreditapplieswhereemissionreduction
measuresresultingasbeingrecoveredbythecompany.Intheproductionsegment,gasthatis
recoveredcanbesoldandthereforehasaneconomicvalue.Inthatcase,thevalueofrecoveredgasis
subtractedfromtheannualoperatingcosts.
Inthetransmissionanddistributionsegments,rateregulationtypicallyrequirespipelineanddistribution
companiestopassanycostreductions,includingreducedlosses,alongtocustomers,thusthe
companiestypicallycannotcapturethefinancialbenefitofrecoveredgas.Thecontractualprovisionsfor
gathering,processing,andstoragearevariablebuttheONEFuturemembersreportedthatthese
companiestypicallydonottakeownershipofthegasbutratherarepaidafeefortheirservice.Reduced
lossescouldresultinincreasedthroughputandincreasedrecoveryofthefee(whichismuchlessthan
thevalueofthegasitself)butonlyifthemeteringpointisdownstreamofthepotentialgasrecovery.

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Table23SummaryofMitigationMeasureCharacteristics(GulfCoastCostBasis)

Capital Operating Percent


Cost
Cost
Reduction

Mitigationstrategy
Earlyreplacementofhighbleeddeviceswithlowbleed
devices

$3,000

$0

78%

ReplacementofReciprocatingCompressorRodPacking
Systems

$6,600

$0

31%

InstallFlaresPortable

$30,000

$6,000

98%

InstallPlungerLiftSystemsinGasWells

$20,000

$2,400

95%

InstallVaporRecoveryUnits

$50,636

$9,166

95%

$5,000

$75

100%

$10,000

$2,000

100%

$0

$30,155

80%

RedesignBlowdownSystemsandAlterESDPractices

$15,000

$0

95%

WetSealDegassingRecoverySystemforCentrifugal
Compressors

$70,000

$0

95%

ReplacewithInstrumentAirSystems Intermittent

$60,000

$17,770

100%

ReplacePneumaticChemicalInjectionPumpswithSolar
ElectricPumps
ReplaceKimrayPumpswithElectricPumps
PipelinePumpDownBeforeMaintenance

Themembersalsoreportedthatthemeteringformostofthesefacilitiesisattheentrypointofthe
facility,thuspreventingtheoperatorfromcapturingthevalueofrecoveredgas.Basedonthis
information,thevalueofrecoveredgaswasincludedonlyfortheproductionsectorinthisstudy.Thisis
achangefromthe2014EDFstudy.Thegaspricewasassumedtobe$3/Mcf11,reducedby25%to
accountforroyaltiesandfees,foranetvalueof$2.25/Mcf12.

11
12

EIAShortTermEnergyOutlook,March9,2016,HenryHubspotpricesareforecasttoaverage$3.11/MMBtuin2017.
AfuelpricesensitivityanalysisisincludedinAppendixA.

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Table24CalculatedEmissionReductionCostperMitigationTechnologyorPractice(GulfCoastCostBasis)

$/Mcf*
$/Mcf
w/Credit w/oCredit

Name

$/tonne
CH4
w/Credit

$/tonne
CH4w/o
Credit

$/tonne
CO2e**
w/Credit

$/tonne
CO2ew/o
Credit

Earlyreplacementofhighbleeddeviceswithlowbleeddevices

$4.91

$7.61

$257.01

$398.49

$10.28

$15.94

ReplacementofReciprocatingCompressorRodPackingSystems

$3.36

$6.06

$175.90

$317.39

$7.04

$12.70

InstallFlaresPortable

$0.20

$0.20

$10.37

$10.37

$0.41

$0.41

InstallPlungerLiftSystemsinGasWells

$2.33

$5.03

$121.81

$263.30

$4.87

$10.53

$0.82

$1.89

$42.72

$98.76

$1.71

$3.95

$2.16

$4.86

$112.90

$254.38

$4.52

$10.18

ReplaceKimrayPumpswithElectricPumps

$1.79

$0.91

$93.98

$47.50

$3.76

$1.90

PipelinePumpDownBeforeMaintenance

$1.14

$3.84

$59.70

$201.19

$2.39

$8.05

RedesignBlowdownSystemsandAlterESDPractices

$4.10

$0.98

$214.62

$51.27

$8.58

$2.05

WetSealDegassingRecoverySystemforCentrifugalCompressors

$2.38

$0.32

$124.57

$16.91

$4.98

$0.68

ReplacewithInstrumentAirSystems Intermittent

$1.46

$1.24

$76.49

$65.00

$3.06

$2.60

InstallVaporRecoveryUnits
ReplacePneumaticChemicalInjectionPumpswithSolarElectric
Pumps

*GasrecoverycreditisappliedonlyfortheProductionSegment
**GWP=25

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Theannualcostwascalculatedastheannualamortizedcapitalcostovertheequipmentlifeplusannual
operatingcosts.Thiswasdividedbyannualmethanereductionstocalculatethecosteffectiveness
withoutcreditforrecoveredgas.Wheregascanberecoveredandmonetizedbytheoperating
company,thevalueofthatgaswassubtractedfromtheannualcosttocalculatethecosteffectiveness
withcreditforrecoveredgas.Thecostsshownherearethebaselinecosts,whichareadjustedfor
regionalcostvariationinthelaterMACanalysis.Asnotedearlier,theseareaveragecoststhatmaynot
reflectsitespecificconditionsatindividualfacilities.
Fugitiveemissionsaretheunplannedlossofmethanefrompipes,valves,flanges,andothertypesof
equipment.Fugitiveemissionsfromreciprocatingcompressors,compressorstations(transmission,
storage,andgathering),wells,andLDCmeteringandregulatorequipmentarethelargestcombined
emissioncategory,accountingforover30%ofthehighlightedsources.Thepotentialsizeandnatureof
thesefugitiveemissionscanvarywidelybyindustrysegmentandevenbysite.
LeakDetectionandRepair(LDAR)isthegenerictermfortheprocessoflocatingandrepairingthese
fugitiveleaks.Thereareavarietyoftechniquesandtypesofequipmentthatcanbeusedtolocateand
quantifythesefugitiveemissions.TheanalysisofLDARcostandeffectivenessforthisstudyisalittle
differentfromthetreatmentofothermeasuresbecauseitislargelyafunctionoflaborrequiredfor
inspectionsandrepairs.
ExtensiveworkhasbeendonebyEPAandotherstodocumentanddescribethesetechniques,bothin
theGasSTARreferencematerialsandinseveralregulatoryanalyses,includingfortheEPAsNSPS
SubpartOOOO13andtheColoradoAirQualityControlCommissionRegulationNumber7(5CCR1001
9)14.ThisstudyusedboththeColoradoregulatoryanalysisandtheEPATechnicalSupportDocument
(TSD)15forNSPSSubpartOOOOasthebasisfortheanalyticalframework.Additionalcostinformation
wasprovidedbyONEFuturemembers.
Thekeyfactorsintheanalysisarehowmuchtimeittakesaninspectortosurveyeachfacility,howmany
inspectionsarerequiredeachyear,howmuchreductioncanbeachieved,andhowmuchtimeis
requiredforrepairs.ICFadaptedthestructure(butnotallofthespecificinputs)oftheColorado
analysis,whichcalculatesthecapitalandlaborcosttofieldafulltimeinspector,includingallowances
fortravelandrecordkeeping(Table25).Specificcostfactorswereupdatedbasedoninputfromthe
ONEFuturemembercompanies.Thecombinedhourlycostwasthebasisforthecostestimates.The
capitalcostincludesavarietyofleakdetectionandmeasurementequipment,atruckandthecostofa
recordkeepingsystem.Theseareestimatedaveragecostsandarehighlyvariabledependingonsite

13

http://www.epa.gov/airquality/oilandgas/
http://www.colorado.gov/cs/Satellite/CDPHEAQCC/CBON/1251647985820
15
U.S.EPA,OilandNaturalGasSector:StandardsofPerformanceforCrudeOilandNaturalGasProduction,Transmission,and
Distribution.BackgroundSupplementalTechnicalSupportDocumentfortheFinalNewSourcePerformanceStandards.
http://www.epa.gov/airquality/oilandgas/pdfs/20120418tsd.pdf
14

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specificconditionsandscale.Inaddition,theGatheringandBoostingsegmentisincludedinthe
ProductionsegmentintheseanalysisduetothedesignoftheEPAinventory.
Table25LDARHourlyCostCalculation

Labor

CapitalandInitialCosts

InspectionStaff

$86,155

FLIRThermalCamera

Supervision(@20%)

$17,231

RemoteMethaneLeak
Detector(RMLD)

Overhead(@10%)
Travel(@0%)
Recordkeeping(@5%)

PhotoIonizationDetector

$5,000

$0

FlameIonizationDetector

$12,000

HiFlowSampler

$21,450

$0

Fringe(@50%)

$43,078

SubtotalCosts

$159,387

Hours/yr.

1880

$84.78

TrainingHours
TrainingDollars

Miscellaneous

$22,000

Monitoringsystem

$14,500

Total

$220,150

TrainingDollars

Amortized
Capital+Training

$6,782

$59,864

AnnualLabor

$207,203

80

AnnualTotal

$267,067

$6,782

$3,000

Truck

HourlyRate

$20,000

$8,616
$4,308

Reporting(@0%)

$122,200

TotalHourlyRate

$142.06

Manyanalyseshaveusedfacilitycomponentcountsandhistoricaldataonthetimerequiredtoinspect
eachcomponenttoestimatefacilitysurveytimes.However,theuseoftheinfraredcameratechnology
allowsmuchshortersurveytimes16andtheEPAandColoradotimeestimateshavebeencriticizedastoo
long.TheestimatesherearebasedonICFandONEFuturecompanyexperience.ICFaddedadditional
timefortrainingrelativetotheColoradoanalysis.
ICFthenadoptedthebaselineemissionvaluesforwells,gatheringandtransmissionstations,and
processingstationsfromtheEPANSPSanalysis15.The2014EDFanalysishadverylimiteddataforLDC

16

Robinson,D,et.al.,RefineryEvaluationofOpticalImagingtoLocateFugitiveEmissions.JournaloftheAir&Waste
ManagementAssociation.Volume57June2007.

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programsandresultedinveryhighreductioncosts.SinceadifferentapproachwastakenfortheLDC
segmentinthisanalysis(seebelow)LDCswerenotincludedhere.
Table26summarizestheassumptionsfortheoverallLDARcalculation.Thisanalysisassumesannual
emissionsurveysforallfacilities.Thereductionisassumedtobea40%reduction,consistentwiththe
experienceofONEFuturemembers.Inadditiontothesurveys,theestimateincludesoneinitialvisitto
eachsitetoinventorytheequipment(equivalenthourstotwoinspectionvisitsforeachsitewithcost
averagedoverfiveyears)andadditionalvisitsforrepairs.Gasprocessingplantsarealreadysubjectto
someLDARrequirementsforconventionalpollutants,whichresultincobenefitmethanereductions.
Themiscellaneousfugitiveemissionsforgasprocessingwerebelowthesizethresholdforthisanalysis
butthecostsdevelopedhereforgasprocessingareappliedtocompressorsinthatsegment.
Table26CostCalculationAnnualLDAR

WellPads Processing

15

3,057 5,986

MethaneMcf/yr

Transmission
3,605

40%

40%

40%

1,223

2,394

1,442

5.5

40

32

AnnualInspectionCost

$781

$5,682

$4,546

InitialSetUp

$156

$1,136

$909

RepairLaborCost

$781

$5,682

$4,546

$1,719

$12,501

$10,001

$3,303

NA

NA

$1,584

$12,501

$10,001

$1.30

$5.22

$6.94

%Reduction
ReductionMcf
HourseachInspection(includessurvey,
travel,recordkeeping,reviewand
training)
Frequency(peryear)

TotalCost/yr

RecoveredGasValue*
NetCost
CostEffectiveness($/McfCH4reduced)

*Gasat$3/Mcfminusroyalty=$2.25/Mcf

Somerepairscanbemadeatthetimeofthesurvey,suchastighteningvalvepackingorflanges,but
otherswillrequireadditionalrepairtime.Thisanalysisassumesrepairtimeequivalenttoonesurvey
visitforeachfacilityforrepairseachyear.Thecapitalcostoflargerrepairsisnotincludedonthe
assumptionthattheserepairswouldneedtobemadeanywayandtheLDARprogramissimplyalerting
theoperatortotheneed.Thislowerrepairestimatetakesintoaccountthat:

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Theseareaveragevaluesacrossfacilitiesnoteveryfacilitywillrequirerepairs.

Theseareaveragevaluesovertimenoteveryfacilitywillneedrepairseveryyearwhilebeing
monitoredonacontinuingbasis.

Someorallofcostofmajorrepairsisassumedtobepartofregularfacilitymaintenance.

Replacementcostsforlargediameter,highpressurecomponentsaresignificantlygreaterthanthese
averageannualrepaircosts.Thereplacementfrequencyforlargediameter,highpressurecomponents
atanyindividualfacilitycannotbeaccuratelypredictedorestimated.
Thevalueofreducedgaslossesiscreditedtotheprogramforproductiononly.Thesefinalreduction
costvalueswereusedfortheanalysis.

2.4. TreatmentofLDCReductions
The2014EDFstudyfoundthatmethaneemissionreductionsfromLDCswereextremelyexpensive,
mostlyduetothelowbaselineemissionsandthehighcapitalcostofsomeoptions,suchascastiron
pipereplacement.Castironmainshavebeenidentifiedisasignificantemissionsource,howeverthey
areprimarilylocatedincongestedurbanareaswherereplacementorrepairisveryexpensive,reported
as$1millionto$3millionpermile.Thismakesforaveryexpensivecontroloptionbasedpurelyon
emissionreduction.Moreover,theseexpendituresmustbeapprovedbystateutilitycommissions,
whosepurviewtypicallydoesnotextendtoenvironmentalremediationofthistype.Thatsaid,
approximately3%ofcastironmainsarebeingreplacedeachyearforsafetyreasons,sotheemissions
aregraduallydeclining.
Forthisstudy,aseparateanalysisofemissionreductionswasdevelopedfortheLDCsegmenttoaccount
forreductionsthatwillbeundertakeneventhoughtheymaynotbecosteffectiveasemissioncontrol
measuresalone.Theanalysisassumedthreetypesofactivities:

Castironmainreplacementat3%peryear

Unprotectedsteelpipereplacementat3%peryear

Miscellaneousotheremissionreductionmeasuressuchas:servicelinereplacement,blowdowngas
recovery,hottapping,M&RStationupgrades,anddiginmitigations,assumedtobe6%ofthe
remainingemissions(excludingcastironandunprotectedsteelmains)between2012and2025.

UsingthebaselineemissionsandtheemissionfactorsfromtheEPA2012inventory,theseemission
reductionswerecalculatedas:

Castironmainreplacement2.9Bcf

Unprotectedsteelpipereplacement2.5Bcf

Miscellaneousotheremissionreductionmeasures3.5Bcf

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2.5. CompletionEmissionsfromHydraulicFracturing
Gaswellcompletionemissionsfromhydraulicfracturingwereestimatedat13.1Bcfinthe2012
inventory.Theseemissionswereregulatedduringthesecondhalfof2012andareassumedtobe
controlledgoingforward.ThereforetheyarenotincludedintheMACanalysisbutarecountedasa
reductionof12.3Bcfintheoverallreductionsfromthebaseyear.

2.6. SourceCategoriesNotAddressed
Severalsourcecategorieswithrelativelylargeemissionswerenotaddressedintheanalysis.Thesources
andthereasonsfortheirtreatmentaresummarizedbelow.

OffshoreoilandgasproductionAsnotedearlier,theEPAinventoryprovidesverylimiteddataon
offshoreemissions,whichwerenotadequatetoapplythemethodologyusedforothersources.This
isanareainwhichfurtheranalysiswouldprobablyyieldadditionalopportunitiesforreduction.

EngineexhaustTheexhaustfromgasburningenginesandturbinescontainsasmallamountof
unburnedmethanefromincompletecombustionofthefuel.Whileitisasmallpercentage,itis
significantinaggregate.Oxidationcatalystdevicesareusedtoreduceunburnedemissionsofother
hydrocarbonsintheexhaustbuttheyarenoteffectiveatreducingemissionsofmethaneduetoits
lowerreactivity.However,newcatalystsarebeingdeveloped,inpartfornaturalgasvehicles,which
maybeapplicabletothesesources.Thisisatopicforfurtherresearchandtechnologydeployment.

OthersourcesThereareadditionalcosteffectivemeasuresformethanereductionthathavebeen
identifiedbytheEPAGasSTARprogramandothers.Theyarenotincludedherebecausethisreport
focusesonlyonthelargestemittingsources.However,theiromissionshouldnotbetakento
indicatethatthemeasureslistedherearetheonlycosteffectivemethanereductionmeasures.

GatheringandBoostingThegatheringandboostingsegmentisnotcalledoutasaseparate
segmentinthe2014editionoftheEPAinventoryfor2012andthereforewasnotaddressedasa
separatesourceofpotentialreductionsinthisstudy.The2016editionhasdevelopednewemission
factorsandsignificantlyincreasedtheactivitycountsinthegatheringsegment,howeverthese
higheremissionsandpotentialreductionswerenotincludedinthisanalysis,whichwascompleted
priortothatrelease.SincetheGHGRPnowmandatesreportingofemissionsdatafromsuch
facilities,andwiththedatatobegatheredbyEPApursuanttotheICRprocess,weexpectfurther
updatesinfutureGHGIreleases.Further,severalkeygovernmentsponsoredstudiesofemissions
fromgatheringandboostingfacilitieswillbepublishedbytheendof2016.Allofthisdatawill
supportfutureupdatestothemethaneemissionsprofilefromthissegmentandavailable
abatementpotential.

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3. AnalyticalResults
3.1. DevelopmentofEmissionControlCostCurves
Section2identified16discretecontroltechnologiesandtheassociatedcosts,reductionpotential,and
costeffectivenessintermsofannualizedcostpertonorMcfofmethanereducedbasedonGulfCoast
regioncapitalcosts.InthisSection3,wemodelthecumulativereductionsandmarginalabatement
costsfroma2012U.S.methaneemissionsbaselinefortheoilandnaturalgassector,employingthe
technologyleveldatageneratedinSection2.EmployingdatafromtheEPA2012GreenhouseGas
Inventoryandsource/controltechnologydatapresentedinSection2,adjustedforregionalcost
differences,ICFcomputedthemethaneabatementpotentialfromthenaturalgassectorfroma2012
baseline.
Themodeldevelopedforthistaskincludestheindividualsourcecategoriesforeachsegmentoftheoil
andgasindustry.Mitigationtechnologiesarematchedtoeachsourceorindividualmeasureinvarious
segmentsoftheoilandgasvaluechain.Themodelcalculatesthereductionachievedforeachsource
withineachsegmentandcalculatesthecostofcontrolbasedonthecapitalandoperatingcosts,the
equipmentlife,andwhereappropriate,thevalueofrecoveredgas.Keyglobalinputassumptions
include:whetheraparticularsegmentisabletomonetizethevalueofrecoveredgas,thevalueofgas,
andthediscountrate/costofcapital.Asdiscussedabove,thevalueofrecoveredgaswasincludedonly
fortheproductionsegmentandthegaspricewasassumedtobe$3/Mcfminus25%forroyaltiesand
fees,foranetvalueof$2.25/Mcf.A10%discountratewasusedfortheanalysis.Thesecalculations
includetwofactorsthatwerenotincludedinthebaselinecostspresentedinSection2:

Aconstructioncostindexisusedtoaccountforregionalcostdifferences,whichaverages15%
higherthanthebaselineGulfCoastcosts.

Themethanecontentisadjusteddependingonwhethertheapplicationisupstreamordownstream
inthevaluechain.Thisadjustmentaffectsthevalueofrecoveredgaswherethegasvaluecanbe
monetized.

ThesetwofactorsresultinsomeofthecostsintheMACcurveresultspresentedinthischapterbeing
higherthanthebaselinecostspresentedinSection2.Theseandotherkeyassumptionsarelistedin
AppendixA.
Table31liststheemissionreductionmeasuresbyindustrysegmentwiththeirreductionandcost,
depictedinseveralformats.Thetotalreductionis88.3Bcf/yearofmethanefromtheU.S.oilandgas
segmentatatotalannualizedcostof$296millionor$3.35/Mcfofmethanereducedfromthe2012
baseline.ThereductionsfortheLDCsegmentcalculatedseparatelytotal8.9Bcfandthereductionsfrom
reducedemissionwellcompletionsresultinatotalreductionof109.5Bcfofmethanereduction.

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Table31AnnualizedMethaneReductionandCostU.S.

SegmentMitigationOption
GasProcessingLDARProcessing
GasProcessingReplaceKimrayPumpswith
ElectricPumps
GasProcessingReplacementofReciprocating
CompressorRodPackingSystems
GasProcessingWetSealDegassingRecovery
SystemforCentrifugalCompressors
GasProductionEarlyreplacementofhigh
bleeddeviceswithlowbleeddevices
GasProductionInstallPlungerLiftSystemsin
GasWells
GasProductionInstallVaporRecoveryUnits
GasProductionLDARWells
GasProductionReplaceKimrayPumpswith
ElectricPumps
GasProductionReplacePneumaticChemical
InjectionPumpswithSolarElectricPumps
GasProductionReplacementofReciprocating
CompressorRodPackingSystems
GasStorageEarlyreplacementofhighbleed
deviceswithlowbleeddevices
GasStorageLDARTransmission
GasStorageLDARWells
GasStorageRedesignBlowdownSystemsand
AlterESDPractices
GasStorageReplacewithInstrumentAir
SystemsIntermittent
GasStorageReplacementofReciprocating
CompressorRodPackingSystems

ICFInternational

BcfCH4
Reduced
7.4

GgCH4
Reduced
141.8

MMTonnes
CO2e
3.6

$/McfCH4
Reduced
$5.98

$/McfNatural
GasReduced
$4.98

$/Tonne
CO2e
$12.43

0.1

2.5

0.1

$1.04

$0.87

$2.16

0.3

6.0

0.2

$6.94

$5.78

$14.42

7.5

144.7

3.6

$0.37

$0.31

$0.77

5.3

101.9

2.6

$6.02

$5.23

$12.50

2.3
1.6
3.3

43.9
30.1
64.2

1.1
0.8
1.6

$3.06
($0.54)
($1.09)

$2.66
($0.47)
($0.95)

$6.35
($1.12)
($2.26)

4.3

81.8

2.1

($1.66)

($1.45)

($3.45)

2.7

51.4

1.3

$2.86

$2.49

$5.95

0.6

11.2

0.3

$4.24

$3.69

$8.81

0.1
2.9
0.2

1.8
56.2
4.4

0.0
1.4
0.1

$8.72
$7.95
$1.61

$8.14
$7.42
$1.50

$18.11
$16.51
$3.35

1.2

23.4

0.6

$1.12

$1.05

$2.33

0.1

2.2

0.1

$1.42

$1.33

$2.95

0.4

6.9

0.2

$6.94

$6.49

$14.42

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SegmentMitigationOption

BcfCH4
Reduced

GasStorageWetSealDegassingRecovery
SystemforCentrifugalCompressors
GasTransmissionEarlyreplacementofhigh
bleeddeviceswithlowbleeddevices
GasTransmissionLDARTransmission
GasTransmissionPipelinePumpDownBefore
Maintenance
GasTransmissionRedesignBlowdown
SystemsandAlterESDPractices
GasTransmissionReplacewithInstrumentAir
SystemsIntermittent
GasTransmissionReplacementof
ReciprocatingCompressorRodPacking
Systems
GasTransmissionWetSealDegassing
RecoverySystemforCentrifugalCompressors
OilProductionEarlyreplacementofhigh
bleeddeviceswithlowbleeddevices
OilProductionInstallVaporRecoveryUnits
OilProductionLDARWells
OilProductionReplacePneumaticChemical
InjectionPumpswithSolarElectricPumps
OilProductionReplacewithInstrumentAir
SystemsIntermittent
Total
GasProductionReducedEmission
Completions
GasDistributionCastIronMainReplacement
GasDistributionBareSteelReplacement
GasDistributionMiscellaneous
GrandTotal

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GgCH4
Reduced

MMTonnes
CO2e

$/McfCH4
Reduced

$/McfNatural
GasReduced

$/Tonne
CO2e

0.8

14.5

0.4

$0.37

$0.35

$0.77

0.5
14.0

9.5
268.5

0.2
6.7

$8.72
$7.95

$8.14
$7.42

$18.11
$16.51

2.8

53.9

1.4

$4.40

$4.11

$9.14

6.4

122.5

3.1

$1.12

$1.05

$2.33

0.6

11.2

0.3

$1.42

$1.33

$2.95

1.8

35.4

0.9

$6.94

$6.49

$14.42

7.4

141.6

3.6

$0.37

$0.35

$0.77

4.6
6.0
0.0

88.5
114.7
0.3

2.2
2.9
0.0

$6.02
($0.54)
($1.09)

$5.01
($0.45)
($0.91)

$12.50
($1.12)
($2.26)

1.9

36.1

0.9

$2.86

$0.00

$5.95

1.1
88.3

20.6
1,699.8

0.5
0.9

($1.28)

$0.00

($2.66)

12.3
2.9
2.5
3.5
109.5

236.4
55.6
47.9
67.1
2,106.8

5.9
1.4
1.2
1.7
11.1

N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A

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TheresultscanalsobepresentedasaMarginalAbatementCostCurve(MACcurve),showninError!Not
avalidbookmarkselfreference..Thisrepresentationshowstheemissionreductionssortedfromlowest
tohighestcostofreductionandshowstheamountofemissionreductionavailableateachcostlevel.
Theverticalaxisshowsthecostperunitin$/Mcfofmethanereduced.Anegativecostofreduction
indicatesthatthemeasurehasapositivefinancialreturn,i.e.savesmoneyfortheoperator.The
horizontalwidthofthebarsshowstheamountofreduction.Theareawithinthebarsisthetotalcost
peryear.Theareabelowthehorizontalaxisrepresentssavingsandtheareaabovetheaxisrepresents
cost.Thenetsumofthetwoisthetotalnetcostperyear.
Figure31ExampleMACCurve

Figure32showsthereductionforeachmeasureacrossallindustrysegmentsintheMACcurveformat.
Figure33showsthereductioninmethaneemissionsbyindustrysegment.Thetransmissionand
productionsectorshavethegreatestreductions.Thecostsforeachsectordependontheparticular
mitigationoptionsavailableineachandtheiraggregatecost.

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Figure32NationalAggregateMACCurvebyMeasure

Figure33NationalAggregateMACCurvebyIndustrySegment

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AppendixA.
SummaryandComparisonofAssumptionsandResults
Thissectionsummarizesandcomparesthekeyassumptionsandresultsforthisstudyandthe2014EDF
study.Theassumptionsforeachstudywerelargelyspecifiedbytheclientsforeach.TableA1
summarizessomeofthekeyassumptionsandresults.Theprimarydifferenceintotalreductionvolume
isthelowerreductionfromlessfrequentLDARandthesmallerbaselineinthecurrentstudyduetoa
differentbaseyearandexclusionofthedistributionsegment.

TableA1SummaryofBaselineAssumptionsandMACCurveResults

InventoryBaseline

ONEFuture2016
EPAInventory2012353Bcf
methane

NaturalGasPrice

$2.25/Mcf($3/Mcf25%
royaltyandfeepayments)
Annual40%

LDARFrequencyand
reduction
GasValueCreditfor
Reductions
NetAnnualizedCost
Annualreduction
Averagecostofreduction

Productionsegmentonly
$296million
88.3Bcfmethane
$3.35/Mcfmethanereduced

EDF2014
EPAInventory2011modifiedand
projectedto2018404Bcf
methane
$4/Mcf
Quarterly60%
Allexcepttransmissionand
distribution
$108million
163Bcfmethane
$0.66/Mcfmethanereduced

Theprimarydriversofthedifferenceintheaveragecostofreductionbetweenthetwostudiesarethe
differentgaspriceandtheassumptionsonwhichsectorscanmonetizethevalueofrecoveredgas.Table
A2providesasensitivityanalysisofthegaspriceeffectontheannualizedcostofreductionperMcf.
TableA2CostperMcfofMethaneReducedGasPriceSensitivity

GasPrice
$2.25/Mcf
$3.00/Mcf
$4.00/Mcf
$5.00/Mcf

ONEFuture2016
$3.35
$3.01
$2.55

EDF2014

$1.48
$0.66
$0.15

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TableA3MitigationTechnologyCharacteristicsONEFuture2016

Mitigationstrategy

Capital Operating Percent


Cost
Cost
Reduction

Earlyreplacementofhighbleeddeviceswithlowbleed
devices

$3,000

$0

78%

ReplacementofReciprocatingCompressorRodPacking
Systems

$6,600

$0

31%

$7.61

$3.36

$6.06

$30,000

$6,000

98%

$0.20

$0.20

InstallPlungerLiftSystemsinGasWells

$20,000

$2,400

95%

$2.33

$5.03

InstallVaporRecoveryUnits

$50,636

$9,166

95%

$0.82

$1.89

$5,000

$75

100%
$2.16

$4.86

ReplaceKimrayPumpswithElectricPumps

$10,000

$2,000

100%

$1.79

$0.91

$0

$30,155

80%

$1.14

$3.84

RedesignBlowdownSystemsandAlterESDPractices

$15,000

$0

95%

$4.10

$0.98

WetSealDegassingRecoverySystemforCentrifugal
Compressors

$70,000

$0

95%
$2.38

$0.32

ReplacewithInstrumentAirSystems Intermittent

$60,000

$1.46

$1.24

PipelinePumpDownBeforeMaintenance

$17,770

100%

ICFInternational

$4.91

InstallFlaresPortable

ReplacePneumaticChemicalInjectionPumpswithSolar
ElectricPumps

$/Mcf*
$/Mcf
w/Credit w/oCredit

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TableA4MitigationTechnologyCharacteristicsEDF2014

Name

CapitalCost

Operating
Cost

Percent
Reduction

$/Mcf
w/Credit

$/Mcf
w/oCredit

Earlyreplacementofhighbleeddeviceswithlowbleeddevices

$3,000

$0

97%

$3.08

$1.99

Earlyreplacementofintermittentbleeddeviceswithlowbleeddevices

$3,000

$0

91%

$0.58

$5.65

ReplacementofReciprocatingCompressorRodPackingSystems

$6,000

$0

35%

$1.82

$6.89

InstallFlaresCompletion

$50,000

$6,000

98%

N/A

$1.86

InstallFlaresVenting

$50,000

$6,000

98%

N/A

$0.26

LiquidUnloadingInstallPlungerLiftSystemsinGasWells

$20,000

$2,400

95%

$0.05

$5.03

$100,000

$7,500

95%

$0.51

$4.57

$15,000

$0

95%

$4.10

$0.98

$5,000

$75

100%

$0.22

$4.86

$10,000

$2,000

100%

$4.17

$0.91

$0

$12,000

80%

$4.67

$0.41

$50,000

$0

95%

$4.87

$0.21

LDARWells

$169,923

$146,250

60%

$2.52

$7.60

LDARGathering

$169,923

$146,250

60%

$0.91

$5.98

LDARLargeLDCFacilities

$169,923

$146,250

60%

$10.03

$14.45

LDARProcessing

$169,923

$146,250

60%

$0.98

$4.10

LDARTransmission

$169,923

$146,250

60%

$2.28

$2.15

InstallVaporRecoveryUnitsonTanks
TransmissionStationVentingRedesignBlowdownSystems/ESDPractices
ReplacePneumaticChemicalInjectionPumpswithSolarElectricPumps
ReplaceKimrayPumpswithElectricPumps
PipelineVentingPumpDownBeforeMaintenance
WetSealDegassingRecoverySystemforCentrifugalCompressors

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TableA5AnnualizedCostandReductionComparison

EDF2014

Source/Measure

Annualized BcfMethane
Cost
Reduced/yr
($million/yr)

ONEFuture2016
$/MCF
Methane
Reduced

Annualized
Cost
($million/yr)

BcfMethane
Reduced/yr

$/MCF
Methane
Reduced

ReplaceKimrayPumpswithElectricPumps

$23.4

5.8

$4.05

$7.0

4.4

$1.58

WetSealDegassingRecoverySystemforCentrifugal
Compressors

$58.7

19.1

$3.07

$5.8

15.7

$0.37

$4.5

1.5

$3.03

$67.4

25.4

$2.65

CompressorStations(Storage)LDAR
Earlyreplacementofhighbleeddeviceswithlow
bleeddevices
ReciprocatingCompressorFugitivesLDAR

IncludedinTransmission
$64.9

10.5

$6.17

IncludedinTransmission

$10.5

32.3

$0.33

CondensateTanksw/oControlDevicesVRU

$0.1

0.4

$0.21

StrandedGasVentingfromOilWellsFlares

$2.4

8.2

$0.30

NA

OilTanksVRU

$1.8

5.5

$0.33

IncludedwithCondensateTanks

PipelinePumpDownBeforeMaintenance

$2.3

4.2

$0.53

$12.4

2.8

$4.40

ReplacePneumaticChemicalInjectionPumpswith
SolarElectricPumps

$2.7

4.8

$0.57

$13.1

4.6

$2.86

InstallPlungerLiftSystemsinGasWells

$1.2

1.6

$0.74

$7.0

2.3

$3.06

RedesignBlowdownSystemsandAlterESDPractices

$7.5

5.9

$1.27

$8.5

7.6

$1.12

GatheringandBoostingStationsLDAR

$5.0

3.3

$1.51

IncludedinProduction

$20.9

12.1

$1.72

NA

IntermittentBleedPneumaticDevicesLowBleed
ReplacewithInstrumentAirSystemsIntermittent
OilWellCompletionswithFracturingFlares
CompressorStations(Transmission)LDAR
WellFugitivesLDAR

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$4.1

NA

7.6

$0.4

$0.54

1.8

$0.22

NA

$14.5

6.8

$2.13

$7.7

2.8

$2.79

$134.3

16.9

$7.95

$43.9

12.5

$3.51

$3.3

3.6

$0.92

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EconomicAnalysisofMethaneEmissionReductionPotentialfromNaturalGasSystems
AnalyticalResults

ReplacementofReciprocatingCompressorRodPacking
Systems

$22.3

3.6

$6.11

LDCMetersandRegulatorsLDAR

$140.6

7.1

$19.75

GrandTotal

$108.3

162.9

$0.66

$20.0

A5

$6.44

88.3

$3.35

NA
$295.9

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EconomicAnalysisofMethaneEmissionReductionPotentialfromNaturalGasSystems
AnalyticalResults

AppendixB.
DataSources
Thefollownotesexplainthesourcesandderivationofthecapitalcost(Capex),operatingcost(Opex),
andemissionreductionpotentialoftheemissionreductionoptionsassessedinthisstudy.Theprimary
sourcesareavarietyofEPAsourcesparticularlydatafromtheGasSTARprogram,theGreenhouseGas
Reporting,andsupportdocumentsfromNSPSOOOO,aswellasindustrycommentsreceivedduringthe
2014EDFstudy,andcommentsfromtheONEFuturesponsorsofthisstudy.Eachemissionreduction
optionisdiscussedbelow:

EarlyreplacementofhighbleeddeviceswithlowbleeddevicesCapex$3,000,Opex$0,
Reduction78%.TheCapexandOpexwerebasedonGasSTARdataupdatedbyindustryreviewin
bothstudies.ThereisnoincrementalOpexforpneumaticdevices.Thereductionestimatewas
basedontheperformanceofhighbleedandlowbleedpneumaticdevicesfoundintwofield
measurementstudiescompletedbytheUniversityofTexas17,18andsponsoredbyindustry
participantsandEDF.

ReplacementofReciprocatingCompressorRodPackingSystemsCapex$6,600,Opex$0,
Reduction31%.TheCapexwasbasedonGasSTARdataupdatedbyindustryinbothstudies.Thereis
noincrementalOpexforthismeasure.ThereductionestimatewasbasedonananalysisbyICFthat
calculatesthereductionsduetomorefrequentreplacementofrodpackingsealsrelativetoless
frequentreplacement.

InstallFlaresPortableCapex$30,000,Opex$6,000,Reduction98%.TheCapexandOpexwere
basedonindustryinputduringboththeEDFandONEFuturestudies.ThereductionisanEPAGas
STAR/inventoryassumptionof98%flarecombustionefficiency.Additionalinformationwasderived
fromGHGRPSubpartW.

InstallPlungerLiftSystemsinGasWellsCapex$20,000,Opex$2,400,Reduction95%.These
valueswerebasedonindustryinputduringbothstudies.Theydonotincludethevalueofincreased
production,whichistypicallytheprimarydriverforliquidsunloading.Thecostandeffectivenessof
plungerliftsarehighlyvariabledependingonthewellcharacteristics.Plungerliftscanbean
effectivemitigationmeasureforcertainwellsatcertaintimesovertheiroperatinglifebutmaynot

17

Allen,DavidT.etal.MeasurementsofMethaneEmissionsatNaturalGasProductionSitesintheUnitedStates.Proceedings
oftheNationalAcademyofSciencesoftheUnitedStatesofAmerica110.44(2013):1776817773.
18
MethaneEmissionsfromProcessEquipmentatNaturalGasProductionSitesintheUnitedStates:PneumaticControllers.
DavidT.Allenetal.EnvironmentalScience&Technology201549(1),633640.DOI:10.1021/es5040156.Availableonlineat:
http://pubs.acs.org/doi/abs/10.1021/es5040156

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AnalyticalResults

beeffectiveorfeasibleforotherwellsorevenforthesamewellatadifferentpointinitsoperating
life.ApplicabilityinformationwasderivedfromGHGRPsubpartW.

InstallVaporRecoveryUnitsCapex$50,636,Opex$9,166,Reduction95%.Thesevalueswere
basedonEPAGasSTARdata,independentICFanalysis,andupdatesfromvendorsandindustry
commentersinbothstudies.

ReplacePneumaticChemicalInjectionPumpswithSolarElectricPumpsCapex$5,000,Opex$75,
Reduction100%.ThesevalueswerebasedonEPAGasSTARdatawithupdatesfromvendorsand
industrycommentersinbothstudies.

ReplaceKimrayPumpswithElectricPumpsCapex$10,000,Opex$2,000,Reduction100%.These
valueswerebasedonEPAGasSTARdatawithupdatesfromvendorsandindustrycommentersin
bothstudies.

PipelinePumpDownBeforeMaintenanceCapex$0,Opex$30,155,Reduction80%.Thesevalues
werebasedonEPAGasSTARdatawithupdatesfromvendorsandindustrycommentersinboth
studies.TherequiredequipmentistypicallyleasedsothereisnoCapex.

RedesignBlowdownSystemsandAlterESDPracticesCapex$15,000,Opex$0,Reduction95%.
ThesevalueswerebasedonEPAGasSTARdatawithupdatesfromvendorsandindustry
commentersinbothstudies.

WetSealDegassingRecoverySystemforCentrifugalCompressorsCapex$70,000,Opex$0,
reduction95%.ThesevalueswerebasedonEPAGasSTARdatawithupdatesfromvendorsand
industrycommentersinbothstudies.

ReplacewithInstrumentAirSystemsIntermittentCapex$60,000,Opex$17,770,Reduction
100%.ThesevalueswerebasedonEPAGasSTARdatawithupdatesfromvendorsandindustry
commentersinbothstudies.

LDARCostsThestructureoftheLDARcostanalysisisdifferentfromtheothermeasures,as
discussedinthebodyofthereport.Thecostanalysisstructureisbasedontheregulatoryanalysis
fortheColoradomethanerulebutmostofthevalueshavebeenupdated.TheONEFuturesponsors
providedextensiveinputonthelaborandinstrumentationcosts.Thebaselinelaborcostswere
increasedandthenumberofmeasurementdeviceswasincreasedfromtheColoradoassumptions.
Thetimeallocatedforinspectionswasalsoincreasedrelativetothe2014EDFreportbasedoninput
fromthesponsors.ThebaselineemissionswerefromtheEPATechnicalSupportDocumentforNSPS
OOOO.

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