Understanding Methane’s Impact on Climate Change and Efforts to Reduce Its Emissions in California’s Oil and Gas Industry

Methane and Climate Change

Methane is a naturally occurring gas that results from decomposition of organic matter. Natural gas is methane that has been trapped over millions of years in geological formations and has been tapped by the oil and gas industry as an important source of energy. Combustion of methane for generating electricity, industrial and residential heating and transportation typically emits about half of the greenhouse gases of other fossil fuels burned for energy.

Methane is also a greenhouse gas (GHG) and is one of several gases that contribute to the “greenhouse effect” and climate change. Although carbon dioxide (CO2) emissions constitute the largest share of California’s inventory, nitrous oxide, and short-lived climate pollutants, such as methane, hydrofluorocarbons (HFCs), and black carbon, are also significant contributors to California’s greenhouse gas emission inventory. These GHG emissions are measured in “CO2-equivalents”, or CO2e.

Methane is an important greenhouse gas, which is globally responsible for 9% of global warming potential emissions (2000-2019 California Methane Inventory). According to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), methane has 28 times the climate impact of CO2 over a 100-year timespan, and 84 times the climate impact of CO2 over a 20-year timespan. Thus, a metric tonne (MT) of methane emissions is usually represented as 28MT CO2e, which reflects methane’s 28-times multiplier factor over the global warming effects of CO2. Methane emissions also continue to increase globally from many sectors and natural systems (such as warming tundra ecosystems or very large water reservoirs that fluctuate seasonally).

Oil and Gas operations globally account for about 1/7th of that 9% (2000-2019 California Methane Inventory). In California, oil and gas methane emissions represent less than 1% of total state GHG emissions (2000-2019 California Methane Inventory).

Upstream Methane Regulatory Policy

Upstream methane emissions are associated with the production and movement of oil and gas, from the drilling of a well to the transportation of product to the refinery. Many oil producing wells in California have associated natural gas mixed in with the crude oil, which is separated from the crude oil by processing in the field. Other wells, predominantly in the northern and central parts of California, are drilled specifically to produce natural gas, or “dry gas” from reservoirs thousands of feet beneath the earth’s surface.

California also regulates 12 underground “gas storage facilities,” which companies use to buy natural gas from other parts of the United States and the world and store underground in geological reservoirs to retrieve when needed for natural gas customers. These storage facilities often have upstream methane emissions associated with their operations and are carefully monitored for leaks.

WSPA Members work daily to minimize methane emissions by using advanced monitoring and control technologies. WSPA is engaged at the Federal, State, and regional levels to advance methane policy that aligns with the compelling need for global methane reduction.

On November 2, 2021, the U.S. Environmental Protection Agency (EPA) released a proposed rule to limit emissions of methane from oil and gas facilities. In July 2017, CARB adopted methane monitoring and control requirements for oil and gas production facilities under its California Oil and Gas Rule (COGR). And in December 2022, CARB initiated a COGR rule revision process that will modify Leak Detection and Repair (LDAR) requirements among other production processes.

California is working to reduce GHG emissions across all sectors of the economy under the framework of Assembly Bill 32 (2006) and Senate Bill 32 (2016).  In addition, California has established several other statewide mandates to reduce the emissions of greenhouse gases, including Executive Order S-3-05Senate Bill 605 (2014)Assembly Bill 1496 (2015), and Senate Bill 1383 (2016).

More specifically, WSPA is working with California’s regulatory agencies, including CARB, regional air districts, and CalGEM, to ensure compliance with existing laws and regulations, and to help craft technically sound and scientifically based regulations that help to reduce methane emissions across the oil and gas industry.

  • The California Oil and Gas Methane Regulation (COGR) builds on regional air district rules and covers additional areas not regulated by regional rules. According to CARB’s workshop presentation on January 20, 2023, COGR will drive an approximate 42% reduction of oil and gas emissions from production and processing by 2030.
  • The Governor’s Special Task Force on Methane (led by CARB and CalGEM) has begun the work to identify and address methane leaks from oil infrastructure near communities. Although this work is already well-established under existing CARB and regional air district regulations, the Governor appointed the Task Force in order to enhance communications with local communities and environmental justice advocates.
  • The current CARB Draft Scoping Plan Scenario for O&G Extraction has set a 2030 Fugitive O&G Methane Reduction Draft target of 50% reduction below 2013 levels. California is currently on track for ~41% reduction. Additional action is being considered to reach the draft 2030 target. These additional reductions are likely to be identified in sectors other than Oil & Gas, such as landfills and dairy operations
  • At the urging of environmental justice advocates, CARB is reassessing methane emissions associated with heavy oil production. “Heavy oil” is crude oil that is very thick and viscous, with a high “specific gravity” often compared to “cold molasses.” It is noteworthy however that heavy oil accounts for less than 1/100th of the 1% of California’s GHG emissions.

Downstream Methane Regulatory Policy

Downstream methane emissions are associated with the transportation and processing of both crude oil and natural gas. Methane is the primary component in natural gas and is used and controlled by refineries in multiple ways:

  • Refineries purchase natural gas as a feedstock for hydrogen, and it is source of an energy that powers refinery operations. For both environmental and economic reasons, refineries work to minimize methane leakage from their facilities. They do so through the use of efficient gas recovery systems that help to capture these highly valuable compounds and prevent them from leaving the refinery process system. Refineries also employ personal and area monitoring systems to detect and alert individuals and the facilities of leaks.
  • The primary GHGs emitted from petroleum refineries are carbon dioxide and methane. The majority of methane emissions come from several very large industries that often operate right next to each other (agriculture, oil and gas, mining, and waste management), which makes it difficult to detect the actual sources of methane by remote sensing technologies.
  • To limit emissions, California’s refinery operators apply both preventative and response technology. For example, efficient flare combustion, steam purges and tank controls all limit methane and other emissions.
  • Since most of California’s refineries operate in urban environments, they have also installed very costly monitoring systems, designed to report to community and state officials on air quality and to immediately identify any possible fugitive emissions.
  • As methane is a naturally occurring gas, resulting from decay of organic matter, emissions from natural sources constitute about 40% of total global methane emissions. The largest sources of anthropogenic methane emissions are agriculture, responsible for around 25%, closely followed by the energy sector, which includes emissions from coal, oil, natural gas and biofuels.

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